Cold Wind - C. J. Box [93]
“So why is he in lockup?” Joe asked.
“Ponzi scheme,” Coon said. “I’m surprised you didn’t hear about it. He’s been running a good one for the last two years right here out of Cheyenne. Kind of a high-tech pyramid scheme, where he convinced investors who wanted to shelter their money from taxes to invest in his operation. He claimed he’d figured out a way to buy hard assets like gold and real estate through a legit offshore company. That way, he told them, they could shelter their cash so the government wouldn’t get it and at the same time hedge their wealth against declines in the dollar. It was pretty sophisticated.”
Joe nodded.
“There’s a lot more of these kinds of scams these days,” Coon said. “The rich are running scared. Some of them will do just about anything not to have to pay up to fifty percent of their income in taxes. So when they hear about an outfit like Orin Smith’s, they get reckless when they should know better.”
Joe said, “So he actually paid them dividends?”
“At first,” Coon said. “It was a classic Bernie Madoff-like Ponzi scheme, but with a twist. The first few rich folks who sent him cash to shelter did receive dividend checks based on the increase in the price of gold or whatever. And they told their friends for finder’s fees that Smith kicked back. But as more and more wealthy people sent him money, the dividend checks got smaller for the first investors and nonexistent for the later ones.”
“What was the twist?” Joe asked.
Coon shook his head in a gesture that was part disgust and part admiration. “Unlike Madoff, Smith never even pretended to be aboveboard. He bragged on his website and in his emails that he operated outside the system. That way, he claimed, he and his investors were performing kind of a noble act in defense of free enterprise. He called it a ‘capital strike.’ The people who sent him money knew he wasn’t going to report to the SEC or anybody else. The endgame was that when and if the tax rates ever went back down, the investors would ask him to sell off their assets and return the cash. For Orin Smith, it worked pretty well for a while.”
“So how’d you catch him?” Joe asked. “If no one was willing to turn him in because they would be admitting they’d done something criminal.”
Coon said, “Guess.”
Joe thought for a moment, then said, “A divorce.”
“Bingo. A trophy wife in Montana and her seventy-year-old husband split the sheets. They jointly owned a high-end ski resort where all the members were multi-millionaires, and she wanted half of everything. When she found out he’d invested most of what they had with Smith’s company, she went ballistic and reported it to the Bureau in Montana. It was child’s play for us to trace the IP addresses through all the firewalls right here to Cheyenne. And it didn’t take us long to guess who was responsible, since Orin Smith has been running scams here for years.”
Joe sat back. “I don’t get it,” he said. “This is the same guy who was the head honcho of a legitimate wind energy company worth millions? And he’s been on your radar for a while.”
“So,” Coon said, “you want to meet him?”
“That’s why I’m here.”
“I’m going to sit in. If he says he doesn’t want to talk, that’s it. It’s over. And he may want his lawyer present. If that’s the