The Great Diamond Hoax of 1897: How One Man Turned a Sleepy Maine Island into a Treasure-Hunting Frenzy

Maine has seen its fair share of tall tales, but few compare to the Great Diamond Hoax of 1897—a swindle so outrageous it transformed a quiet fishing community into a frenzied gold rush overnight. This is the story of James B. Townsend, a silver-tongued con man who convinced an entire island that diamonds were buried beneath their feet.

A Treasure Map, a Mysterious Cave, and One Charismatic Con Man

Nestled off the coast of Mount Desert Island, Swans Island was a peaceful place, known more for lobstering than lost treasure. That changed when Townsend rowed ashore with a tale straight out of a pirate novel. He claimed that years earlier, as a sailor on a doomed vessel, he had stumbled upon a hidden cave packed with gold coins, gemstones, and most intriguingly—diamonds. Forced to flee due to a mutinous crew, he had marked the spot and returned to claim his fortune. The only catch? He needed financial backers to fund the excavation.

Mainers Take the Bait

Despite their reputation for Yankee skepticism, the islanders were drawn in by Townsend’s elaborate details, including an aged treasure map (which was likely tea-stained in a Portland boardinghouse). Excitement spread like wildfire. Lobstermen, shopkeepers, and even the local pastor pooled their money to form a “treasure company.” Soon, Swans Island was buzzing with gold fever as locals grabbed shovels and dug furiously at Townsend’s chosen site—a rocky bluff that yielded nothing but dirt and strategically placed “clues” like a rusty cutlass and a broken bottle.

Diamonds in the Rough—Or Just a Rough Scam?

With suspicions rising, Townsend played his trump card. Producing a handful of rough diamonds, he claimed to have unearthed them in a shallow pit, proving the treasure was close. That revelation sent the island into a frenzy. Newspapers like the Ellsworth American ran headlines declaring a diamond mine on Swans Island, and investors from Bangor and Bar Harbor rushed in, eager to stake their claims. Some even speculated that Maine harbored a secret diamond vein, rivaling South Africa.

The Scheme Unravels

Of course, the so-called diamonds were nothing more than cheap industrial stones Townsend had purchased in Boston. After months of fruitless digging, the townspeople began asking tough questions. Sensing his scam was collapsing, Townsend vanished one night, rowing off into the darkness with pockets full of investors’ money. The Bangor Daily News later dubbed it “the most glittering swindle ever pulled on the coast.”

A Legacy of Laughter and Legend

Rather than dwelling on their misfortune, the islanders turned the hoax into a source of local pride. The story of Townsend’s diamonds became a favorite tale shared over drinks at the wharf, and for years, children played treasure hunt in the abandoned dig sites. Even today, some old-timers whisper that a real treasure might still be out there, just waiting for the right shovel.

The Great Diamond Hoax of 1897 remains one of Maine’s most entertaining scams—a testament to the power of a good story and the eternal allure of hidden treasure. Who knows? Maybe Swans Island still holds secrets beneath its rocky shores.