Scamming and spamming Boca provides high-end hideout for the infamous and notorious
bocaratonnews.com
Published Saturday, January 24, 2004
by Dale M. King
bocaratonnews.com
What is it about South Florida that seems to beget or forgive misbehavior and malfeasance?
“Is it the uprootedness of people, the extraordinariness of the landscape, the lack of seasons that untether you?” asked poet Campbell McGrath, a transplanted Floridian and author of “Florida Poems.”
“You do begin to wonder,” he said. “Is it something in the air?”
Scoundrels and scofflaws seem to find comfort in the big, impersonal, gated and guarded communities in and around big-city Boca.
Woodfield Country Club seems be have drawn more than its share – particularly from the white-collar world of securities fraud.
“A bunch of them are here,” said one Woodfield resident who asked not to be named. Many, the resident said, came over from Sunbeam, in the bad days following the bitter reign
of labor-slashing leader “Chainsaw Al” Dunlap.
Some are Tyco castoffs while others filtered in from Stratton Oakmont Inc., identified by federal officials as one of the most profitable – and most notorious – boiler-room operations.
“A boiler room is shorthand for a high-pressure telephone [stock] sales operation,” explained John Lattimore, assistant regional director for the Securities and Exchange Commission office in Miami.
“Basically, you have a bank of telephones,” he said. “It’s like a warehouse.” The intent, he indicated, is to bilk the people who succumb to a ritzy pitch.
At one time, the boiler room business in Boca was so bad that a section of Federal Highway was dubbed “The Maggot Mile.”
Lattimore said the people who’ve bilked customers out of cash in the phony securities business are beginning to move north out of Boca Raton.
And the News’ source in Woodfield agreed that many drop-ins from Stratton Oakmont have sold their property and headed back to New York.
A dozen years ago, though, according to a 1992 New York Times article, the scum-bums and bilkers were trickling up from North Miami and Fort Lauderdale.
“Now [in 1992], Boca is a very appealing location,” said Caroline Heck who, at the time, was an executive assistant United States Attorney in Miami.
But times apparently change, said Lattimore, who sees fewer boiler room operations in Boca as the market begins to spread north.
“Traditionally, Boca Raton has been a bad place,” he said. “But we see a lot more now in Boynton Beach, West Palm Beach and Naples. There’s a lot more geographic dispersion.”
That doesn’t mean Boca doesn’t have its share. The Boca Raton News recently received a letter from a city resident who described himself as a “grizzled veteran of many years on Wall Street.” He went on: “I am appalled at the goings-on in my community,” he said. “The latest scandals are particularly horrendous in that they involve so many of the multi-trillion dollar mutual fund industry companies.”
Some are more high profile than others. The New York Daily News, in a 2002 article, called Florida “the last refuge of scoundrels” and led the story with a reference to Scott Sullivan – the disgraced chief financial officer of WorldCom – who, at the time, was building a $15 million hideaway on Le Lac in Boca Raton.
The article points out one Sunshine State perk that virtually guarantees the floundering rich can hang on to their property.
“Investors and pension funds seeking to recoup dissipated WorldCom assets through litigation might think they have a claim on Sullivan’s gaudy temple of avarice,” the article says. “Not so. The state of Florida has a homestead law that shields a debtor’s primary residents from creditors – even if that debtor has no other assets that can be seized to satisfy what is owed.”
Actually, Sullivan may not be completely off the hook. Until a house is completed and occupied, the owner doesn’t qualify for a homestead exemption.
In the meantime, Sullivan is probably more concerned about a much smaller piece of real estate – a jail cell – and whether he might spend some time there for allegedly cashing out his WorldCom stock for a cool $45 mil.
Meanwhile, around Boca Raton – and back at Woodfield – the family of Ken Tripoli is waiting for his release from prison, possibly later this year.
Tripoli was one of more than 40 people either indicted or who pleaded guilty in April 2000 to fraudulent sale of securities. The indictment says Tripoli ran an office of Meyers Pollock Robbins Inc., a securities firm charged with enterprise corruption.
Another look through Boca’s rogues’ gallery also unearths the name of Anthony Damato, former president and chief executive officer of Eagle Building Technologies Inc. of Boca Raton. Last April, he pleaded guilty to one count of securities fraud.
According to the Securities and Exchange Commission, he admitted that from June 2000 to February 2002, he falsified company records and press releases, created fraudulent bank account statements and purchase orders and diverted privately invested funds to Eagle Building to create “the false appearance of substantial revenue to Eagle Building.”
Two Boca Ratonians – David Davidson and Lloyd S. M. Beirne – were among five indicted on June 2002 on charges of committing securities fraud. A U.S. Department of Justice press release says the indictment arises out of schemes to manipulate the prices of securities of two small-cap companies, Big City Bagels Inc. and Pallet Management Systems Inc.
Boiler room operations – a product of the 1980s – may have lost their luster in the new century. But Boca Raton has found something to replace it – spam. And we don’t mean the spicy meat by Hormel.
Steve Linford, founder and director of the United Kingdom-based Spamhaus Project, estimates 90 percent of the world’s spam e-mails are generated by about 200 individuals.
“Several are based in Boca Raton,” he said, “which has earned the unenviable reputation as the world’s spam capital.”
So, from land grabbers of the early 20th century to the spammers of the 21st century, Boca Raton has kept at least a finger or two in the mix.
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