by Guy Lawson
Sam decided he needed to start the next chapter of his life. He needed a place to live permanently. In the phantasmagoric world Sam inhabited, he couldn’t live in just any house. He was a hedge fund hero. Sam wanted a home that re"ected his position in society—a mansion where he could live out fantasies of a being a Bruce Wayne–like play-boy millionaire.
Winding up the driveway of 52 Oregon Road in Mount Kisco, Sam knew he’d found the spot. The house wasn’t so much a mansion as a monument to excess. The owner was Donald Trump. The self-promoting tycoon had lived there himself. Like Trump, everything about the house was comically over the top—so impossibly huge for one person to live in that it signi!ed only massive insecurity. Set on a hill overlooking acres of woodlands, the grounds consisted of an apple orchard on one side and a meadow on the other. In front of the house was a courtyard with a large stone peeing-boy fountain.
The eight-thousand-square-foot Tudor-style manor had been built in 1913 for the Heinz family. Donald Trump now rented it out for $22,000 a month. Trump had renovated the house in his uniquely garish style. Inside there were oversized chandeliers, and the bathrooms were done in marble and glass; the giant kitchen was stocked with the latest stainless-steel appliances. Next door, across a small walkway, was a chapel that the Heinz family had used for formal balls.
Sam turned the chapel into the adult version of a boys’ club room. Always a music bu#, with a passion for playing the drums, Sam bought high-end instruments for jam sessions—enough equipment for an entire band. When the Allman Brothers came to New York, the band’s drummer jammed with Sam. Sam also built a trading room in the chapel to exactly replicate his trading room at the boathouse. Sixteen screens were set up in the same array as he had at the o$ce. A direct video feed was established between the chapel and Bayou, but it functioned in only one direction, allowing Sam to watch his clerks. The rest of the chapel was turned into a party room, with pinball machines and a giant "at-screen television and a well-stocked bar. He bought an eight-hundred-gallon saltwater !sh tank and stocked it with exotic species. He also acquired a menagerie of reptiles. Israel had chameleons, bearded dragons, geckos, South American horned frogs, and two giant African turtles that he kept in a pen.
“My favorite was a fourteen-foot-long reticulated python who would ball up on my keyboard while I traded,” Israel recalled. “His name was Herman. He was my man. I loved reptiles. They strike quickly and they kill quickly. They don’t prolong death like a spider might. And they don’t eat more than they need.”
But all was not well in the Trump house. In the span of three weeks Israel went to the emergency room three times when his right leg and foot became paralyzed. His lower back was hurting so much he could no longer stand when he urinated; he was forced to sit on the toilet for long stretches of time as he tried, often in vain, to pass water.
Romantically, things weren’t going well either. An ongoing "irtation Sam had with an attractive young female literally ran into a brick wall when they fought over her involvement with another man.
“As you know, I am exceptionally good at reading and assessing people and situations,” Sam e-mailed her after the argument. “I have to gauge and assess the markets each day, wagering hundreds of millions and having to be right consistently. I believe I do a pretty good job.”
Sam wrote that his intuition had told him that the woman was going to see her ex-boyfriend. “I was quite upset, but I resigned myself to not asking you about him no matter what,” Sam wrote. “So I decided to go for a drive in my new Porsche. Not fast, mind you, because it had begun to snow. I took the weather to be a bad omen for me.
About ten pm I had one of my real absofuckinglutely unmistakable clairvoyant realizations that you’d done the dirty deed with him. That was certainly your right.
That was when a truck pulled in front of me and I lost control and drove the Porsche into a brick wall.”
CHAPTER NINE
Adventure Capital
By the end of 2003, the problem had become the Problem. The tattoo of the Little Devil Sam had put on his hip seemed to have been brought to life as a gremlin sitting on his shoulder constantly whispering in his ear. All Sam could think about was solving the Problem. Somehow, somewhere, there had to be a way to make $100 million very, very, very quickly.
Bayou was now sitting on nearly $150 million in cash. There was more than enough cash !ow to keep the fund a!oat inde"nitely, according to Marino’s “business plan.”
But Sam didn’t share Marino’s con"dence that they could keep up the fraud. All it would take was one employee or one investor or one regulator to stumble onto the truth. Sam wasn’t able to physically cope with the stress.
Israel knew he had to do something radically di#erent if he was going to solve the Problem. He didn’t tell Marino of this dawning realization. Sam could see that conventional trading was never going to yield the kind of miracle windfall Bayou now needed. Sam had to up the stakes. He had to "nd a way to roll the dice. He began to look at the money invested in his hedge fund as his pile of chips in a high-stakes poker game. He was playing for his freedom, Sam knew—and possibly his life.
Venture capital (VC) was one way to garner extraordinary returns. It would take time, Sam knew, but it was better than doing nothing. Sam had a friend who worked in VC.
John Ellis was the father of a boy in Sam’s son’s class at the Hackley School. Like most parents at Hackley—like Israel—Ellis came from a privileged background. But Ellis’s pedigree was particularly impressive. His uncle was President George H. W. Bush. His "rst cousin and close personal friend was President George W. Bush. Ellis belonged to the trusted inner circle of the president. The Israel and Bush families had crossed paths over the years, through the oil business and Wall Street connections. Sam believed Ellis belonged to the tiny elite who really ran the world—the chosen few.
“If you’re going to bring me a company, make sure it’s going to go up tenfold, not by a few points,” Israel said to Ellis. “I want businesses that can turn $20 million into $200
million.”
KYCOS was a company with that kind of promise, Ellis believed. In the wake of 9/11, the Patriot Act required banks and corporations to perform due diligence on their clients to ensure they weren’t laundering money for terrorists. KYCOS (Know Your Customer Outsourced Services) was going to sell access to a database for companies registered on the Isle of Man and the Cayman Islands, two tax haven jurisdictions. On Israel’s instruction, Ellis told Marino the start-up had global potential. A similar company had recently sold for $775 million. For a mere $10 million, Israel and Marino could acquire a majority interest.
Sam was intrigued. But he didn’t deal with VC proposals directly; he didn’t have the time or energy. Israel had picked Dan Marino to run alternative investment strategies for Bayou. Marino had taken to the job with gusto, forming a company called IM
Partners, the initials taken from the initials of their last names. The "rst $1 million investment in KYCOS was followed by another $4.5 million. As a new investor, Marino traveled to the Isle of Man to attend a board meeting. It was the "rst overseas trip of his life. The company was operated by a group of Englishmen with upper-class accents who fawned over Marino.
At an evening reception, Marino was approached by an American businessman who said he was promoting a company called Debit Direct. The man was literally a giant—six-six, with massive hands and the distinctive features of a person who had the disease of gigantism. He said his name was Jack O’Halloran. The nature of the business O’Halloran was promoting wasn’t entirely clear. He said Debit Direct was going to use the Isle of Man as a place for online gamblers from America to keep their digital “wallets.” He was also going to compete with Western Union and MoneyGram. Like the man himself, the ideas were gigantic. Marino said he didn’t have time to talk, but O’Halloran should contact him the next time he was in the United States.
A few weeks later, O’Halloran called from New York. Marino invited hi
m up to the Bayou offices in Connecticut. Israel generally left VC meetings to Marino. But when Sam dropped in on the meeting with O’Halloran, he lingered. O’Halloran was not just another supplicant in a suit. O’Halloran was larger than life—literally. He had a bone-crushing handshake and a booming laugh that he let loose constantly. As Sam listened to O’Halloran talk about his various business ideas, it seemed to Sam that he looked uncannily like the Hollywood villain Jaws from the old James Bond movies. The lantern jaw, the wide-set eyes, the overhanging brow—his face was somehow familiar.
When the meeting broke up, Israel invited O’Halloran upstairs to see his trading room. With a look of wonder, O’Halloran wandered past the computer screens with their pulsing data streams.
“This is like being inside a rocket ship,” O’Halloran said. “Your o$ce looks like the set of a movie I was in.”
“What movie is that?” Israel asked, amused.
“Superman,” O’Halloran said.
“You were in Superman?”
“I was the big dumb guy who couldn’t make his laser eyes work right,” O’Halloran said. “The character named Non.”
The penny dropped. Israel did recognize O’Halloran—not from the James Bond movies, but from similar roles as the archetypal giant evildoer.
“You were in Dragnet, too, right?” Israel said.
“That was me,” O’Halloran said. “With Tom Hanks. I spat on Dan Aykroyd in that one.”
Sam hooted in delight. O’Halloran said he’d also had a bit part in King Kong in 1976, playing a sailor thrown into an abyss by the giant gorilla. O’Halloran’s stories were amazing, each more improbable than the last. An expert name-dropper, O’Halloran told Sam about the actresses he’d bedded, like the French beauty Catherine Deneuve. He told Sam he’d been a heavyweight boxer, "ghting as “Irish” Jack O’Halloran. A rising contender, he’d been slated to "ght Muhammad Ali in the early seventies. The match didn’t come o#. But O’Halloran had fought George Foreman in Madison Square Garden in 1970, getting knocked out in the fifth.
“I’m a huge fight fan,” Israel said. “I’ve met Ali a couple times.”
On and on O’Halloran went with improbable tales that had the unlikely virtue of appearing to be true. Israel and O’Halloran soon found points of connection as the giant slowly pulled the hedge fund trader into his orbit. O’Halloran said he’d played professional football for the Dallas Cowboys in the early sixties. Sam’s family had owned a minority share in the New Orleans Saints for decades, and his father was friends with many famous NFL players. O’Halloran had a grandiose manner, an a#ect that Sam could relate to. It was impossible to tell when O’Halloran strayed into "ction.
Sam didn’t much care. The stories were worth the price of admission. Like O’Halloran’s claim to be the secret love child of Albert Anastasia, boss of the Gambino crime family and leader of the notorious Murder Inc. The assertion was preposterous on its face: O’Halloran looked nothing like the swarthy mobster known as the Mad Hatter. But it was also impossible to disprove. Anastasia had been shot in a barber chair in New York in 1957—an iconic murder alluded to in The Godfather. No one could con"rm or deny O’Halloran’s claim—and who cared anyway?
Sam suggested they have dinner that night. He took O’Halloran to the Willett House, an expensive steak and seafood restaurant. Israel ordered lobster, along with jugs of iced tea. O’Halloran continued to pitch Debit Direct. Away from the KYCOS group, O’Halloran came on strong. Online gambling could make billions, he said. Israel was dubious. But he was having a great time. Sam relished any chance to think about something other than the Problem.
Over dinner, O’Halloran told Sam he was writing a book about the assassination of President John F. Kennedy. Not just any book, either. The book was O’Halloran’s "rst-person eyewitness account of the day of Kennedy’s assassination. O’Halloran said he’d been in Dallas in November of 1963, sent as a secret emissary by the Ma"a. Sam was extremely excited. Like so many others, he’d been fascinated by the various conspiracy theories surrounding the death of President Kennedy. It remained one of the great unsolved mysteries, Sam believed.
Sitting in the steak house, O’Halloran told Sam he knew the truth about Kennedy’s death. For decades he had kept secret his knowledge of that day, he said, for fear of losing his life. But now he was "nally going to solve the mystery and challenge the most basic assumptions about American history. O’Halloran said he knew who killed Kennedy—and why.
“I’d read forty books on the Kennedy assassination,” Israel recalled. “I was an animal for those books. My grandfather was tight with Hale Boggs—the only one to dissent from the Warren Commission and the single-bullet theory. Boggs died in an ‘airplane crash’ ”—here Israel made inverted commas with his "ngers to show quote signs. “The last job Lee Harvey Oswald had before Kennedy was killed was working for my uncle’s company—Reily Co#ee Company. Six of the employees at Reily Co#ee wound up working for the CIA, so tell me that was coincidental. My family was very connected in New Orleans, which was tied up to the whole conspiracy to kill Kennedy.”
That night, Sam sat down to read the outline of O’Halloran’s proposed book Mosaic: The De"nitive Account of How and Why President John F. Kennedy Was Assassinated, by One of the Six People Still Living Who Knows the Full Story. The tale put O’Halloran at the center of events on the day Kennedy was murdered. O’Halloran wrote that the famed gangster Meyer Lansky had personally sent O’Halloran to Dallas. To provide cover for his mission, O’Halloran related, he’d tried out for the Dallas Cowboys. The day before the assassination, the coach of the Cowboys invited O’Halloran and a group of players to a party at the team owner’s mansion. “Night in Egypt” was the theme of the gathering. The guest of honor was J. Edgar Hoover, then head of the FBI. Richard Nixon was in attendance, along with a young oilman named George H. W. Bush. A late-night arrival was Vice President Lyndon Baines Johnson, arm in arm with his mistress.
The notables secretly convened in a back room. When Johnson emerged he appeared flushed, excited.
“After tomorrow those goddamn Kennedys will never embarrass me again,” Johnson whispered to his mistress. “That’s no threat—that’s a promise.”
O’Halloran claimed he was there to overhear the remark. The next morning, according to his narrative, he was out for a predawn run when he happened to see a mobster named Johnny Rosselli slip through a manhole into Dallas’s sewer system.
O’Halloran claimed that Rosselli went underground to set up in a sniper position in a culvert in Dealey Plaza where he would have a clear shot at the president’s motorcade.
Decades of accumulated questions about what really happened that day would be answered by O’Halloran’s magnum opus. Lee Harvey Oswald was a patsy. The shots heard from the Texas School Book Depository were blanks. Rosselli had "rst shot Kennedy from the culvert, then a mysterious second shooter had "nished the job. The murder was the result of a conspiracy by the group of men who secretly controlled the world—a cabal of criminals from the underworld in alliance with elites from the “Upperworld.”
History had recorded that a man named Abraham Zapruder had captured the scene with his home movie camera. O’Halloran claimed that the Zapruder "lm released to the public had been doctored. Seven frames had been removed. In those frames, the Zapruder "lm showed conclusively who killed Kennedy: Secret Service Special Agent William Greer. It was Greer who was driving the limousine. After the "rst shot from Rosselli struck the president, Greer turned in the driver’s seat and pulled out a gun with a silencer attached to the muzzle and "red a single shot. “That was all that was needed,” O’Halloran wrote. “As Abraham Zapruder’s "lm would record for all time, that single mercury tipped bullet exploded inside the President’s head, blasting out a shower of blood, brain tissue, and pieces of fractured skull.”
SAM LOVED THE STORY. The next day, Israel told Marino that IM Partners was going to invest $2 million in Debit Direct, starting with half a million in cash
immediately.
Marino refused to send the money. The accountant wanted to study the proposal "rst.
But Sam circumvented Marino, instructing an employee to send $500,000 to Debit Direct with no contract or agreement about what precisely IM Partners was purchasing with Bayou’s money.
O’Halloran then told Sam he could also buy 50 percent of the book and "lm rights to Mosaic for a measly half-million dollars. Israel took the idea to Marino. But when Marino read Mosaic he thought it was awful—and totally unbelievable. Sam himself didn’t fully credit O’Halloran’s yarn either. But it didn’t matter. Another half-million dollars winged its way into the bank account of Sam’s new acquaintance. As half owner, Sam now represented the book as a kind of quasi–literary agent. He prepared a submission letter to send to book editors in Manhattan. “Jack O’Halloran is about to change the way you look at the world,” Sam wrote.
But the distraction of promoting the book didn’t change the gloomy reality Sam inhabited. Christmas of 2003 was the "rst time Sam was forced to be away from the family, a fact he found hugely upsetting. Despite Sam’s absence, the normal holiday traditions would continue at the Israel home. As usual Janice hired a local decorative artist named Debra Ryan to dress the Israel home for the holidays. Ryan had been making the house festive for the past four years. She’d also done extensive painting at Bayou’s boathouse. Over the years, Ryan had developed a friendly rapport with the Israels. Tall, blond, and pretty in a tomboyish way, Ryan had an easy, joking manner that meshed with Sam’s sensibility. This year, when Ryan arrived to start work, Janice explained that she and Sam were getting a divorce. But Sam would be coming by the house to pick up his son for a visit, she said.
It was freezing rain when Ryan and her assistant went outside to festoon the house with large red ribbons. As she worked, Ryan heard a distant voice calling her name.
Sam was at the foot of the driveway, beckoning her. She walked to the street to say hello. Israel paced on the far side of the fence, accompanied by a large African American man—the court-appointed supervisor for Sam’s visits with his son. Sam was smoking a cigarette and shaking from the cold.