The Salad Oil Scandal | How a Scam Made Warren Buffett Rich

About this episode

In November 1963, a man who filled giant tanks with water and floated a thin layer of soybean oil on top managed to borrow $180 million against inventory that mostly did not exist. His collapse almost crashed the stock market. Anthony "Tino" DeAngelis started in meat packing at 16 and worked his way up to running his own company, Goble, which got caught overcharging the government and selling substandard meat to the school lunch program after the 1946 National School Lunch Act. Bankruptcy did not stop him. He started Allied Crude Vegetable Oil Refining Corp in 1955, right as soybean oil boomed into the commodity everyone from Henry Ford to Wall Street wanted a piece of. Tino bought dozens of massive tanks in New Jersey, filled them almost entirely with water, floated a layer of oil on top, and built underground pipes to shuffle that same oil between tanks while American Express warehouse auditors checked them one at a time. On paper he had 1.8 billion pounds of oil, more than the entire United States inventory, and he used those receipts as collateral to pull $180 million in loans from 51 banks and corner 90 percent of soybean futures. When the con unraveled in November 1963, tw