IT is absolutely not anything to be proud of that one of the world’s greatest conmen, if not the greatest, was Scottish. Some conmen create fictional stories of wealth, some like Charles Ponzi make up fraud schemes, and one conman, Viktor Lustig, even sold the Eiffel Tower twice – but Gregor MacGregor topped them all by inventing a whole country and persuading people to invest in it, and even to emigrate there.

In 2012, The Economist published its list of the greatest conmen in history and number one was MacGregor, purveyor of “the greatest confidence trick of all time”. When you learn the details of what he did, it is hard to disagree.

The tale of MacGregor, who died in this week in 1845, has been brilliantly told in the book The Land That Never Was by David Sinclair, and I am much indebted to the author for his work that underpins this account. Why his excellent tale has not been turned into a movie is beyond me.

Born at the MacGregor ancestral home in Glengyle, the future fraudster joined the British Army as a 16-year-old ensign. He married a rich and well-connected heiress, Maria Bowater, in 1804 and with her money bought himself a captaincy in the 57th Foot regiment, where he began to show his narcissism with an obsession for uniforms and medals, but he fell out with fellow officers and was granted a discharge in 1810.

MacGregor duly started his nefarious conman career by moving back to the UK and calling himself Colonel, saying he was a baronet as he was the clan chief. London society accepted “Sir”Gregor but his wife died in late 1811 and suddenly he was penniless.

MacGregor decided to try his luck as a mercenary officer in Venezuela’s revolutionary army and in his very first action, MacGregor and his force routed the Spanish royalist opposition.

He married Josefa Aristeguieta y Lovera, cousin of Simon Bolivar who had taken over the leadership of the Venezuelan revolutionary forces. The revolution stalled, and MacGregor moved next door to the short-lived country of New Grenada where as a general he actually performed genuine heroics at the siege of Cartagena, leading the escape from that city on December 5, 1813, and then performing more valiant service in Venezuela.

Now feted as a soldier-hero, MacGregor began to get ideas above his station. He tried to set up a Republic of the Floridas, and later led British and Irish mercenaries in central America where his true colours emerged – he twice abandoned his colleagues to their deaths, stole money and hijacked a boat to escape. Bolivar accused him of treason and his reputation was sullied.

That did not stop MacGregor creating the con that would make him infamous. Having persuaded the King of the Mosquito Coast – now in Nicaragua and Honduras – to grant him a piece of land bigger than Wales, MacGregor established the entirely fictional country of Poyais and called himself its Cazique, or prince. He then created a fictional government and army – he even designed the “regimental” uniforms.

With brazen audacity, he went to London in 1821 and began to raise money for his new country, promising to pay much better rates of interest than UK Government bonds. There was huge interest in Latin America in the City at that time, and with a genuine hero in charge, how could Poyais fail?

The National:

"One dollar" from the purported Bank of Poyais

Meticulous documents such as land certificates and sketches of an imaginary Poyais convinced hundreds of people to invest tens of thousands of pounds in MacGregor’s scheme, equivalent to many millions today – he was even given a loan of £2 million by a City firm. Worse still, he persuaded shiploads of emigrants from London and Edinburgh to travel to Poyais. There they found not a sophisticated society but a jungle infested with disease – dozens of them died, just as the whole Poyais scheme collapsed in London.

MacGregor simply went to France and performed the whole con over again, despite the survivors returning to Britain to tell their story. In those days of slow communication, MacGregor stayed one step ahead until the whole farrago of nonsense collapsed and he was unable to pay creditors, leading to his arrest and trial. Incredibly MacGregor convinced the court in Paris that he really was the Cazique of Poyais and it was his underlings who were the fraudsters.

He was briefly jailed in London but again he carried on with the Poyais scheme and raised loans and issued bonds. David Sinclair wrote: “Nobody thought to question the legitimacy of Poyais itself. Some investors had begun to understand that they were being fleeced, but almost none realised how comprehensively.”

His capacity for deluding people was matched only by his clients’ greed for money, but after Josefa MacGregor died in Edinburgh in 1838, he left for Venezuela and never saw his homeland again.

Citing his earlier service, he somehow persuaded the Venezuelan Government to award him a pension and he was given the rank of general.

MacGregor died on December 4, 1845, at the age of 58, and was buried with full military honours in Caracas Cathedral in the presence of the country’s President, there to honour a soldier-hero rather than a fraudster.