darcey, you are right that he is very dim and incapable of realising that the world comprises scammers who will always run rings around him and are the only ones likely to profit from these schemes.
I think he genuinely believes that, one day, he will strike lucky by being in the right place at the right time.
However, as others have pointed out, he will happily spout blatant lies (that he had fabricated, rather than merely propagated) in pursuit of his goals.
His problem is that he is such a low-rent conman that he will only ever be able to rope in an ever decreasing circle of people even more skint, desperate and clueless than himself. There is not much of a lifestyle to be had from this, no matter how clever he thinks he is.
I worry for his partner (who seems voiceless and vulnerable), as well as his kids' futures (notwithstanding the fact he appears to genuinely care for them). This is, at best, going nowhere, but could get much worse if he is not careful.