Then there is good old-fashioned manipulation of the stock market. The boiler-room boys call this a ‘pump and dump’. The scammers convince investors that a worthless stock is a red-hot tip. As more and more people fall for the hoax, the share price shoots up. At the very top of the frenzy, the scammers then sell their shares and the whole thing collapses in a heap. The scammers have made a motza, and the investors are left with a worthless piece of paper.
At the end of every successful scam, the architect of the boiler room is left twiddling his thumbs and wondering what nefarious mischief he can get into next. It seems such a shame to waste that list of marks who fell for the last scam. But what if those marks didn’t lose all their money — surely they would be prepared to part with a little bit more to try to get their investment back?
That is how the unbelievably cruel recovery scam came into being. Victims are contacted by people who they believe are fellow victims, and asked to contribute to a fighting fund to try to recover their lost funds. Shazam, sucker — the boiler-room boys have taken you twice.
These elaborate cons are not random opportunistic crimes, but have been carefully calculated, developed and executed over time, many with links to organised crime. The QOCCI wrote in its report: ‘It is increasingly concerning that organised crime groups use the income they derive from these frauds to fund other criminal activities such as importing drugs, trafficking in firearms and, potentially, to fund terrorist activity. It is believed that some of Australia’s most notorious criminal identities have ultimate beneficial ownership of some of the companies operating boiler-rooms on the Gold Coast.’
And who might these criminal identities be? Step forward, Peter Foster, for one, and take a bow. More about him later.
The QOCCI found that complaints about boiler-room frauds did not accurately reflect the true scale of the problem. Victims were often embarrassed, felt the authorities would not take their complaints seriously and often tried to recoup their money by re-investing again, though these attempts were usually unsuccessful. Complaints were often made years after, by which time the trail was cold. In 2014, reported losses to Queensland Police from boiler-room frauds was $7.5 million. But the QOCCI said: ‘It is estimated that the potential loss to boiler-room fraud in Australia amounts to tens (possibly even hundreds) of millions of dollars each year.’ It said that between twenty and 30 boiler rooms are operating on the Gold Coast at any given time.
If there are any remaining doubts about the Gold Coast being Australia’s boiler-room capital, they can be laid to rest by the arrival of none other than Jordan Belfort. He is the American former stockbroker whose life story was the inspiration for Martin Scorsese’s 2013 film The Wolf of Wall Street, starring Leonardo DiCaprio. Belfort was convicted of fraud and money laundering during the 1990s, spent 22 months in jail and was ordered to pay back $100 million to those he scammed.
In 2015 he was seen driving around the Gold Coast in a new luxury Audi sports car after moving to Queensland, where his step-son is studying at Bond University. He now bills himself as a motivational speaker and charges between $129 and $795 a pop for people to hear him talk. He has also been linked to an Australian employment company that has received $10 million in taxpayer funding.
In 2014, the Wall Street Journal reported that Belfort was staying in Australia and living off royalties well outside US jurisdiction. Belfort wrote on Facebook this was the ‘most idiotic, venomous and blatantly false attack on my character’ and said he was committed to handing over profits from the movie to his victims. When reporter Liz Hayes quizzed him on this during a 60 Minutes interview, he stormed off, claiming he was the victim of a hatchet job. ‘You’ve got a lot of nerve, boy, I tell you,’ he fumed. ‘I was told this was a friendly nice interview. No one has ever treated me as disrespectfully as you have.’
His partner and fiancée, Anne Koppe, also took to Facebook to defend him. ‘Can you imagine going through every day being labelled a fraudster, a disgraced swindler, a convicted criminal, a notorious scammer?’ she wrote. ‘The list goes on and on, and all this over something that happened over 20 years ago. A mistake made, that let’s face it, was going on just about everywhere on Wall Street, in a juvenile time in your life where instant gratification seemed more important than delayed honest wealth.’
Oh, the poor lamb! Who could call him a wolf? Look, he only got $940,500 for the movie rights; surely he is entitled to a little something?
Let’s just put that all into perspective. After the movie, it is too easy to think of Jordan Belfort as a rogue Wall Street trader. He wasn’t. His company, Stratton Oakmont, was on Long Island, a long way from Manhattan, and it was a boiler room, plain and simple. Jordan Belfort was not a rogue trader, but a con man and thief operating a ‘pump and dump’ scam with worthless penny stocks that swindled hundreds of mum-and-dad investors out of their life savings. When he was caught, he rolled over and ratted on his friends, including shoe designer Steve Madden who spent 30 months in jail for his part in the scams. It is no wonder he is so at home in the Gold Coast.
Does he, or do any of the Gold Coast boiler-room boys, ever have any remorse for their cons? While he was under arrest in the US in early 2000, Belfort explained how he had pulled off the frauds to Ronald Rubin, the Securities and Exchange Commission enforcement attorney who was building the case against Madden. Rubin said: ‘I once asked Jordan if it bothered him that he was stealing old ladies’ life savings. Without missing a beat, he replied: “Of course. Why do you think we took all of those drugs?”’
His Wicked, Wicked Ways: Errol Flynn
IN Hobart, there is a blue Hollywood Walk of Fame–style star outside the heritage State Cinema on Elizabeth Street commemorating Tasmania’s most famous son: Errol Flynn. In 2009, the city finally acknowledged the famous actor 100 years after his birth and 50 years after his death. ‘I’m here to celebrate the birthplace of my father, to celebrate his films and all the happiness that he’s brought millions of people around the world,’ his daughter Rory Flynn told the ABC during a visit for the city’s unveiling of his commemorative star on the footpath outside Hobart’s heritage State Cinema. ‘I’ve found more cousins and relatives than I ever dreamed I have. I’ve heard more stories about my father growing up here, and I’ve actually learned a lot about my father.’
Flynn famously shunned Tasmania — for years he claimed he was Irish, as suggested by a Warner Bros. movie publicist — and for a long time it responded in kind. But today there is no shortage of Tasmanians happy to tell you about their grandparents’ exploits with the notorious swashbuckler. It seems that enough time has passed for people to forget that Errol Flynn was a rogue. He even called his autobiography My Wicked, Wicked Ways and, shocking read that it is, it did not even begin to document the outrageous behaviour and dastardly deeds he got up to.
It should come as no surprise that Flynn was descended from midshipman Edward Young, a deserter on the infamous HMS Bounty where the brutal Captain Bligh lost control of his ship to mutineers led by Fletcher Christian. As with many of Flynn’s claims, the truth of that is hazy. Flynn’s father, Theodore, was a renowned biologist who taught at the University of Hobart. Flynn claimed his dad was responsible for taking the first live platypuses to England, despite the young Flynn’s efforts on the voyage which left half of them dead. His mother, Lily, despaired at his antics — once, as a seven-year-old, he disappeared for several days — and they fought throughout his life. He would play for hours with a sword given to him by his mother that he later claimed was a relic from her ancestor on the Bounty.
Tasmania gave Flynn a love of the sea that would last throughout his life. In return, Flynn gave Tasmanians a wealth of stories, many about his fighting and drinking. He was said to have smuggled whisky into a dance, taught the boys at his private school how to masturbate and lost his virginity to his sister’s babysitter at the tender age of twelve. He was expelled from a number of schools before being moved to Sydney, where his uncertain academic care
er continued.
There, the then seventeen-year-old Flynn also managed to acquire for himself a fiancée, Naomi Dibbs, whose very proper parents were not excited to see their daughter wearing the small diamond engagement ring Flynn had borrowed money to buy.
Expelled from school again for fighting, Flynn set out to try to find work in Sydney. He managed to get a job at a wool-dealing firm, but after punting the firm’s petty cash he was fired and eventually ended up penniless. His cohort, a bruiser called Thomson, introduced him to the Sydney Razor Gang, which slashed and mugged people in the Dirty Half-Mile between Kings Cross and Darlinghurst. In the first week of Flynn joining the dangerous crew there was suspicion that Thomson had squealed on the gang and he was found in the gutter with his throat slit.
Flynn, knowing the gang had seen him with Thomson and would have their suspicions about him too, decided he had to get out of town, but first he needed money. He went to see his fiancée and they fought. Tempers rising, Naomi took off her engagement ring and flung it at him. It skittered under the piano. ‘Till then I never knew I had lizard blood in me,’ he wrote in My Wicked, Wicked Ways. He grabbed the ring and hocked it to pay for his fare to New Guinea and a new life of adventure.
There he quickly landed a job as a sanitary inspector for the Australian government. During the day, he wore a pith helmet and carried a cane. At night, he tumbled with the beautiful half-Melanesian wife of a senior government official, who one evening caught them in flagrante delicto. The first roundhouse swing from the stocky enraged official missed Flynn and flattened his wife; the second floored Flynn. Flynn and the official fought to a standstill. Flynn threw a vase, which missed, and then tripped the official. Flynn then struck the official twice with his knee in the face. ‘Australians fight for keeps,’ he said in his book.
That incident earned him a posting to the jungle, where he spent his time taking natives on ‘recruiting’ missions. ‘You could sell a few New Guineans for twenty to thirty pounds apiece to a copra plantation,’ said Flynn, cheerfully adding ‘slaver’ to his list of sins. A lifelong aficionado of whorehouses across the globe, he also managed to pick up a dose of ‘nail in the hoof’ — Aussie slang at the time for gonorrhoea — which was treated with injections of permanganate of potash direct into the urethra. Flynn tried to speed up the treatment by doubling the dose. He ended up having to rush back to Sydney for treatment after almost burning out his bladder.
Back in Sydney, he picked up again with his old fiancée, Naomi, and began an affair with an unhappily married but wealthy woman called Madge Parks, who was sophisticated, crowding 40 and rapacious in her sexual desires. Once again, he was broke. One night after a torrid bout of love-making, Flynn was lying in bed when his eyes fell upon Madge’s dressing table, laden with her jewellery. There were precious gems, some with gold and silver chains, and some on rings. He looked at the bed where Madge lay sleeping, naked with her lovely full breasts, and wrestled with his conscience. It took only a few moments. He fled with the loot, prising the gems from their settings and hiding the precious stones in the hollowed-out end of his shaving brush. He later admitted that ‘it was the most dastardly thing [he] had ever done’. He booked a passage back to New Guinea, but was searched by two policemen in his stateroom before the boat left. They failed to locate the gems and Flynn got away with it. If he had any ethics, they were well hidden too.
In New Guinea, he conned a chief into sending away all the young men in his village — effectively putting them into slavery — with a bogus magic trick that turned worthless copper coins into apparent silver shillings by coating them with quicksilver. Naturally, he eventually had to flee there too.
His ticket took him to the Philippines where he and a fellow scoundrel, Dr Gerrit Koets, whom he met on the ship, came up with a scam to win at cockfighting by putting snake venom on their bird’s beak. They managed to scramble aboard another ship with just their passports and loot as an angry mob bayed on the wharf for their blood.
Flynn then brawled, drank and whored his way across the seas to England, spending time in a jail in Djibouti, and losing his stolen jewels on the way. He found work as an actor in the Northampton Repertory Company. He was spotted by a talent scout for Warner Bros. and by 1935, aged just 26 but with a lifetime of experiences behind him, he found himself in Hollywood. His big break came as the lead in Captain Blood, a sword-wielding pirate caper that pigeonholed him into swashbucklers and tights.
In his private life, he married fiery actress Lili Damita, at the time a much bigger star than Flynn, and they had a ferocious relationship that ended in a bitter divorce. After they split, Flynn teamed up with his Charge of the Light Brigade co-star, another inveterate womaniser, David Niven. They shared a house together which they called ‘Cirrhosis-by-the-Sea’. Niven famously said of his housemate: ‘You can count on Errol Flynn, he’ll always let you down.’ They smoked dope together, drank and screwed remorselessly.
While Flynn barely mentions his old housemate in his autobiography, Niven, in his own autobiography The Moon’s a Balloon, said, ‘Flynn was a magnificent specimen of the rampant male. Outrageously good-looking, he was also a great natural athlete who played tennis with Donald Budge and boxed with “Mushy” Calahan. The extras, among whom I had many old friends, disliked him intensely.’
Niven went off to fight in World War II, but Flynn stayed at home in Hollywood — he failed his medical due to chronic heart problems, back pain, malaria, tuberculosis and a number of venereal diseases. He chose to allow gossipers to label him a coward rather than let his fans find out he was less than the perfect specimen. While Flynn was winning the war single-handedly in Hollywood with movies such as Objective Burma, Niven was calmly telling the men he was about to lead into action: ‘Look, you chaps only have to do this once. But I’ll have to do it all over again in Hollywood with Errol Flynn.’ Scandal-mongering biographer Charles Higham alleged in his book Errol Flynn: The Untold Story that Flynn had been a Nazi spy, an assertion that even the head of British Intelligence dismissed. Niven said, ‘There is no way Errol could have been a spy — he was way too busy screwing girls.’
However, there was no doubting Flynn’s enormous appetites. He drank massively and took cocaine to cure his hangovers. There was also no doubting Flynn’s taste for much younger women — or, rather, girls. In 1942, that came home to roost when Flynn was charged with statutory rape — having consensual intercourse with a minor. It was alleged they had had sex at a notorious Hollywood bachelors’ house rented by Stephen Raphael, Bruce Cabot and Freddie McEvoy.
No sooner had he been charged with that offence, a second minor reported that she had been raped by Flynn a year before while crewing on his yacht, the Sirocco. Responding to that charge, Flynn said if a young lady took the liberty of inviting herself on board your yacht, ‘who the hell asks her for her birth certificate, especially when she is built like Venus?’
The newspapers had a field day. Flynn’s appearance before the grand jury provided some welcome light relief to the grim news from the war front. GIs adopted the phrase ‘in like Flynn’ if they got lucky with a girl and everyone had a laugh about being a great ‘swordsman’.
The girls told their story and Flynn told his. The grand jury threw the case out.
The night after the hearing, Flynn received a call at home.
The caller refused to identify himself and instead told him to tell Jack Warner — the head of Warner Bros. studio, which held Flynn’s contract — that Joe had called and said hello. Flynn started to argue that there must be a million Joes out there.
‘Just tell him Joe called you. If Warner knows what’s good for him and if you know what’s good for you, you will just drop a little thing called ten Gs at the corner of Melrose and La Cienega,’ Joe told him.
By now Flynn had decided it was a crank call. He wisecracked about delivering the ten thousand dollars in nickels and dimes.
‘Okay, wise guy,’ came the reply. ‘I guess you don’t know what’s goo
d for you. You’ll find out.’
Flynn told him to go to hell and hung up. He thought nothing more of it.
Two days later, in a virtually unprecedented move, the district attorney’s office announced it was going to override the grand jury’s decision and go ahead with the case on the same charges. Flynn retained Hollywood’s top lawyer at the time, Jerry Geisler, and was taken down to the police station to be fingerprinted and measured up for the striped prison suit he would be wearing if he was found guilty.
Geisler got to work and quickly discovered that there was a lot more to the case than appeared on the surface. In those days, Hollywood had a strong moral code — at least they wanted to appear that they did — and any scrapes actors or actresses got into that could harm their reputations had to be hushed up. The previous district attorney, Buron Fitts, had made quite a few scandals quietly disappear for the big studios, who in return were very generous with their financial support come election time. But it wasn’t enough to get Fitts a fourth term. In a landslide victory, Fitts was ousted and his rival, ‘Honest’ John Dockweiler, got the top job. The army of new junior district attorneys he brought with him were hell-bent on forging their reputations and teaching the studios a lesson. The first guy who stuffed up was going to be hit hard.
Flynn was the first guy.
The case in the Los Angeles Courthouse turned into a show trial of Flynn’s roistering, rogering lifestyle. First onto the stand was Peggy Satterlee, the beautiful chorus girl. She appeared in flat shoes and bobby socks with her hair in pigtails. Peggy told the courtroom how Flynn had forced himself upon her on the bunk of his yacht. How high was the bunk? Geisler asked. She indicated it was at knee height. Geisler produced a photograph showing it was almost five feet high. Was it possible to get her up there forcibly?
Dirty Rotten Scoundrels Page 4