In 1872, two Kentucky prospectors walked into a San Francisco banker's office carrying a leather bag filled with rough diamonds. They claimed to have discovered a secret gemfield somewhere in the American West—but they refused to reveal its location. What followed was one of the most elaborate cons in American history, drawing in some of the wealthiest and most powerful men in the country.

Philip Arnold and John Slag, cousins and experienced miners, convinced San Francisco's financial elite to invest hundreds of thousands of dollars in their "discovery." They led investors on blindfolded expeditions to a salted gemfield, hired respected experts to verify the fake deposits, and even fooled Tiffany & Company's gem appraisers. By the time geologist Clarence King exposed the fraud, Arnold and Slag had vanished with $650,000—worth over $13 million today.

This is the story of greed, deception, and the dangerous allure of easy wealth. It's a reminder that in the race for riches, all that glitters is rarely gold—or diamonds.

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In This Episode:

• Two prospectors convince San Francisco's wealthiest investors they've found a secret diamond field
• The elaborate con involves planted gems, blindfolded expeditions, and fooled Tiffany appraisers
• How geologist Clarence King uncovered the fraud through careful detective work
• The $650,000 scam that rocked America's Gilded Age financial world

Key Figures:

• Philip Arnold - Kentucky prospector and mastermind of the diamond hoax
• John Slag - Arnold's cousin and partner in the elaborate con
• William Routston - Founder of the Bank of California, one of the wealthy investors fooled
• Asperi Harpending - Ambitious investor who helped promote the fake gemfield
• Clarence King - U.S. Geological Survey geologist who exposed the fraud
• Henry Janon - Mining engineer who initially verified the salted site
• Charles Lewis Tiffany - Tiffany & Company founder whose appraisal legitimized the con

Timeline:

• 1870: Arnold and Slag approach San Francisco banker George Roberts with mysterious bag of diamonds
• May 1871: More investors brought into the scheme; Arnold and Slag receive $50,000 investment
• June 1872: Inspection party visits the salted gemfield in Wyoming; expert declares it genuine
• Late 1872: Geologist Clarence King investigates and discovers evidence of salting
• 1872: News breaks, investors realize they've been duped
• 1878: Philip Arnold shot by business rival; dies six months later from pneumonia
• 1896: John Slag dies quietly in New Mexico as a casket maker

Historical Context: The Great Diamond Hoax occurred during America's Gilded Age, when fortunes were being made and lost in mining speculation. The 1849 California Gold Rush and subsequent silver discoveries in Nevada's Comstock Lode had created a culture of prospecting fever. Wealthy San Francisco investors were primed to believe in the next big discovery, making them perfect targets for Arnold and Slag's elaborate scheme.

Why This Story Matters: This hoax represents one of the most sophisticated confidence schemes of the 19th century. It demonstrates how even the wealthy, powerful, and supposedly savvy can fall victim to well-executed deception when greed clouds judgment. The con also highlighted the importance of scientific expertise—ultimately, it was geologist Clarence King's careful investigation that exposed the fraud, not the financiers' business acumen.

The Aftermath: Neither Arnold nor Slag faced serious legal consequences. Arnold settled with investors and became a Kentucky banker before his violent death in 1878. Slag disappeared into obscurity, living quietly in Missouri and New Mexico as a casket maker until his death in 1896 at age 76. The investors lost hundreds of thousands of dollars but learned an expensive lesson about due diligence.

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