In 1820, Scottish officer Gregor MacGregor returned to London claiming that an indigenous king in Central America had named him Prince of Poyais, a sovereign nation along the Black River in modern-day Honduras. MacGregor described Poyais as a fertile paradise rich in gold, timber, and fertile soil, desperately needing British settlers and capital. To back his claims, he produced manufactured guidebooks, land deeds, and even a fake currency.
London's financial district, hungry for speculative Latin American investments, fell for the deception completely. MacGregor successfully floated a two hundred thousand pound Poyais government bond issue on the London Stock Exchange and sold hundreds of land grants to hopeful settlers. In 1822 and 1823, seven ships loaded with eager Scottish and English emigrants set sail for Poyais.
Upon arrival, they found only dense, uninhabited jungle, malaria, and untouched wilderness. More than half of the colonists died from disease and starvation before rescue ships arrived. The revelation of the fraud triggered a crisis in the London bond market, causing widespread panic and contributing to the major British financial crash of 1825.
Astonishingly, MacGregor fled to France and attempted the exact same scheme again, remaining largely unpunished until his death in Venezuela.