A consummate social climber, manipulator, and schemer during the turbulent 1920s and 1930s, Tausend developed a process for extracting gold from base metals -- a prospect of great interest to the then-fledgling Nazi party and a Germany staggering under runaway hyper inflation. The Nazis, through a number of Hitler's inner circle of friends introduced to Tausend, invested heavily in the project.
Unfortunately, the process was found to be economically unfeasible and quite possibly a sham, much to the chagrin of the Nazis' and their supporters' pocketbooks. Tausend had raised approximately half a million dollars (roughly $5.6 million in 2005 dollars) to fund five laboratories, one research institute and one mining operation; but most of the money went instead to fund extravagant lifestyles for the four main business partners. Many investors, including pensioners in his home village, lost their entire savings, while Tausend collected castles and country homes.
Tausend's three partners fled Germany: one each to South America, Spain and Russia. Tausend fled to a castle he had purchased and put in his wife's name in Appiano, South Tyrol in the Italian Alps. In January 1929, he was involved in an auto accident, recognized by Italian authorities, arrested and extradicted back to Germany to take the full brunt of the Nazis' anger. Even after his arrest for conspiracy to commit fraud, Tausend (who had liquidated and invested his entire family's fortune into this venture) felt confident that his formula would be vindicated by the courts.
In a highly sensationalized trial that forced Tausend to demonstrate his gold-extraction process first hand, the judge convicted the disgraced man and sentenced him to prison -- not because the process itself was necessarily proved to be fraudulent, but because of misappropriation of venture capital invested in the project. Whatever property Tausend still owned outright was confiscated by the German state.
Whether Tausend committed fraud intentionally, acted as the front man of other con artists, or was merely a naive man with big dreams remains unclear. However, upon his release from prison after serving out his 4-year sentence, Tausend quickly began promoting his next "get-rich-quick" scheme. He was arrested again in 1937 and sentenced to prison in 1938 for check and money fraud. Tausend died while still in prison custody on July 9, 1942 at Schwäbisch Hall.