Waggoner, whose unassuming looks included wire-rim glasses and a wisp of a moustache, was one of the town’s most prominent citizens; today, his grand home is on Telluride’s historical walking tour. He helped build a hospital dedicated to the miners, many of whom would die of lung disease they contracted in the dank, dusty conditions. To an unusual degree for a burgher, Waggoner empathized with the town’s working class — most of whom were his customers.

His first attempt to protect them from the coming disaster was on the up and up: He asked several of the big Denver banks to give the Bank of Telluride a loan. When they said no, Waggoner was left with no choice but to take matters into his own hands. At least that’s how he saw it.

On Aug. 30, 1929, Waggoner wrote out six telegrams, using a special code only bankers knew, and had someone he knew in Denver send them to six New York banks. The recipients were led to believe that the telegrams came from six correspondent banks in Denver — a belief reinforced by the use of the special bankers’ code. The code in the telegrams requested that funds be deposited in the Bank of Telluride’s account at the Chase National Bank in New York. The total was $500,000 ($7.3 million in today’s dollars).

The next day, a Saturday, Waggoner met up with a bank officer at the Chase National Bank on Wall Street. After confirming the money was indeed in the Bank of Telluride’s account, he wrote out some certified checks that paid off his bank’s debts. Another check was used to pay off a personal loan. Most important, back in Telluride, one of his employees had been instructed to write out certified checks against the money in the account to each of the banks customers. The amount was what they held on deposit at the Bank of Telluride. Waggoner then told his employee to get in touch with as many of the depositors as he could, so that they would come to the bank and get their check. A certified check, the bank officer explained to the depositors, could be cashed anywhere: The money was guaranteed.

From his New York hotel room, Waggoner wrote a letter to Colorado’s banking commissioner, who he knew was preparing to close his small bank. After explaining what he had done, he wrote:

I am using the money to square some matters for my bank and to help rescue my depositors from losses that they do not deserve to suffer. You will no doubt become involved in this matter, and I am sure I can count on you to defend the interests of the little people against the conscienceless Denver and New York banks. They are rapacious and soulless, and nothing would delight me more than to be a part of their downfall.

He added, “Bankers are no longer gentlemen looking out for the interests of their communities but immoral predators in relentless pursuit of profit.”

Waggoner’s swindle was a big story for a few days, on the front page of the New York papers, even rating a mention in Will Rogers’s syndicated column. (“If a city banker had pulled just such a fast one on a country boy, you’d probably never hear a word about it, and he’d end up Secretary of the Treasury.”) He was an instant folk hero. He went to Wyoming and stayed with relatives until he was arrested a few weeks later, and returned to New York to face his fate. His lawyers thought he had a good chance of beating the rap, but standing before the judge, he waved them away and pleaded guilty.

“I knew exactly what I was doing,” he told the court. “There is no one to blame but myself.” He continued:

My bank, the Bank of Telluride, is the lifeblood of my town. With it, life is sustained. Without it, there is no life. … I saw no other means to cover the bank’s deteriorating position, no other way to keep it afloat.