Subscribe to Cigar Aficionado and receive the digital edition of our Premier issue FREE!

Email this page Print this page
Share this page

The Digital Detectives

The Burgeoning World of Corporate Security Has Gone From Cloak and Dagger to Computers and Databases
Daren Fonda
From the Print Edition:
Denzel Washington, Jan/Feb 98

It was a case tailored for New York's top private eyes; a tale of true-life crime that read like pulp fiction. The setting was Wall Street. The thief: a young man with a taste for fast cars, fine suits and big-money gam- bling. His crime: stealing nearly $14 million (the exact amount is in contention) through an embezzling scheme.

His name was Hunt. He grew up in the Bronx and landed a job at M.D. Sass Investor Services, a private New York money management firm with billions in accounts. He was working as a clerk, and by age 27 was arranging wire transfers for the firm's clients. When clients requested cash, he would call the brokerage houses where the money was invested and instruct them to deposit the funds in Barclays, Sass' custodial bank for cash management accounts. Then he would order Barclays to transfer the cash to his clients' account.

He soon discovered he could siphon off millions. According to investigators, he realized he could request more money than his clients demanded and pocket the difference. He would instruct Barclays to wire the money into a Sass profit-sharing account at the brokerage house Bear Stearns. From there, he could fax instructions to Bear Stearns to wire the funds to one of his own accounts. The instructions required a signature from Sass' chief financial officer, which he photocopied and placed on the letter. Clients wouldn't notice the losses because he could hide them in the firm's multi-layered accounting system. Investigators said he tested the plan slowly and found it virtually flawless.

He started living the fast life. He bought two large houses in the Hamptons, where neighbors said he held huge parties. He took gambling trips to Las Vegas and Atlantic City and spent thousands on concerts and sporting events. He bought more than 30 sports cars, including a Porsche, Lamberghini, a Jaguar and several Grand Prix racing cars. He competed in races and operated his own racing company. He was "a magnet for women," investigators said.

Sass coworkers noted that he frequently wore new Giorgio Armani suits to work. But he was always "meticulously" dressed, said a former colleague, and the company had no reason to suspect he led such a dashing double life. He tripped up, though, when he sold two sports cars to an auto leasing company in Atlanta. The FBI was investigating the car buyer and his leasing company for a separate fraud matter when agents discovered a transfer of more than $200,000 to one of his Merrill Lynch accounts. They froze the account, and Merrill Lynch notified his bosses at Sass. A little digging revealed that he may have embezzled millions. But the firm didn't know the scope of the scam, or how it had transpired. A decision was quickly made: Call Kroll Associates, New York's leading white-collar detective agency.

On an early August afternoon in 1996, Kroll's New York office received a "panic call" from M.D. Sass. The investment firm expressed grave concerns. The FBI had frozen some of the suspect's bank accounts, so he knew he was under investigation. But the company was reluctant to confront him or call the police without getting more details. The situation was urgent because Sass feared that he might try to flee in a take-the-money-and-run scenario. The lawyers wanted Kroll's advice, fast.

After reviewing the case, Kroll's operatives quickly came up with a strategy. The best tactic, they reasoned, would be to try to strike a deal with the suspect. They would be there for backup, and could try and persuade him to surrender peacefully. By hitting him with the evidence they had--and intimating that they would soon discover more--he might be persuaded to cooperate.

The plan worked. The suspect and his attorney sat down with Kroll agents and Sass lawyers. He admitted to the theft and agreed to help recover the stolen funds.

Kroll's detectives soon uncovered a nearly $14 million loss. Along with the accounting firm Deloitte & Touche, they located more than 50 accounts that he had set up with banks and brokerage houses using separate or similar names. They discovered he laundered loot through front companies listed as Q2 Projects and Grand Prix Motor Sports. They found a note suggesting that he'd secreted $3 million to an offshore bank account. They scoured thousands of his papers, unearthing payments to friends, casinos and a cash flow through dozens of shell companies in different states. They recovered more than $5 million. Most of the rest, they concluded, had simply been lost or spent.

Five months later, Hunt pleaded guilty to one count of bank fraud and was sentenced to six years in prison.


1 2 3 4 5 6 7 >

Share |

You must be logged in to post a comment.

Log In If You're Already Registered At Cigar Aficionado Online

Forgot your password?

Not Registered Yet? Sign up–It's FREE.

FIND A RETAILER NEAR YOU

Search By:

JOIN THE CONVERSATION

    

Cigar Insider

Cigar Aficionado News Watch
A Free E-Mail Newsletter

Introducing a FREE newsletter from the editors of Cigar Aficionado!
Sign Up Today