You Can't Cheat an Honest Man - James Walsh [62]
Taylor’s deals had always worked before, so the high roller agreed. He wired the money the next day. A week later, Taylor said it was going to take a couple of extra days to liquidate the bonds.
Two weeks later, the high roller told Taylor he wanted to cash out his account. Taylor agreed, promising to hand over the money within five days. On the fifth day, Taylor showed up at the high roller’s office and gave him a stack of 18 cashier’s checks totaling $2.5 million. It was a 25 percent return in less than a month.
The high roller noticed that many of the checks bore the names of third-party remitters—other Taylor investors. This seemed suspicious. But the bank had no problems with the checks.
A few days later, Taylor stopped in at the Rose Mortuary in suburban Knoxville and made burial plans for himself and his wife. He picked his casket and named his pall bearers—all investors. As soon as he was finished, he drove his black 1995 Mercedes into the mortuary’s rear lot, parked the car and shot himself in the head.
At his funeral, Taylor was carried by people whose money he’d stolen. A rumor circulated around Knoxville that, right before he killed himself, Taylor had called his wife and asked her to join him at the mortuary. But investigators who checked Taylor’s phone records said this didn’t actually happen.
In the last three months of his life, Taylor had made 174 deposits totaling more than $52.3 million into his limited partnership account; in the same period, he made 322 withdrawals totaling $53.2 million. Once again, frenzied banking marked the end of a Ponzi scheme. “It’s on the same scale as some of the largest [Ponzi schemes] in the country,” said Assistant U.S. Bankruptcy Trustee William Sonnenberg.
Taylor’s investors moved quickly when word of his suicide got out. Within three days, several restraining orders had been issued freezing assets and records related to Taylor & Associates, Joseph C. Taylor L.P. and Taylor’s estate.
Within two weeks, retired FBI Agent William Hendon had been appointed trustee for most of Taylor’s operations.
Hendon didn’t find much at first: $36,814.52 from the limited partnership’s NationsBank account and $25,000 from the settlement of a lawsuit. He said that he expected to exercise his right under federal bankruptcy law to force those who’d received money within 90 days of the bankruptcy filing to give it back.
This proved easier than Hendon expected. In an unusual move, some clients who received money from Taylor before he died volunteered to pay it back. Knoxville was still a small town, in many ways, and trust was important. They didn’t want to be linked to dirty money.
CHAPTER 10
Chapter 10: Greed
Ponzi perps are moved by greed. In most cases, they’d rather steal money quickly than earn it gradually. (It’s the exceptional perp who has the discipline to move slowly; typically, they are more crude) But they also count on the greed of their investors to make the schemes work.
No exploration of pyramid and Ponzi schemes would be complete without a consideration of what greed means in this context—and how it works.
The greed that leads an investor to make a foolish investment in a Ponzi scheme may not be an obvious thing. In an age when 25-yearold computer software designers can become millionaires overnight and even conservative investments like stock mutual funds have given investors returns of 30 percent or more in a year, many people lose perspective on how hard it is to make money.
“You hear about Bill Gates being worth $40 billion. You hear about Netscape or Yahoo! going public and making receptionists millionaires. You hear about the guy who started Dell Computer being a billionaire—and he’s not 30,” says a California prosecutor. “And you believe there’s got to be some quick money for you out there somewhere. It may be subconscious, but you believe it. And this affects your decisions.”
When lots of money