Max Klante: The betting fraudster of the 1920s

From brush maker to betting company founder
Born on May 25, 1883, in Steinau an der Oder, Max Klante began his career modestly as a brush maker in his uncle's business. After unsuccessful attempts at running his own brush-making business and a newspaper distribution company in Breslau, he worked as a photographer and eventually discovered his passion for horse betting. As a “tipster” at racetracks, he developed a keen sense for successful bets. In 1919, he moved to Berlin, where he founded his betting company in May 1920. This was followed in December by “Max Klante & Co. GmbH” with a share capital of 500,000 marks.

The “infallible system” and astronomical returns
Klante's recipe for success was as simple as it was fraudulent: he claimed to have developed a virtually infallible system for horse betting. In his magazine “Der Meldereiter,” he advertised with incredible promises of returns: 600% annual interest for depositors, without any risk of loss.
His company launched in the 1921 racing season and was actually able to pay out its first high dividend. Klante purchased a modern office building on Frankfurter Strasse in Berlin, where long lines soon formed in front of the counters. The company quickly expanded to other German cities. In Dresden, there was even a betting office specifically for police officers at the police headquarters.

The inevitable collapse
The first critical day came on May 28, 1921, when 20 million marks in dividends were due to be paid out, but only about 5.5 million marks were available. Klante began to use new deposits to pay off old debts – the classic pyramid scheme took its course.
From May to August 1921, bets totaling over five million marks were offset by profits of only three million. Despite cutting interest rates in half, the collapse was unstoppable. On September 12, 1921, Klante was arrested after retreating to a sanatorium. On the same day, he filed for bankruptcy.

Trial and sentencing
Klante's trial began on December 11, 1922, at the Berlin Regional Court. The charges included fraud, commercial gambling, and violations of bankruptcy law. The verdict: three years in prison, a fine of 105,000 marks, and five years of loss of civil rights. He was banned from all Berlin racetracks for life.
A total of 260,000 people had entrusted Klante with their money. The total damage amounted to 90 million gold marks, which would be equivalent to about 45 million euros today.

The end of a swindler
After World War II, Klante returned to work as a brush maker with a small shop. He died by suicide on October 7, 1950, in East Berlin. His only legacy is said to have been a betting slip for a horse race – a tragic and ironic end for the former “betting king.”
Max Klante is still considered a prime example of the criminal upstarts of the interwar period, whose completely unrealistic promises were accepted uncritically by a desperate population.