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The Dale Car Scam

Thanks to the 1973 oil crisis, the early part of that decade was a difficult time for car owners, leaving many looking for a low-cost, fuel-efficient alternative to get them where they needed to go. Enter the Dale.

Who is Liz Carmichael?

In 1974, Liz Carmichael was a single mother of five who decided to singlehandedly take on the biggest names in the automobile industry, creating a car to benefit the American people. Speaking of the Dale, Carmichael claimed to have created a car with more than just an affordable price tag: this car was small, sleek, and futuristic in its design compared to the more boxy vehicles already on the road, weighed less than 1,000 pounds without compromising any safety features, had only three tires, and could get around 70 miles to the gallon. This car was the solution to more than just the oil crisis—this car was the solution to every problem in the automobile industry.

The Scam

Like any good businesswoman, Carmichael, who thought herself to be a cross between Henry Ford and Howard Hughes, collected over $3 million from investors before these miracle cars were ever actually manufactured. At this point, an investigator for the California Department of Moto Vehicles became leery of Carmichael’s business and did some research to see if it was in fact legit.

While there was a development lab set up with several busy employees, it was clear that there were no cars being designed or built there. Carmichael claimed to have purchased three large aircraft hangars for production and assembly of her amazing cars, however, these hangars turned out to be completely empty. Even the prototypes of the car turned out to be a farce, complete with no engine, two-by-fours holding up the third wheel, and door hinges like you’d find in a house.

The Truth Revealed

Realizing the authorities were becoming keen to her scam, Carmichael relocated the headquarters of Twentieth Century Motor Car Corporation to Dallas, hoping to buy herself more time, but was ultimately arrested in April of 1975. At this time, the truth about Carmichael was revealed—she was in fact a man named Jerry Dean Michael who was facing charges dating back to 1961. After being convicted of fraud, conspiracy, and grand theft, Michael appealed his conviction over the course of four years until he disappeared again in 1980.

What Can We Learn?

The Dale Car Scam remains one of the most notorious scams of the 20th century, leaving many people leery of businesses that sound too good to be true. It’s important to do your homework before giving money to any company to avoid being scammed.

Unfortunately for many legitimate companies, scams like this have left potential investors so leery of business propositions, such as the supposed “ACN Scam,” which in fact has turned out to be anything but a scam. Make informed decisions and you’ll keep yourself safe.