Re: 3/5/00 - [CGYC] Lives caught in orbit of devotion, deception
Lives caught in orbit of devotion, deception
Charisma: A knack for attracting lovers, investors, admirers has helped Scott Caruthers enrich himself in ventures that led others to personal or financial ruin.
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By Dan Fesperman and Ann LoLordo
Sun Staff
First of two articles
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Also see From Monday
Families, old loyalties abandoned
Devotion: As Scott Caruthers tightened his circle of followers, the details of his 'mission' grew clearer. So did the price to be paid.
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Long before leaving a string of broken families in his wake, long before co-founding a company that froze the investments of 12,000 stockholders and long before being accused of leading a cult in the suburbs of Carroll County, Scott A. Caruthers took aside a business associate to deliver the inside story on himself: He was a space alien who communicated to the mother ship through his cats.
The year was 1992, the occasion was an after-dinner conversation at Caruthers' home, and the business associate was Bob Bonnell III, who was trying to market a Caruthers idea that would eventually cost backers more than $2.7 million.
"He said that the mother ship was waiting for the right time," Bonnell recalled, "and that his role was to prepare the world, because everyone who was allied with him would be rescued before any calamity hit. ... All of that precipitated my saying, 'Well, you know, Scott, some people believe Jesus Christ is going to return to the world and save people.' And he said, 'Who do you think I am? Jesus Christ was great, but who do you think I am? And what do you think the mother ship is? Doesn't it say in the Bible, "When I return, it will come in the clouds"?' And then he winked at me and said again, 'Who do you think I am?' "
Who, indeed. It is the question at the heart of a vast and troubling riddle concerning Caruthers, 54, who until now has largely escaped public scrutiny, even while enriching himself with ventures that have led others to personal or financial ruin. Only recently have a handful of court cases and private inquiries begun prying open his past, and the bizarre disclosures have caught the attention of authorities including the Maryland State Police and the Securities and Exchange Commission.
The record shows that Caruthers is a high school dropout and an Army washout, a rather ordinary-looking fellow who lives in a rather ordinary-looking home.
Beyond that the truth is elusive: Since age 17, Caruthers has fashioned a far more exotic version of himself. According to dozens of people who've met him over the years, he has posed as an astronaut, a war hero, an Air Force test pilot, a CIA agent, a clairvoyant and a space alien. By doing so, and by having a few creative business ideas along the way, he has displayed a charismatic, if unlikely, knack for attracting lovers, investors, admirers and valuable business connections around the world.
As a result, he controls offshore accounts, foundations and trusts that enable him to spend lavishly. In June, he threw a party costing more than $500,000 to launch his newest career -- as a cyberartist depicting aliens and their spaceships. He has hired a limousine to transport an ailing cat to a Philadelphia veterinarian. Excess also marks his personal life. Twice he has been married at the same time to two women, unbeknown to them. According to purported journal entries fished from his garbage by a private detective, he has five women devoted to his every need.
They are among a group of eight adults and four teen-agers said by detractors to be at Caruthers' command as part of a cult in Carroll County. Three of the adults live with him in a two-story brick colonial on a cul-de-sac north of Westminster; the others live nearby, and all but two met him through his dealings with an Owings Mills law firm, Gershberg and Associates.
Their motivation, according to their journal entries, is survival itself: In the coming years, the super-alien Caruthers will safely lead them through cataclysmic "Earth changes" to a reordered future.
The journals and other documents depict an existence dominated by themes that have long characterized Caruthers' life -- controlling behavior, extravagant spending, womanizing, a fascination with cats and, draped across it all, a lavish cloak of mythology. It is a fantasy world in which Caruthers is the dashing leading man, keeping a tight rein on followers while recruiting other prospects through the Internet; building up finances while scouting real estate listings for future compound sites.
The group's journal entries -- covering seven months and filling more than 2,000 pages -- prompted Carroll County Circuit Judge Luke K. Burns Jr. in June to remove four children, ages 4 to 9, from the custody of two mothers in the group, including a 9-year-old girl who was living at Caruthers' home.
The emotional stakes of becoming one of his followers might best be described by Elaine Gershberg, the wife of lawyer Richard Gershberg. On July 4, 1998, she wrote in a journal entry she sent to Caruthers:
"I didn't want to pull out of my conventional life at first. It was comfortable and fun ... What started out for me as guilt and sadness and grief for something special that was lost, is now something I know to be necessary and even appreciated, for now I live the Truth. The most important thing is there will be no marriage or family unit like what currently exists ... I used to feel bad for my children because they are not leading a 'Normal' life like their friends, even though they still can have fun and enjoy themselves for the most part. I'm not sure what they think of my relationship with their father, but [I] have come to understand that they will appreciate and understand when the time is right. After all, it's for their survival and my own and that's what it's all about. I am teaching them and you are teaching me about following Command, and duty."
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Caruthers says that he and the group's writings have been misinterpreted, and in December he invited two reporters to his home to talk about it. Flanked by three of his supporters and a favorite cat, he sat by a computer screen during a three-hour interview, speaking in a soft voice.
After decades of exercising and weightlifting, he is trim and muscular. But the first thing one notices are his eyes. A glittering gray-blue, they never seem to waver during conversation, widening with a sudden flash whenever he drives home a point.
The "journal entries" are anything but, he said: Some are forgeries concocted by his enemies, who wish to blame him for failed investments or broken marriages; others are the fruits of elaborate role-playing. He said the group members are his employees, and they send him their jottings as part of an effort to write science fiction.
Caruthers said he has never told anyone that he works for the government; nor has he ever claimed to be an astronaut, a CIA agent or a space alien, he said. He also claimed that he has been married only twice, although when confronted with evidence of three other marriages, he said he had simply forgotten about the rest, unable to remember events "that have no significance now."
As for the allegation that he leads a cult, he said: "To my understanding, cults are usually well-financed. They are usually effective in what they do, and they usually deal with problems, situations or issues -- whatever you want to call them -- in a different manner than we deal with things. Well, we obviously don't have deep pockets. We certainly don't have the power to do anything to anyone, nor do I desire to. And the reason for that is there is no cult. There never was."
Caruthers first publicly laid out his version of events in June, in response to the child-custody cases initiated by two men whose wives are Caruthers' followers. He enlisted the help of syndicated columnist and longtime acquaintance Jack Anderson, who signed an affidavit ridiculing the idea that Caruthers led a cult. Anderson, 74, said in the document that he and Caruthers were "collaborating on a science fiction novel."
But in a recent telephone interview, Anderson said that he only glanced at the affidavit before signing it. He said he doesn't recall Caruthers mentioning collaborating on a science fiction novel until the day he signed the document, June 25. That was 10 days after Caruthers learned that a private detective had obtained the journal entries from a fax machine cartridge left in Caruthers' garbage.
In addition, three people have verified that the journal entries describe actual events. One is a man who severed contact with the group last summer, Lewis Dardick. He said Caruthers encouraged his followers to type up important daily thoughts and fax the entries to his house. Dardick's wife, Amy, is still in the group, and Dardick has custody of their three children.
But the information that most contradicts Caruthers comes from more than 40 people who know him, some since childhood. Their descriptions map the strange and circuitous path that led Caruthers to his current status, portraying him as a free-spending charmer with a quick mind and expansive imagination; someone who manipulates by flattering one second and threatening the next, and whose stories about himself grow ever more fabulous.
"Like the great impostor, that's what he's like," said his second wife, Una Crothers, who only recently learned that Caruthers was twice married to other women while married to her.
"He could get you to drink orange juice with arsenic in it. He just had a way of pushing people's buttons," said investor David Squier, whom Caruthers persuaded to kick in nearly $200,000 on a venture that went broke.
"Very intense and very controlling," said Hollywood promoter Bob Williams, who was once sure Caruthers would become a million-dollar client, only to fall short by $950,000. "You've got [suicidal cult leader] Jim Jones all over again if you gave him the opportunity."
Those people, too, have misunderstood him, Caruthers maintains.
"I have shared my views openly and naively with a lot of people," he said, "and I guess that can get you in a lot of hot water if you don't know what their opinions are going to be."
Janja Lalich, head of the Center for Research on Influence and Control in Alameda, Calif., and co-author of "Cults In Our Midst," has neither met nor heard of Caruthers, but she described a typical cult leader this way:
"They are people who are very cunning, charming; they are very quick on their feet. They're very skillful in knowing how to flatter you or turn the screws. They are persuasive. They are able to gather a little band of followers around them. It only takes one or two. And they go out and get the next batch, and the next batch. ... Often they lie and fabricate and embellish. And they seem to get away with it."
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The embellishments of Scott A. Caruthers begin with his name. He was born Arthur Brook Crothers and grew up in Anne Arundel County on rural Tick Neck Road near Pasadena, the youngest of three boys packed into one bedroom in the modest home of B&O Railroad worker John Crothers.
Mom was "Doll," because that's what his father called her, and she always had cats, as many as 20 in later years. Dad was most often the source of tension for Caruthers, known then as Art.
"I guess it was a test of wills," said older brother Joe Crothers, 56, who hasn't seen Caruthers in more than 30 years.
His other brother, John Crothers, 58, who hasn't seen Caruthers since 1966, said Art "tested very high, 138 intelligence. He was into everything. He was just a go-getter."
When Caruthers was 12, the family moved to Oak Court in Catonsville. By his high school years, his older brothers were in the Air Force, a role he would later adopt for himself, complete with a blue uniform. But in reality, his military career was short and unsuccessful.
Dropping out of school after 10th grade, Caruthers enlisted in the Army on his 17th birthday. A month after reporting for basic training at Fort Gordon, Ga., the Army discharged him. The Army won't release the reason, but Caruthers' first wife, the former Kathleen E. Wimbley, said she saw the paperwork: "He got discharged as unfit for military service."
Caruthers' explanation is more mysterious. He said the Army gave him a special battery of tests before offering him a discharge, "pending 'special circumstances' recall."
Wimbley, now Kathleen Mitulinski, began dating Caruthers the next spring, when she was 16 and he was 17. They met at the Seton High School prom, and he swept her off her feet with a patter smoother than any she'd ever heard, although sometimes it was frightening: "He said he was from another planet. [He] was very, very convincing, at least to a 16-year-old, that he had this spaceship parked on the hill in Catonsville somewhere. He picked up a glassy rock with gold on it. He said it was something left behind by the creature that was chasing him."
They were married in the summer of 1963. Eight months later they had a daughter, Fawn, who died at 4 months. To save money, the couple moved in with Caruthers' parents on Oak Court, but when his father died of a heart attack in 1966, the household went downhill fast. "The house reeked of urine, cat urine," Mitulinski said. The cats "were pretty much allowed to run free. The furniture was torn and dirty."
His mother collected her husband's fingernail clippings and kept them in a jar. "She just loved to show them off," Mitulinski said. "Art never said anything."
The couple moved to Essex, but the marriage deteriorated. Mitulinski said she looked out a window on a spring night in 1967 and saw Caruthers dressed in a tux, standing next to a limousine. It was prom season again, but his date wasn't with her.
The next spring, Caruthers took a 17-year-old named Una to her prom. Although Mitulinski wouldn't divorce him for 19 months, Caruthers, then 23, eloped with Una that summer, just after her 18th birthday. He told her his first wife was dead.
Three years later, Una found Caruthers in a parked car with another prom date, 16-year-old Billi Gardner. Billi also waited for her 18th birthday before eloping with Caruthers, then 27. Billi divorced him two years later. By that time, he'd had a son with Una; six years later she divorced him, too. By then, he was 35 and had been living for five years with Rachelle Kern, 21.
When not changing women and homes, Caruthers was changing jobs. He was a salesman, florist, milkman, truck driver and security guard, and he always seemed to live beyond his means. "Art's the type, when he has $100 he spends $150," Una Crothers said. "He was bouncing checks left and right." He was also working out a lot, lifting weights and spending spare hours at health clubs.
Each wife suspected at times that Caruthers lived in a dream world. They said he wore an Air Force uniform and talked of doing top-secret work for the government. Often he traveled to Florida, telling Una that he was going to flight school and Billi that he was quitting his job as a government assassin to become a pilot with the Blue Angels. He rigged a car with extra antennas so people would think he was an undercover cop.
"It's like anybody who puts on a show -- deep down they're very insecure. I don't know how he keeps it straight," said Una Crothers, who one night found him sunk deep in depression.
"The house was pitch black," she said. "He couldn't talk. It lasted about three days. He didn't dress. He didn't shave." She said he promised to see a psychiatrist but never went. Somewhere along the way, he began calling himself Scott.
Caruthers told Billi, now known as Billi Equi, that he "came over here from Scotland when he was a young boy, and he missed the land so he wanted everyone to call him Scott."
He had a third child, a son, with Rachelle Kern in July 1983, according to her brother.
Kenny Kern said his sister discovered in 1984 that Caruthers was involved with a 23-year-old woman named Paula. Caruthers eloped with Paula that June, and their son was born a month later. But Caruthers was often absent, saying he was going on secret missions. Instead he was living in Glen Burnie with Randi Baverman, a 24-year-old teacher. Pushing 40 and still working at low-paying jobs, Caruthers seemed stuck on the same restless track.
In reality, he had reached a turning point. He was about to meet the people who would become the nucleus of his group in Carroll County. They would launch him on a focused journey toward wealth and leadership in which millions of dollars would change hands, at least three families would break apart, and Caruthers would become known as the Commander, with a woman once known as Irmina Dzambo as his Queen.
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Irmina Dzambo and Robert Kuhn had been married three years when she introduced him in 1985 to her new friend at the Holiday Health Spa in Glen Burnie. His name was Scott Caruthers.
Kuhn and Dzambo were 25. She was born in Germany, where her father was stationed in the Army, and had moved to Maryland at age 3. He was studying at Towson State University to be a teacher; she was a nurse's aide. Their new friend Scott was something else altogether.
"He was passing himself off as being in the Air Force, even as far as to say he was an astronaut," Kuhn said. "He seemed like a decent guy, very friendly."
It wasn't long before Kuhn felt a twinge of worry. Caruthers had a pretty girlfriend, Baverman, but he seemed to be getting a little too interested in Dzambo. Sometimes he drove her home from work. Once he dropped by their place for a few laughs and sat on the patio playing footsie with her, all the more awkward because the couple lived with Kuhn's parents.
But Caruthers also elicited sympathy, such as the night he came to their doorstep in tears.
"They were doing a test mission and he had accidentally shot down one of his partners," Kuhn said. "I can still see him, sitting there at the table talking about it, dropping his head and his eyes filling up with tears, saying, 'The missiles weren't supposed to fire, but they did.' "
Kuhn's mother, Virginia, didn't buy it. Dzambo's sister scoffed, too, saying, "Astronauts don't live in Glen Burnie." But Dzambo believed it, and Kuhn's uneasiness peaked one evening at their friend's apartment when Caruthers put on some music, dimmed the lights and gazed at Dzambo. "This is getting strange," Kuhn thought. "I said, 'Let's go.' "
His wife's reply floored him:
"I'm not going. I'm not strong enough to tell you what's happening right now, but I will."
Soon after, Virginia Kuhn recalled: "She went off to exercise one morning, and she never came back. All she took with her was a pillow and a cat."
Dzambo moved into Caruthers' apartment near Glen Burnie. Kuhn got a letter two months later. "It said, 'Don't try to find me. I don't love you anymore, and I hate what all of you have done to me.' And that's the statement I'll always remember," Kuhn said, "because I had no idea what it meant."
From then on, he knew her whereabouts only by charge card receipts that trickled in before he could cancel their accounts. The bills came to nearly $10,000 for clothes and housewares -- the makings of a new life with Caruthers. Baverman was also using her credit cards then on Caruthers' behalf, according to her father, Noel, who has barely spoken with her since. Such habits landed her in U.S. Bankruptcy Court in 1986 with debts of more than $31,000.
Dzambo's family wouldn't see her again until 1998. But they heard from her soon enough. In gaining her trust, Caruthers had helped Dzambo confront the most painful ordeal of her past after she told him she had been sexually abused by her father from age 12 to 17.
Anne Arundel County police detective Wayne M. Marshall reported how Dzambo confronted her father: "During the week of 5/26/85 the victim contacted her father by telephone with a Mr. Scott Caruthers overhearing the conversation in which the defendant admitted to said abuse."
Another family member verified the allegations, and a county grand jury indicted Dzambo's father on seven counts of sexual assault. The family prepared for a wrenching trial, but without warning Dzambo dropped the charges. By then she had a new name, Dashielle Lashra.
She also had a new life story, courtesy of Caruthers, who told people that she, too, worked for the government. Caruthers began boasting of living in a threesome, acquaintances say. He, Lashra and Baverman "were joined at the hip," said E. David Gable, who sold them a car while a sales manager at Motion Dodge in Bel Air. Meeting Gable was pivotal, too. He would become a valued business partner, cutting the deal that would make Caruthers a millionaire.
As for Paula Crothers, left alone in Towson with an infant, the few visits from her husband were often unpleasant. When she laughed at him for implying that he was from another world, she said, he shoved her head into a window. Although they wouldn't divorce until 1995, she generally only heard from Caruthers through Lashra, who would telephone as an employee. "She would say Scott was on a mission, and she was depositing money into my account," Crothers said.
That, at least, was a change from earlier marriages, when the wives said they paid most of the bills. Caruthers, it seemed, was beginning to make some money.
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It was only a sketch, a crude drawing on a restaurant napkin, and it looked a bit like a snail shell. But for Scott Caruthers it was a blueprint for success. His idea was to build a dumbbell that could be raised without gripping. He said he thought of it in 1984, two years after injuring his left hand in a climbing accident, although acquaintances don't recall any such accident.
The sketch on the napkin was of a weighted, curling chamber. One could slip a hand inside and lift, not needing to grip -- a more efficient way to lift weights. He called the idea Strongput, but he needed money to make and market it. Soon, the smooth patter that had attracted all those prom dates began wooing investors.
Caruthers came to the attention of attorney Richard Gershberg in June 1985 when a client who had invested in Strongput asked him to check the paperwork. The paperwork was lousy, Gershberg told him. Word made its way back to Caruthers, who asked Gershberg in early 1986 to help.
The idea was intriguing, Gershberg said, and so was its inventor. "He was very eccentric," he said of Caruthers. "He struck me as being brilliant."
Law partner David Pearl was impressed, too: "He is probably the smartest man I've ever met in my life."
Gershberg and Pearl were 31 then, former classmates from Milford Mill High, nurturing a young law practice and even younger families. They were active in their community and synagogues, and friends knew them as devoted husbands and loving fathers. So, when Pearl began telling neighbors about a great investment opportunity, they often responded with cash.
Some were wowed by Caruthers. Prince George's County businessman David Squier poured nearly $200,000 into Strongput, which incorporated in 1987 with Caruthers as chairman, Baverman as president and Lashra as executive director. The three principals also had leading roles in DAR Products, the company set up to hold Strongput's patents.
Squier found this was no ordinary corporate hierarchy when he went to their home for Thanksgiving dinner. "He would brag that they were his and his alone," Squier said. "Dashielle worshiped him."
Squier, too, fell under Caruthers' spell: "I believed in him, in his ability to make things happen. Partly by the way he presented himself and the way he talked about his connections."
The connections supposedly included the CIA, and investors who asked about the "climbing accident" were treated to stories of a mission gone bad. Caruthers also told investors that he'd met Lashra as a young orphan in Germany when he was in the Air Force, that he took her in and raised her until she came of age and they fell in love. Sometimes he told the story with Lashra present. She would nod in affirmation.
Bob Bonnell III was a marketing man looking for a new project when he heard about Strongput in 1988. Almost from the beginning, he said, Caruthers talked of his connections to the CIA's "Black Ops division [in] the Lens Program. ... He said they had 160 operatives worldwide and that he was the Babe Ruth, the Hall of Famer, of all operatives. ... I was thinking he might be real and he might not be. But I was impressed with the product."
In 1991, the company enlisted the help of Richard E. Matz, who replaced Baverman as president. An engineer, he knew enough about business to be shocked by what he found.
Investors, some of whom wrote checks payable to Baverman, had pitched in about $1 million, Matz said. "There was no business plan. They had no list of who put the money in. ... No stock certificates," he said. "I spent a month trying to get a list of what they spent money on."
Matz said Caruthers and Pearl traveled at company expense but that he "never even saw the bills." He wrote a business plan but said Caruthers "changed all the numbers to make it bigger and better."
The public launch of Strongput came at the 1992 Super Show in Atlanta, one of the world's largest trade shows. Along the way, Caruthers made another contact for his inner circle when a Glen Burnie man, Steve Rainess, printed T-shirts for Strongput. Rainess is now a bodyguard living at Caruthers' home.
Strongput was the hit of the Super Show, attracting favorable publicity in publications including the New York Times and GQ. "CBS This Morning" co-host Harry Smith gushed, "The gyms all over the world are going to be filled with these things."
Not long afterward, Caruthers invited Bonnell and Camille Easley, who would become Bonnell's wife, to his house. After dinner, Caruthers and Lashra took them to an office, quickly shuffling some papers marked "Eyes Only" that he said were their CIA files. And then:
"He said, 'You know, Dashielle and I, we're not from this planet. In fact, we have our own language.' And as I stood there," Bonnell recalled, "they began to speak in, as best as I can describe it, something like Swahili. There were nicks and knocks, clicking noises. ... They were supposed to be hooked up to the mother ship, connected through the cats."
That was when Caruthers stated that the mother ship would rescue the world from "Earth changes" and that he, like Jesus, would come "in the clouds," Bonnell said. Caruthers then described Strongput's role in this plan, saying the product was "a commercial design for a futuristic device called the inertia-less lever, which would be used by NASA."
Bonnell and Easley left, wondering what to do next. Having put so much time and money into Strongput, they decided to stick it out.
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For lawyers Pearl and Gershberg, Caruthers seemed to inspire only loyalty. Pearl, who'd begun working for Strongput, wrote in a company newsletter in 1992 that "our fearless inventor" had "constantly challenged me to spread my wings to see a larger landscape. Like a commander on the Starship Enterprise, when faced with overwhelming circumstances, he would repeat the challenge, 'Make it so' ... He said, in so many words, 'David, you will soar to a whole new understanding of purpose.' "
Squier noticed that Pearl "started to act like Scott." Investor George Robinson detected an unnerving level of hero worship when he and Pearl visited the York Barbell Co. to pitch a manufacturing deal. Pearl "was preaching like [Caruthers] is Jesus or God or something," he said. "And I came back and said to my wife, 'You know, it sounds like this guy could be a cult leader.' "
About that time, Gershberg's sister, Debra Hackerman, went to work for Strongput as a fitness consultant. Tim Hackerman, then her husband, said she began leaving the house several nights a week to meet the boss.
Caruthers continued to make important contacts, including Jack Anderson, whom he met at a Washington speakers forum. Caruthers claims the columnist as a close friend; Anderson said recently that he doesn't know Caruthers "all that well." Anderson also said he had heard the CIA stories, so he checked his agency sources, finding "they hadn't heard of him."
Anderson's son-in-law, Peter Bruch, introduced Caruthers to Barry Marvell, a corporate matchmaker in offshore-manufacturing deals. Strongput sought a cheaper work force to lower its price, so Marvell hooked the company up with McDonnell Douglas Helicopter Co., which was looking for a product to make in South America. In August 1992, the Caruthers entourage traveled to the company's headquarters in Arizona, then toasted an agreement at a reception attended by oil sheiks and international businessmen.
Soon, Hollywood entered the mix. Bob Williams, vice president of marketing for Premiere Entertainment, placed Strongput into scenes in TV shows and movies. Tickling Caruthers most was an appearance in a "Star Trek" movie.
Caruthers made grandiose plans for $1 million worth of business with Premiere, Williams said, but paid only $50,000. Williams also heard CIA stories; he says he has a fax Caruthers sent with the logo "United States Confidential Assignment." Caruthers denies sending it.
The McDonnell Douglas deal fell through. So did other manufacturing plans. Bonnell was nearly broke, but he said Caruthers kept him working by promising riches and by warning cryptically that, if he quit, "The black van could show up at any time."
By then, Caruthers had called on an old acquaintance for help -- car dealer E. David Gable, who tried engineering a string of deals to infuse Strongput with cash by placing it in a publicly held company. One arrangement after another collapsed until May 1996, when Gable, Caruthers and others formed a new publicly traded company, Carnegie International Corp. Within a few years it would have 12,000 shareholders and be listed on the American Stock Exchange.
Strongput and most of its 224 investors were left in the cold. Carnegie picked up DAR Products, the holder of Strongput patents, but not Strongput itself. DAR's few owners -- Caruthers and Pearl among them -- got $3 million worth of Carnegie stock as part of the agreement. A handful of Strongput investors also got Carnegie stock, but most got only a plea for more money from Pearl on Nov. 24, 1997. Nineteen days later, Strongput folded.
Bonnell and Easley lost their homes in the fallout. Other investors refinanced loans and took their children out of college. Pearl, Caruthers, Lashra and Gershberg say they lost plenty, too, but the Carnegie deal eased their pain.
Caruthers became a founding director, and a financial statement to the SEC on Oct. 28, 1998, showed that he held 792,500 shares. Pearl, who became Carnegie's corporate secretary, had 645,000 shares. At $6.88, the last price per share before the SEC halted trading April 29, the worth of their total holdings was $9.89 million. Gable, Carnegie's chairman, had 1,748,000 shares, or about $12 million at the last traded price. His brother Lawrence, who had also sold cars to Caruthers, became a Carnegie vice president with 50,000 shares ($344,000).
With money no longer a worry, Caruthers was free to turn his full attention to his circle of followers, and by late 1997 their friends and relatives noticed worrisome signs of withdrawal from old loyalties and passions.
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Tomorrow: The spiral of loyalty tightens.
Originally published on Mar 5 2000
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