Montezuma and The Spenazuma Gold Swindle

Feb 1, 2016 by Mike Bibb

MontezumaI would imagine most people have never heard of Spenazuma – but it existed for a brief time.

Long before Charles Ponzi, Charles Parker, Frank Abagnale, Bernie Madoff and a slew of other renown con-artists, my hometown of Safford, Arizona and surrounding Graham County experienced its own auspicious flimflam man in the late 1890s.

Richard C. Flower was an exceptionally talented swindler who enjoyed perpetrating a variety of illegal scams. His many phony promotions netted him millions of dollars during his “career” and his skills at duping ordinarily intelligent people into falling for his deceptions was quite extraordinary.

Graduating from Northwestern University in Illinois in 1868, and drawing from experiences as a lawyer, preacher, doctor and pharmaceutical representative, enabled Flower to perfect his shrewd sales abilities before entering the lucrative arena of mining fraud.

Prior to 1900, Southeastern Arizona was teeming with mining activity. While gold and silver were the minerals of choice, copper was evolving into a major commodity as America was becoming electrified and copper wiring and related products were increasing in demand. Later, mass production of the automobile would also contribute to copper’s boom. To meet business requirements, large scale copper mining enterprises would eventually develop in the Clifton-Morenci area, as well as Globe-Miami.

Safford and Graham County are situated between these two mining districts, providing assumed evidence of large concentrations of mineral wealth. A convenient conjecture Flower often mentioned when championing the development of his newly recorded gold discovery. Problem was, there wasn’t any gold “in them thar hills,” but only Flower knew it and he wasn’t telling anyone else.

The lure of big money and even bigger ambitions attract a certain seedy element of society – the con man. It didn’t really matter what the ruse was since it would boil down to a single simple premise: Figure out how to separate people – the “marks” – from their money before they realize they’ve been had.

Hoping to cash-in on the regional mining frenzy, Flower developed a scheme that would involve the creation of a fake mining operation and sale of stock in the bogus company. To lend a distinction of legitimacy, he managed to convince several local Safford businessmen of the appearance of his gold and silver strike in a remote area of Graham County by providing small samples of the minerals allegedly extracted from the mine, which he called the Spenazuma.

When questioned about the unusual name of the newly constructed mine site, Flower would launch into a detailed historical account of how the legendary Aztec chieftain Montezuma prophesied the location of a fabulously rich ore body of Aztec gold. The place would be marked by a large outcropping of rocks resembling the facial profile of an Aztec prince named Spenazuma.

Sounded plausible, and since no one bothered to authenticate the story or question Flower’s version of how the ancient Aztec Empire – over 1500 miles away in central and southern Mexico would have gold hidden in a hill in present day Arizona – made the mining adventure even more believable. Capping the yarn, several inaccurate articles appeared in the Graham County Guardian newspaper testifying to the validity of the mine. Instead of checking reports that maybe Flower was not on the up-and-up, the editor, John Birdno, was assured the Spenazuma was legit, especially since it was employing area residents and purchasing hardware and material needed at the mine from local businesses. Also, it didn’t hurt that mine officials and supervisors vouching for the mine’s genuineness were employed by Flower.

The stage was set and Flower didn’t leave any angle uncovered. To make sure the mark’s would take the bait, he built fake mine buildings on the property, hired make-believe miners and temporary workers, surveyed a town site, provided free rock samples guaranteed to contained bits of gold, leased an excursion train and stage line to transport prospective investors to the mine and peppered the area with other artificial items giving further credence to the semblance of an actual mine.

The carefully crafted illusion resembled a modern movie set, in that nothing was real but it looked like it was.

When investors from the East arrived to inspect the operation, they had no idea they were observing a fake mine site, since most of them had never seen a working gold mine. If they asked to take a tour of the mine, Flower would immediately rule against it insisting safety issues prevented non-company personnel from entering the shaft, tunnels and machinery complexes. It was just too risky – In more ways than one.

The Spenazuma was one of the most elaborate and brilliant swindles ever concocted and would serve as a text book example of how to conceive, promote and execute the art of the con. Law enforcement still refer to it when researching or teaching fraudulent techniques.

Decades later, the use of false mining props to trick unsuspecting clients in Flower’s Spenazuma caper provided the concept for Hollywood to adopt a similar theatrical technique in the Paul Newman and Robert Redford 1973 movie “The Sting.” While the movie is based upon real-life cons committed by brothers Fred and Charley Gondorff in Chicago in the 1930s, some of the movie sets were designed and created to provide a mirage for the fictitious cinema marks.

Enhancing the myth, Flower spent a lot of money fabricating his scam, but he would soon make unbelievable profits from it.

With the successful promotion of his Arizona mine, Flower enlisted the assistance of a shady New York stockbroker, acting under the guise of the “Commissioner of Arizona,” to begin issuing equally phony shares of stock certificates in the Spenazuma Gold Mining and Milling Company at ten dollars a share.

They sold like beer at Octoberfest. Eventually, Flower managed to bilk more than $3 million – equivalent to about $86 million in today’s money – from unsuspecting investors before George H. Smally, a reporter for the Arizona Republican newspaper uncovered the hoax in 1899.

After the fraud was made public, Flower abandoned the Spenazuma location and moved his operations to a place he called Aura, Arizona and restarted the swindle. Wise to Flower’s deceptions, Smally again revealed the unlawful affair, forcing Flower to flee Arizona and head back East to eventually become one of the biggest and most successful confidence men in United States history.

Interestingly, a side story to this affair was something called the “McEniry Tunnel.” Thomas McEniry was an associate of Flower and helped him promote the Spenazuma swindle. After Flower’s fake mine was disclosed, McEniry remained in the area to contrive a con of his own. Under the pretense of digging a tunnel to extract gold and silver from nearby Mount Graham – and selling the idea to East Coast investors – McEniry realized water in the desert is as precious as rare minerals. Convincing the locals he was really constructing the tunnel to capture and funnel underground water to a massive reservoir, the water would then be sold to farmers for irrigation purposes, or at least sold to those farmers who had purchased an interest in the new water company.

So, while Eastern investors believed they were funding a mining project with proven ore reserves, McEniry was actually using their funds to build a phony water system and storage facility for area farmers. In essence, he would be getting paid on both ends of the same scam.

Realizing he had been burned by the Spenazuma incident, Mr. Birdno published an article in The Graham County Guardian, May 24, 1907 issue entitled “A Second Spenazuma: Prospectus Issued Which Is One Of The Rankest Fakes Ever Sent Out To The Public,” detailing McEniry’s proposed plans to mine at the base of Mount Graham.

McEniry’s hoax collapsed in 1908. As a result, he quickly left the area and was never seen or heard from again.

After a lengthy and varied vocation of scheming and conniving, Flower was finally arrested in Toronto, Canada in 1916. While on bail and awaiting trial, it was reported he suddenly died from a heart attack in a New Jersey theater. He was 73.

It’s never been adequately explained why he was allowed bail or why he was in New Jersey after being arrested in Toronto. After half a century of committing some of the most elaborate thefts in recorded history – excluding politician’s craftsmanship – he spent very little time in jail.

By the way, the Spenazuma rock formation is also known as Black Rock, located on a cattle ranch about 30 miles southwest of Safford.

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