On the last day of the ski trip, while stuck with Max on a stalled chairlift, I feel my chest start to tingle. At first I assume it’s some midstation chili con carne asserting itself. Only when the tingle returns do I realize my cell phone is vibrating. I extract the device from the inner pocket of my parka—no easy matter when one is wearing mittens and holding ski poles—to check the incoming messages.
“They arrived!” I shout.
The pronoun needs no clarification. Max holds out a clenched glove, and we fist-bump while rocking back and forth twenty feet in the air.
That night we decide to eat at a steak joint halfway down the Killington access road. The guy taking reservations informs us there’s a forty-minute wait. We don’t care. We’re in no hurry. After Max puts our name down, we head over to a nearby sports bar in search of a foosball table and return to the restaurant just as the maître d’ is calling out, “Cesar, party of four? Cesar, party of four? We’re ready for you.”
“Very funny, Max.”
Very funny and also very true. I don’t know it at the time, but Cesar is about to be served.
PRINTS OF THE CITY
On December 30, 2005, I lug the two heavy cartons Françoise has parked under the Christmas tree to my third-floor office, and slice through a thick skin of reinforced packing tape. I spread the contents of the cartons—the handiwork of a duplicating service called Prints of the City—on the carpet next to my desk. Amazingly, every item I set aside at the law firm, right down to the Post-its, has been perfectly reproduced and placed in labeled folders. This makes it a snap to replicate the organizational logic I applied to the documents during my frenzied weekend of triage. Yet I soon realize there’s no point in rebuilding the nine paper piles. Doing so obliterates the chronology of the scam, thus making it impossible for me to figure out who did what when. Plus, the categories are way too broad. The LAWYERS stack, for instance, lumps together documents produced by the corporate attorneys who worked for the “bankers” when they appeared to be legit with memos generated by criminal defense attorneys working for the indicted con men.
Only one of the stacks is worth preserving: TRANSCRIPT. The twenty-four hundred pages of trial testimony, though reduced to four hundred double-sided sheets of paper, are so unwieldy that I make a trip to Staples and buy the fattest three-ring binder I can find. While I’m there, I splurge on a box of tab folders, some hanging files, and four interlocking milk crates complete with carpet-friendly casters.
Back in my office, I hole-punch the transcript and feed it into the oversized binder and arrange the rest of the papers in the milk crates. I set the massive transcript binder on one side of a comfy reading chair and roll the freight train of discovery materials to the other.
Christmas came a little late for me in 2005.
Across the hall, Françoise and Max are starting a project of their own—a James Bond marathon.
“Come on, Dad,” Max shouts. “Dr. No is about to start.”
It’s tough to say no to Dr. No—it’s my favorite Bond film—but I stay put. And long after Max and Françoise have turned off the TV, I’m still reading. I’m not sure when I get to bed that first night—I’m guessing sometime after three a.m.—but I do know I’m back upstairs a few hours later.
Around ten the following evening, Françoise and Max try once more to coax me across the hall, this time to watch the New Year’s Eve fireworks.
I shout over that I’ll be right there, but I never make it. The spectacle arranged by the city of Providence can’t compete with the pyrotechnics of the royal bankers and their principal shill.
PART IV
SUBMISSION
Yes, as through this world I’ve wandered
I’ve seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.
Woody Guthrie, “Pretty Boy Floyd”
Evil is fiendish. Evil is malevolent. Evil is wicked. But isn’t there more to it than that? Yes, what the dictionary cleverly leaves out is for an elect few to know: Evil is fun.
Neil Zawacki, How to Be a Villain
THE MARK
Not since I plowed through Crime and Punishment has the printed word packed this kind of unremitting wallop. I can’t stop reading. I end up devouring the entire transcript, all twenty-four hundred pages, twice. The court record plunges me into a narrative of fraud and humiliation that’s impossible to fully believe. Or fully understand. Because no evidentiary material accompanies the testimony, it sometimes feels as if I’m reading a graphic novel without the graphics. The omission of the exhibits requires me to move back and forth between the bindered transcript and the milk crates in an attempt, often unsuccessful, to match citations to evidence. And there’s another frustration. The voices of the felons never surface since none of them testified.
Still, it’s possible to conclude this much: The Badische fraud, for all its five-star frills, was a basic advance-fee scheme. Cesar would induce his clients into signing contracts for loans of between one-hundred- and five-hundred-million dollars. But there was a catch. Before the lender—a one-hundred-and-fifty-year-old German bank—would hand over the funds, the borrower had to furnish all sorts of advance fees, including a so-called performance guaranty—one percent of one percent of the face value of the loan. That obligation cost Cesar’s ill-fated clients anywhere between one-hundred- and five-hundred-thousand dollars a pop. Oh, and there was another catch. The bank wasn’t a bank, and the bankers weren’t bankers. Badische (the word was pronounced BAD-ish by the con men) was a variant of the Nigerian 419 scams clogging junk folders the world over. With one big difference. The officers of the Trust apparently transacted their deals live and in person.
The dossiers of Cesar’s clients occupy one entire milk crate. Even with my overwrought sense of purpose, I know it will be impossible to contact every one of the victims. It’s essential to narrow the scope of the inquiry.
Of the five Badische “borrowers” who testified at trial, one stands out: a television executive named Barbara Laurence. It was Laurence who first brought the dubious practices of the royal bankers to the attention of the federal prosecutors. Absent her complaint there would have been no investigation, no trial, no convictions.
I reread her testimony and, not without difficulty, connect the statements she made on the witness stand with the materials in the milk crates. Then, hoping to add a little context and color to the written record of the fraud, I give Barbara Laurence a call.
“You’ll never believe it,” she says with a chuckle the first time I reach her. “You’ve caught me at the Waldorf of all places—where Cesar and I first met.”
I’m relieved by her good-natured response to the cold call. But my relief doesn’t last. As soon as I clarify that I’m a writer researching a story, she shuts down.
“I have deals I’m doing,” she says. “I don’t want them jeopardized by the crap Cesar and the other guys pulled. They made me look like such a fool.”
“But you took the case to the feds. You testified in open court using your name. Why not take credit for that?”
Laurence isn’t interested in being memorialized as a whistle-blower, but after considerable back-and-forth, she warms up to the prospect of revisiting the scam. “I hate what happened to me, but I love the story, so sure, go ahead, ask me anything you want.”
“How did you and Cesar first make contact?”
“Same way you and I did,” Laurence tells me. “By phone. He was expecting my call. He’d been prepped about my project by a mutual acquaintance. He already knew I was looking for $50 million to launch a television network.”
Cesar also knew that Laurence’s business plan had received the thumbs-down from a slew of investment banks and venture firms specializing in media financing. No one could make the numbers work.
{Courtesy of Barbara Laurence}
Barbara Laurence.
“Cesar wasn’t fazed,” Laurence tells me. Quite the contrar
y. Where others hit roadblocks, Cesar built on-ramps. “He said he’d done deals similar to mine as a managing director at Barclays.”
Their first conversation took place in April 1999, while Cesar was in Las Vegas. “He told me he was wrapping up a $6 billion casino deal,” Laurence remembers. “When I wondered out loud if the deal involved the Venetian”—a resort complex scheduled to open the following month—“he told me his negotiations were highly confidential and turned the discussion back to my project.”
Laurence made her pitch: “I explained I was putting together a home shopping network targeted at the Spanish-language market. I had already lined up purchase-and-sale agreements with ten TV stations, and had two more deals in the works. Cuchifritos—that was the name of my start-up—would eventually require some $350 million in long-term financing, but my immediate needs were more limited. Fifty million would get things going.”
“What was his reaction?”
“He liked what he heard. He told me one of his principal partners, the Badische Trust Consortium, might be willing to review my business plan. I knew of Barclays obviously. But Badische? Who the hell was Badische?”
Cesar explained the Trust kept a very low profile. That it served high-wealth clients demanding complete anonymity.
“I asked about the firm’s investment strategy.”
“What did he tell you?”
“Not much. He kept saying nondisclosure agreements prevented him from mentioning specifics.”
But this much Cesar could say: The Badische bankers were European aristocrats capable of underwriting loans from $10 million to $500 million. “And he said the Trust was keen to help minorities, which sounded perfect since my business was targeted at Spanish speakers.”
“Had Cesar done business with Badische before?”
“I asked the same question. As I said in court, he told me he had. In fact, he boasted he was the Trust’s exclusive liaison.”
By the end of their first call, Cesar had agreed to shepherd Laurence through the complexities of the Badische loan process, which started with a two-page request for financing. “Cesar reviewed the form, then forwarded it to some division of the Trust, I can’t remember which.”
I check the milk crates. “It was called the ‘cabinet fiduciary.’”
“That sounds right. Anyway, a few days later, Cesar calls with good news. The Trust has fast-tracked my proposal. He needs to know if I can meet the Badische board in New York the following week. I told him I thrived on deadlines. That it wouldn’t be a problem.”
After setting up the appointment, Cesar sent Laurence a memo stating: “You should have liquid capital facilities able to be accessed by you at short notice to cover any expenses related to the transaction such as documentation preparation requirements, travel, legal expenses, bank fees, performance guaranties, collateral expenses, accounting studies, etc.”
“I took that as a boilerplate warning,” Laurence recalls. “I’d closed enough deals to know it takes a lot of money to make money and that it takes even more money to borrow it.”
She and her team met Cesar, as planned, in the lobby of the Waldorf Astoria.
“So that was the first time you actually saw him?”
“That’s right.”
“What did he look like? I couldn’t find any pictures of him on the web.”
“Around forty. Six feet tall. Spanish. Maybe Asian. I’m not sure.”
“And your impression of him as a businessman?”
“Very slick. Armani suit. Designer glasses. Shiny hair. Cuff links. He was extremely polished. Overly polished.”
“Overly? How so?”
“He was like a cheap version of Richard Gere in American Gigolo. He wore all sorts of accessories like they were armor. To protect himself. To hide something.”
“What do you think he was hiding?”
“In retrospect I’d say everything. But again, that’s looking at things in hindsight. Back then he was much harder to read. I had no idea about his background, and there was something distinctly androgynous about him. I couldn’t tell if he was straight or gay. I never did find out. But it was very clear from the beginning that he had strong ties to one of the lead bankers, a guy named Colonel Sherry.”
“Anything else?”
“His belt.”
“Sorry?”
“Cesar wore this amazing belt. Hermès, Gucci—I don’t remember the brand. All I can tell you is it was striking.”
A striking belt? The phrase distracts me, recalling as it does another kind of striking belt Cesar once possessed.
“What happened next? After you met?”
“We waited in the lobby together. For hours.”
Eventually, a Badische representative escorted Cesar, Laurence, and her team—an accountant, a merchandising expert, and a former television president—to a suite on a high floor of the Waldorf Towers, an exclusive residential section of the Park Avenue hotel.
Colonel Brian Sherry, the administrator of the Badische Trust Consortium.
“As soon as we got into the suite, Cesar parked himself off to the side while the officers of the Trust introduced themselves. It was a crazy scene. A room full of old guys all wearing matching silk cravats, fancy lapel pins, medals. A receiving line formed so I could meet each of the kooks one by one.”
First up was Colonel Sherry, the thirty-nine-year-old administrator of the Badische Trust Consortium. “He told me he was a distinguished, decorated war veteran,” Laurence recalls, a boast even then she found hard to fathom. “He was very thin and very pale. He didn’t look like a war hero.”
“What did he look like?
“Like Young Dracula waiting for his next infusion.”
Next in the receiving line was the Baron Moncrieffe, at the time the Trust’s septuagenarian vice chairman. “He was the one who always wore spats. After kissing my hand, he tried to put me at ease by telling me to call him George.”
Then came the Trust’s executive committee director, Duke Eric Henri Alba-Teran d’Antin. “He said he was a nephew to the king of Spain.” The duke’s piercing blue eyes mesmerized Laurence almost as much as the grapefruit-sized goiter veiled by a loose-fitting ascot. “It was growing out of his neck like an elbow.”
At a certain point a door at the far end of the suite opened to reveal a tiny man covered in ribbons and medallions. “That’s when someone announced—I think it was the colonel—‘Prince Robert von Badische, Seventy-Fourth Grand Master of the Knights of Malta, Chairman of the House of Badische.’ The only thing missing were the trumpets.”
The men in the room bowed and averted their eyes. Laurence did the exact opposite; she gave Prince Robert the once-over. “He must have been pushing ninety. He wore a tailcoat, a sash, ribbons, pins, and a giant Maltese cross. I know this sounds hard to believe, but he was clenching a gold monocle in his eye, and every finger on both of his hands had rings. One ring had an emerald-colored stone the size of a doorknob. I have paperweights that are smaller than that thing!”
The Baron Moncrieffe, vice chairman of the Badische Trust Consortium.
To counteract the burdens of old age (and, quite possibly, the weight of the decorations), Prince Robert relied on an intricately carved gold-handled walking stick to remain upright as he made his way across the room.
As the prince shuffled forward, Colonel Sherry directed Cesar and his clients to the distant side of a long gilded table. The Badische executives arranged themselves on the near side.
“What was Cesar doing while all this was taking place?” I ask.
“Nothing. He was the lure. I was the fish. He had brought me to the shark tank. At that point, his job was pretty much done.”
The news disappoints me. I so wanted him to be the mastermind behind the whole operation. I keep the unfulfilled hopes to myself and let Laurence continue to describe the scheme.
“Everyone remained standing until Winky sat down in this ornate chair set up at one end of the table.”
; “Winky?”
“Sorry. That’s what I called the prince. Because of the monocle.”
I chuckle.
“Yeah, I suppose it does sound funny when I tell it now. But it wasn’t funny while I was living through it.”
“I’m sure.”
Once seated, Prince Robert asked the colonel to present a brief overview of the investment strategy governing the charitable trust bearing his family name. The colonel dutifully explained that the House of Badische, also known as the Trust, was a 150-year-old bank founded in Baden, Germany, and now based in Switzerland. It managed some $60 billion in assets that were invested in a wide range of sophisticated financial instruments: “structured finance, collateral guaranties, nonrecourse loans.” Sherry corroborated the claim by handing Laurence a one-page document titled “Transaction Experience” that listed some dozen Badische deals. The largest, a railroad contract connected to the Bechtel Corporation, had a stated value of €3.7 billion. Smaller transactions included a €29 million “supertanker sale” and €10 million in “French film financing.”
The colonel noted that the Trust’s “scope of interests” extended far beyond the itemized list. “At one point he said that the Badische’s timber holdings included all the trees in the Black Forest and that the Trust could easily finance my start-up ten times over.”
“How did you react?”
“I asked the colonel the same question I asked Cesar: ‘Where do you get your money?’”
“What did the colonel say?”
“He told us most of the Trust’s assets originated in Africa and Saudi Arabia and that a smaller percentage came from Europe. That’s when the duke chimed in that the Trust handled all of his funds, as well as the investments of his wife, Michaela von Habsburg, the archduchess of Austria.”
After Sherry gave his brief overview, it was Laurence’s turn to perform.
“I began my presentation with a broad analysis of the Latino television market, then bullet-pointed my way through the specifics of the Cuchifritos business plan.”
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