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The Dale: How A Cheap Three-Wheel Car Was A Massive Fraud

The Dale Automobile

In the 1970s, during the Arab-Israeli war, oil companies put an embargo on sales to the US in protest over its support for Israel.

As a result, prices rocketed and Americans began to worry about the prices and their own fuel efficiency.

Their interest was piqued by an unknown entrepreneur called Liz Carmichael.

READ MORE: The 9 Biggest Business Frauds Of The 1970s

In 1973, she claimed he had invented a three-wheel car called the "Dale" that could do 70 miles to the gallon.

Carmichael lived in Los Angeles and claimed to have a degree in engineering and an MBA from Miami University.

She also claimed to be the widow of an employee of the US space agency Nasa.

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What was the scam?

In 1974, Carmichael set up the Twentieth Century Motor Car Corporation in Nevada to produce the Dale.

She tried to raise money from investors by selling shares in the new company, rights to dealerships, and even models of the (yet to be built) Dale.

The Dale was based on an actual design, licensed by car designer Dale Clift.

Tests proved it to be impractical and unsafe, even in prototype form.

Carmichael seemed to give up very quickly on the idea of manufacturing it, but remained very keen on keeping the money her investors had paid.

A burst of publicity helped Carmichael raise funds, but it also alerted the authorities, who discovered that the factories where the Dale was supposedly being made were empty.

Carmichael tried to prolong the scam by moving to Dallas.

Still, the authorities quickly shut down the firm when it was discovered that Carmichael, a transgender woman -was a fugitive previously known as Jerry Dean Michael, wanted for counterfeiting and bail-jumping.

She absconded again before sentencing.

She was on the run until 1989 when she was finally caught, arrested, brought back to LA and convicted of conspiracy, grand theft, and fraud.

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Carmichael claimed in press interviews to have received $100m in pledges from investors ($537m in today's money).

Later reports suggest actual losses to investors were closer to $2m ($10.7m).

Some former employees are convinced the Dale project could have succeeded.

However, even Carmichael said she was surprised by people's willingness to invest money based on her false claims.

Carmichael died in 2004.

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