Charles De Ville Wells (1841 – 1922)
Charles De Ville Wells may be a relatively obscure figure these days but he has two major claims to fame – he was the man who broke the bank in Monte Carlo and perpetrated a massive fraud in France which had all the hallmarks of a Ponzi scheme a decade before Charles Ponzi was in action. An engineer by trade, Charles had an inventive mind – he designed a device to moderate the speed of a propeller, selling the patent for $5,000. But he soon turned his grey cells to more lucrative endeavours.
Around 1879 he turned up in France and launched a scheme, fraudulent of course, to raise money to build a railway at Berck-sur-Mer. He attracted a good number of investors who never saw a return on their money. When the scheme unravelled, Wells scarpered with the money and he was convicted in absentia. He next turned up in England where from around 1885 he launched a scheme to fund some of his inventions, promising eye-watering returns. Monies were raised and, of course, no dividends were paid. One investor lost the modern-day equivalent of £1.9m.
Whilst in Monte Carlo in late 1891 he visited the famous casino on a number of occasions. Each table had a cash reserve of 100,000 francs – the bank – and if a gambler won more than was available – a feat known as breaking the bank – play was suspended and extra cash was taken from the vaults in an elaborate ceremony. With a stake of around £4,000 Wells won £60,000, breaking the bank on a number of occasions. Wells claimed he had devised an infallible system, although he was never able to repeat his phenomenal success, others thought he had just had a phenomenal run of good luck but some, looking at his track record, think there may have been something underhand. We will never know but Wells had assured his place in gambling history and popular culture.
With some of his loot he bought a yacht and this proved his undoing. When moored in Le Havre, the yacht was raided and Wells was arrested and extradited to Blighty to stand trial for the fraud he committed in the patents scheme. He served eight years and then was imprisoned twice more – once in England and once in France – as the long arm of the law sought its revenge.
After his enforced rest, Wells popped up again, in 1910, under the alias, Lucien Rivier. He established a private bank in the Avenue de l’Opera, opening for business with the astonishing promise of offering a guaranteed 365% interest per annum. There was a ready audience for such enticing rates and investors scrambled to get a piece of the action. Wells was able to meet the interest payments of the early investors from the deposits paid in by later investors – the classic sign of what we now know to be a Ponzi scheme. The French authorities began sniffing around the bank and inevitably there were insufficient funds to meet the bank’s obligations. Wells fled back to England with some of the money but, in 1912, he was arrested, brought back to France and imprisoned for 5 years.
Over 6,000 investors, depositing some 2 million francs, were stung in Wells’ last scheme. So serious were the repercussions in the French banking industry that the authorities imposed stricter controls on private banks and subjected owners to more stringent vetting procedures.