As Schemes Sink, Money Scammers Go On The Lam
R. Allen Stanford talks to the media during a news conference June 11 at Lords Cricket Ground - R. Allen Stanford talks to the media last year in London. Stanford is accused of creating false financial data to bilk investors of some $8 billion. (Tom Shaw / Getty Images)
Like rodents from a burning building, shady money gurus are fleeing the fiery U.S. financial scene. Nearly every day it seems there's a new story of a Ponzi schemer on the run or an on-the-fly fund manager being chased or apprehended.
The latest is R. Allen Stanford. On Thursday, FBI agents tracked down the fugitive financier in Virginia and served him with court orders. Earlier in the week, regulators from the Securities and Exchange Commission seized the assets of three of Stanford's companies and accused the Texas businessman of creating false financial data to bilk investors of some $8 billion.
For scoundrels, the allure must be irresistible: Grab gazillions in ill-gotten gains, hightail it out of town and wind up on a tropical island lounging in a beach chair with a tall cool drink in hand as the sun sets over the ocean.
(Tom Shaw / Getty Images)
The idea of "getting away with it" is a dominant theme in the American dream. Hollywood loves this scenario. Think Body Heat on one end of the continuum and Office Space on the other.
The Audacity Of Fraud
"We admire clever criminals who steal from the rich," says David Krajicek, co-editor of Crime & Justice News, a daily news digest.
"The criminals of Western lore who targeted banks and railroads generally are recalled with admiration," he says, "even though murder was often a means to their end."
Bank robbers Jessie James and Bonnie and Clyde fit into this file.
"We even have grudging admiration for more petty criminals, as long as they are clever: an adept car thief, a facile grifter, a break-in artist, an artful pickpocket," Krajicek says.
(Hulton Archive/Getty Images)
But, he says, we feel no such compassion for today's front-page white-collar scoundrels: the bankers and Wall Street moguls. "They are seen as the antithesis of Robin Hood," he says, because they steal from the middle class and give to themselves.
Some recent examples:
• Arthur Nadel, a Florida-based hedge fund manager, is said to have snookered investors out of $350 million and then taken a two-week, cross-country road trip before giving up the ghost and turning himself in to authorities. In the words of Assistant U.S. Attorney Reed Brodsky, Nadel was "exceptionally deceitful, brazen, creative and resourceful in achieving his criminal goals."
• Marcus Schrenker, a money manger from Indiana, tried to stage his own "disappearance" by skydiving from his plane into the Alabama countryside in January just before it crashed. He perhaps was parroting D.B. Cooper, who in 1971 famously hijacked a plane, then parachuted out of the sky with $200,000 in ransom money from the airline and was never found.
• Christopher Jared Warren, a California investment adviser in his mid-20s, is accused of participating in a $100 million mortgage fraud scam. In mid-February, Warren was nabbed at the U.S.-Canadian border with more than 700 $100 bills jammed into his shoes. He also was carrying four ounces of platinum, worth about $6,000, and $1 million in Swiss bank certificates.
Recurring Motifs
There are recurring motifs — self-absorption, world-class chutzpah and a cool, unruffled front — in the stories. For instance, Stanford's 81-year-old father, James, told The Houston Chronicle earlier in the week that he had no idea where his son was.
"I'd spoken to him a week or so ago," the elder Stanford told the newspaper. "He'd called — about problems with the business climate in general, but nothing of this magnitude."
He added, "I cannot believe that my son would run."
Many scammers-on-the-lam cannot leave well enough alone. Nadel, for instance, wrote letters to family members wondering whether he could get a book deal out of his badventure. And Warren posted a rant on the Internet before hitting the road. One site labeled it "Confessions of a Mortgage Fraudster." In the e-screed, Warren weaves a sordid tale of meth-driven loan officers, privacy-invading computer jockeys and greedheads in the executive suites.
An excerpt from Warren's rambling confession:
Built a fraudster by my trainers in corporate America. Mastered the fraud. Trained others in the fraud. Paid by the fraud. Mastered mortgage banking, escrow, real estate. Every scam possible: fraud for profit, fraud to fund loans for the under-qualified, fraud of evasion of taxes, reverse flipping, flipping, false liens, software manipulation...
And it utterly disgusts me. Looking back at the life I have led, I beg a higher power for forgiveness. For mercy. For I got caught up, my first corporate experience taught me fraud mixed with drugs and money. The very top ranks of the corporate ladders knew what was going on.
Warren even goes so far as to recommend ways for the government to curtail such illegal shenanigans and then, in a cherry-on-top moment, suggests that he be the person put in charge to fix the massive mortgage-fraud problems. Just what the situation calls for: another fox in the henhouse.
Crime And Punishment
Our national fascination — even admiration — for certain criminals can sometimes seem schizophrenic, says Krajicek. "But I see no such contradictions in the case of Wall Streeters. They are universally seen as oafish, lazy cheats and not clever confidence men."
In fact, he adds, "We all seem to hope that D.B. Cooper is on a beach somewhere, still spending that airline's money. We surely don't wish that for Wall Streeters. A dungeon seems more appropriate."
Material from The Associated Press was used in this report.
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