Devouring the Heart of Portugal

Wow, what an interesting story. Very well told and provides a window into life in the 1920s.

One thought that came to mind while reading it is how easy it is to do the wrong thing, and how hard it is to prove or stop people from doing the the wrong thing. There's such an asymmetry.

Following the rules necessarily puts constraints and friction on your ability to act. Ignoring the rules allows you to move more nimbly.

It seems like in almost all of these cases the criminals only fail because they don't stop, which gives authorities enough chances to finally catch them.

Makes you wonder how many criminals stop at the first success and never get caught.

aldeluis 4 years ago |

If this is the history of a very smart but unsuccessful fraud scheme, I can't imagine the number of successful fraud schemes that had pass undetected and had build our society or history by gaining legitimacy afterwards. All these people in the money gathering way of life (seems more of a religion) are governing the lives of the rest of us leading our wills to wars or to dedicate all of our life span to work in unfathomable tasks.

marquis 4 years ago | |

Raise your hand if you have worked hard building an honest product that does what it says, only to see another business rise up to claim the same thing but based on smoke and mirrors. Must be an age-old trick, maybe akin to the octopus pretending to be a plant so it can catch prey, or the angler fish's glowing trap in the dark.

forinti 4 years ago |

I love books about fraud and The Man Who Stole Portugal by Murray Bloom is one of my favourites.

This is also a story about how Artur Alves dos Reis sparked growth by injecting money into the Portuguese economy.

MrDresden 4 years ago |

Great read, that feels oddly timely as I just returned from a months stay in Portugal. Fantastic place and people.

"He then sent the required funds to his National City Bank account by wire transfer, all while the paper checks were still bobbing across the Atlantic."

Does anyone know the proceedure that financial institutions used back then to confirm wire transfers (as in all the steps involved, including acks)?

Radim 4 years ago |

> Alves Reis had amassed more than 600,000 escudos (worth roughly $500,000 adjusted for US dollars in 2022). … Alves Reis bought a brand new Nash automobile, moved into a lavish 12-room apartment, and hired a staff of house servants

I don't doubt this "adjustment for US dollars in 2022" was done according to best practices and inflation charts.

Doesn't make it any less ridiculous when juxtaposed with the actual purchase power like this.

telesilla 4 years ago | |

Inequality was so much more then, as it still remains in some parts. You could move to some countries today with that amount of money, rent a large house there and employ a bevy of staff. You'd not last too many years but you could achieve it.

spanktheuser 4 years ago |

The podcast is one of my absolute favorites.

unknown_apostle 4 years ago |

It's amazing how some people are so optimistic and self-confident that they are simply incapable of learning. Reis kept going for "easy money" and risky ventures until the end. Complete lack of moral character aside, he apparently never accepted that, given the way in which he approached things by cutting all sorts of corners, the fallout from his failing schemes kept destroying the gains from his successful schemes, both for himself and for others.

thematrixturtle 4 years ago | |

Really? If he was a (legit) serial entrepreneur we'd be lauding him for his grit here on HN. And he almost pulled off his final "fake it till you make it" unicorn scheme too: if he had wrested control over the Bank of Portugal, he could have retroactively legitimized everything he did.

unknown_apostle 4 years ago | | |

First, at least his big scheme wasn't "fake it till you make it"; it was explicitly and intentionally criminal from the beginning.

Second, I doubt whether serial delusions of grandeur would be unanimously lauded on HN.

vmception 4 years ago | | |

If he got the central bank I would find it very amusing

He would just need to stop there and focus on managing the central bank instead of A&M bank

Although A&M bank could have become one of the most respected investment banks given its connection.

Almost all of which have similar origins (and ongoing operations) in something lucrative and unsavory.

So you either win or you lose. He lost after being so close to winning. My lack of admonishment comes from my main observation that he could have stopped before starting A&M bank and been indistinguishable from any other well off person. He was a respected business leader at the time.

plafl 4 years ago | | |

He got 2/3 of the shares necessary for gaining control. The Bank of Portugal was the only one who could prosecute money forgery and it was being acquired with forged money. This guy was a hacker.

I doubt he would have succeeded nevertheless. In the end the law was changed to apply to him retroactively, which was unconstitutional (and I'm sure it's still unconstitutional on most parts of the world), and that only to give him more sentence time. He would have been removed from the bank, one way or another.

vmception 4 years ago | | |

When looking at other large investment banks, I think he would have succeeded

Whether it was HSBC’s opium trading

Or JP Morgan Chase’s fraudulent securities offering for a water company that decided to operate as a bank

There are lots of examples of maneuvering towards legal legitimacy

It really just depends on where your ambitions lie and what consequences you are willing to risk.

(note: all those banks are now results of many mergers and hardly represent their oldest branches)

vmception 4 years ago |

Sometimes from my business dealings and introductions in Europe, I feel many people there are trying to replicate this.