Philip Arnold

Philip Arnold (1829–1878) was a confidence trickster from Elizabethtown, Kentucky, and the brains behind the legendary diamond hoax of 1872, which fooled people into investing in a phony diamond mining operation. He managed to walk away from the hoax with more than half a million dollars.

Arnold was a poorly educated hatter's apprentice when he enlisted to serve in the Mexican-American War. He then went to California as part of the Gold Rush of 1849. He apparently met with some success there, as he was able to return to his native Kentucky, buy a farm, marry, and start a family.

By 1870, he had returned to the West to take a job as a miner and prospector. He and his cousin John Slack obtained some industrial-grade diamonds from their friend James B. Cooper, then an assistant bookkeeper for the Diamond Drill Company of San Francisco. They mixed the diamonds in with garnets, rubies, and sapphires he bought from Indians in Arizona.

Arnold and Slack took their bag of jewels to the office of local businessman George D. Roberts, whom they convinced that they had found them in a previously-undiscovered deposit. They swore Roberts to secrecy and asked him to store the gems in his office. But, Roberts could not keep a secret and eventually drew several other men into Arnold's trap, including: William C. Ralston, founder of the Bank of California; Asbury Harpending; William Lent; and General George S. Dodge. Together, they put together an offer to buy out Arnold and Slack, and gave them a $50,000 down payment.

Arnold and Slack used the money to go to England and acquire additional uncut gems, valued at about $20,000. Some would go back to San Francisco to further convince Roberts and his investment group. Others would be planted for later discovery.

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