Cassie Chadwick - The Carnegie Con

The Carnegie Con

Following her marriage to Dr. Chadwick in 1897, Chadwick began her largest, most successful con game: that of establishing herself as Andrew Carnegie's daughter. During a visit to New York City, she asked one of her husband's acquaintances, a lawyer named Dillon, to take her to the home of Andrew Carnegie. In reality, she just visited his housekeeper ostensibly trying to check credentials. When she came back, she dropped a paper. Dillon took it up and noticed it was a promissory note for $2 million with Carnegie's signature. When Dillon promised to keep her secret, she "revealed" that she was Carnegie's illegitimate child. Carnegie was supposedly so wracked with guilt that he showered huge amounts of money on her. She also claimed that there was $7 million in promissory notes tucked away in her Cleveland home, and she was to inherit $400 million upon Carnegie's death. Dillon arranged a safe deposit box for her document.

This information leaked to the financial markets in northern Ohio, and banks began to offer their services. For the next eight years she used this fake background to obtain loans that eventually totalled between $10 and $20 million. She correctly guessed that no one would ask Carnegie about an illegitimate daughter for fear of embarrassing him. Also, the loans came with usurious interest rates, so high in fact, that the bankers wouldn't admit to granting them. She forged securities in Carnegie's name for further proof. Bankers assumed that Carnegie would vouch for any debts, and that they would be fully repaid once Carnegie died.

With this money, Chadwick began to live a very lavish lifestyle. She bought diamond necklaces, enough clothes to fill 30 closets, and a gold organ. She became known as "the Queen of Ohio."

In November 1904, she received a $190,000 loan from Herbert B. Newton, a Brookline, Massachusetts banker. Newton was shocked when he learned of the other loans Chadwick had received, and called the bank's loan. Chadwick could not pay and the bank sued. At the time, she had accumulated debts equal to $5 million. It was also discovered that a number of securities being held for her in various banks were worthless. When Carnegie was later asked about her, he denied ever knowing her, and further stated he hadn't signed a note in more than 30 years. Chadwick fled to New York, but was soon arrested at her apartment at the Hotel Breslin and taken back to Cleveland. When she was arrested, she was wearing a money belt containing over $100,000. Leroy Chadwick and his adult daughter hastily left Cleveland for a European tour when the scandal broke. However, he did file for divorce before leaving on the tour.

The news sent shockwaves through the Cleveland banking community. One bank, Citizen's National Bank of Oberlin, which had loaned her $800,000, suffered a massive run that forced it into bankruptcy.