In 1871, cousins Philip Arnold and John Slack claimed to have found diamonds on the border between Colorado and Wyoming. Several wealthy investors like Charles Tiffany were interested.
Arnold and Slack sold the fields for $660,000, today worth over $15 million.
The investors sent a geologist to survey the diamond fields. He found gems only on the surface and in newly overturned soil.
It was concluded that the cousins had salted the land with low-quality gems to swindle investors.
Arnold was sued over the diamond hoax and settled out of court. He became a banker and was killed in a shootout with a rival banker. Slack moved to St. Louis to become a casket maker and undertaker.
Geologist Lowell Hilpert wrote an unpublished manuscript about the great diamond swindle. It is part of his papers at UW's American Heritage Center.