She Opened The “Ladies’ Deposit Company” In 1879 And Scammed Thousands Of Unmarried, Working-Class Women Out Of Their Money In One Of The Greatest Frauds Of All Time

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Throughout history, certain people have left behind a lasting legacy. These individuals weren’t known for their virtuous deeds but for their acts of deception.

In the late 19th century, a woman named Sarah Howe concocted an elaborate hoax known as the Ladies’ Deposit Company that scammed thousands of women out of their money.

Sarah Howe was born in Providence, Rhode Island, around the year 1826. For most of her early life, she worked as a fortune teller in Boston. She was arrested for fraud several times in 1875 because she had a tendency to take out multiple loans and then refuse to pay them back.

In 1879, she cooked up one of the greatest frauds of all time, fooling an entire nation of single women. She opened the Ladies’ Deposit Company and accepted deposits from unmarried, working-class women who didn’t own their own homes.

Deposits could only be in amounts of more than $200 but less than $1,000. A return of eight percent in interest each month was promised.

Even though Howe did not advertise her bank—new members could only be referred by other members in good standing—she quickly attracted a following and gained $500,000 in deposits from 1,200 women.

On the surface, the Ladies’ Deposit Company seemed to be a wonderful opportunity for single women to further their finances and gain independence from men. But in reality, it operated as a Ponzi scheme before Ponzi schemes were even a thing.

Howe took money from depositors under the guise that they would receive high-interest payments from stock market investment gains.

Instead, she paid the interest with money from later depositors. Her scam also placed a limit on the money that could be withdrawn. The women could only draw from the interest money they had accumulated, not from their original capital. She got away with this rule because she said it helped prevent members from overspending.

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