Swindles & Scams May 26 2010
Ex-mayor of Cancún tagged on drug charges.
Yesterday in Mexico, the former mayor of the resort city of Cancún was arrested for allegedly laundering millions of dollars of drug money through a group of secret bank accounts. Police detained Gregorio Sanchez Martinez—who is in the midst of a campaign for governor of the state of Quintana Roo—at Cancún International Airport after he had arrived on a flight from Mexico City. The Federal Attorney General’s Office has formally accused him of selling information and protection to two drug gangs—the Zetas, and the Beltran Leyva Cartel—both of which control drug distribution in Quintana Roo.
However, Sanchez says he is being victimized by blackmailers. On his website he claimed he had been threatened, and that one of the messages he received stated: “Resign from the race, or we are going to put you in jail or kill you.” At least one high-profile politician has come out in defense of Sanchez, agreeing that he was likely set up, and an article posted on the site this morning attempted to drum up citizen support, and promised that Sanchez would fight the good fight in opposing the charges and still needs votes come July, when the election is scheduled.

Sanchez’s arrest is yet another embarrassment for Mexico, however, it’s also a blow for the U.S., which pretends—publicly at least—that the American demand for drugs is not the true driver of Mexico’s cartel troubles. Often, Mexican politicians will point out this dark symbiosis, but in this instance officials south of the border have so far been circumspect. Current Quintana Roo governor Felix Gonzalez Cantu said only that, “This takes us all by surprise—it is unprecedented.”     


Swindles & Scams Feb 25 2010
Committee finds that News of the World hacked on an industrial scale.

In Britain, a growing scandal has ensnared Rupert Murdoch, head of News International, and Andy Coulson, who was editor of the News International paper News of the World before becoming communications director for Conservative Party leader David Cameron. In short, News of the World hacked into voicemail accounts and computerized police records, and also extracted confidential information from banking computers. Murdoch claims to have known nothing about it, but yesterday a committee of MPs concluded an investigation into the matter by accusing News International execs of engaging in “obfuscation” and suffering from “collective amnesia.”

While Murdoch has taken some heat for the mess, the investigation into the hacking has increasingly turned toward Andy Coulson, who, while editor of News of the World, employed four private investigators to dig up dirt on public figures. Nineteen victims of the hacking have been identified, but records show that ninety-one were targeted. To make matters worse, Scotland Yard resisted investigating the matter, has refused to comply with Freedom of Information requests concerning the investigation, and failed to notify those whose cellphone pin codes were found in possession of one of News of the World’s PIs. This means that public figures who suspect being targeted by News of the World have been forced to launch their own investigations to discover whether they were victims.

If all this seems to point toward a culture of criminality within News of the World, also consider that the paper recently paid a £792,000 settlement to a reporter who experienced harassment at the hands of Coulson, and last year paid out another large settlement to Professional Footballers Association head Gordon Taylor for illegally intercepting his phone records. Back then News International and Rupert Murdoch issued statements assuring the public that the reporter responsible for the phone tampering, Clive Goodman, was an “aberration” within the company. Now, half a year later, a bipartisan committee of MPs has described the hacking as having taken place “on an industrial scale.”

Perhaps most interesting is the fact that, while Murdoch claims to have no knowledge of these matters, his newspapers, which he touts as exemplars of balanced reporting, hid the story in their Thursday editions. While The Guardian and other papers devoted multiple pages to what is one of the biggest scandals of the year and quoted directly from the official report, Murdoch’s Sun buried 135 words on the matter between an ad and a weather map of Ireland, his Times printed a mere 230 words, and his Daily Telegraph was able to manage only 325.


Swindles & Scams Feb 21 2010
Critics claim Felipe Calderón’s government is in league with Sinaloa drug cartel.

Last week in Mexico, critics of President Felipe Calderón’s administration ratcheted up claims that Calderón is playing favorites in his high-profile war on drugs. Arrest records going back to 2003 show that the Sinaloa Cartel, which is responsible for 45% of drug trafficking in Mexico, has suffered only a handful of arrests—none involving high-ranking members. Even as a group of investigative reporters pointed out last week that this indicated possible collusion between Calderón and the Sinaloa Cartel, two more Sinaloa members were arrested, but again they were little more than errand boys—sacrificial lambs, according to skeptics.

The Sinaloa Cartel is run by Joaquin “El Chapo” Guzmán, seen at lower right in the photo. He is estimated to have amassed more than a billion dollars trafficking cocaine, heroin, and methamphetamines to the U.S. Calderón denies being in league with Guzmán, yet statistics reveal that his military-style drug war has targeted only the weakest cartels, such as Familiana Michoacana. It’s also indisputable that 15,000 lives have been lost with no measurable benefits—save for the infusion of hundreds of millions of dollars of U.S. financial support, money that comes directly from American taxpayers.
The feeling among some Mexicans is that Calderón is playing both ends against the middle—accepting American cash, while receiving kickbacks from Guzmán to leave his operation unmolested. If so, it would represent a scam of breathtaking proportions, even in the chaotic world of drug interdiction. A more charitable interpretation is that Calderón simply believes the Sinaloa Cartel is too powerful to tackle, and that an all-out assault would lead to even more violence that might destabilize the entire country. Calderón’s critics have asked for answers to these latest questions, but so far he has had no comment.


Swindles & Scams Dec 7 2009
Newsflash: it's possible Vegas casinos help customers get drunk just so they’ll lose their money.

In the U.S. last week, Terrance Watanabe, an Omaha, Nebraska retail king who made millions of dollars selling party favors, filed a lawsuit claiming that two Las Vegas casinos allowed him to gamble away most of his fortune while too drunk to make rational decisions. The arithmetic is astoun-ding. He lost in excess of $125 million, including $5 million during one twenty-four hour stretch in 2007, and his losses represented about five percent of the 2007 profits of Caesar's Palace and The Rio. Watanabe made good on over $100 million in debts, but has balked at paying the rest. In the past he would have ended up in a desert grave with Joe Pesci shoveling sand in his face, but the post-millennial Vegas is a kinder gentler place, and the two casinos instead sicced their legal pitbulls on him, which resulted in his arrest.

But the case is not as open-and-shut as it seemed at first. Witnesses have come forward and testified that Watanabe was staggering drunk most—if not all—of the time he gambled. At both Caesar’s and Rio he had a personal bartender assigned to him, and he also claims the casinos furnished painkillers—the type you’re not supposed to mix with alcohol. Even a Caesar’s security guard has come forward, allegedly telling defense lawyers that he doesn’t remember ever seeing Watanabe in a sober state. These may seem like interesting but irrelevant facts (after all, at most casinos drinks are free for gamers) but it just so happens that allowing a customer to gamble while seriously impaired is against Nevada Gaming Commission rules. And not that this is a scientific assessment by any means, but the guy looks plastered even in his court photos. Basically, he’d be totally screwed if he weren’t rich—not because of his influence, which pales in comparison to a casino's—but because the nature of betting so much money means witnesses are plentiful. Sometimes Watanabe had a crowd around him as he simultaneously played three blackjack hands at the $20,000 minimum tables. The casinos, of course, deny that anything untoward occurred and have mobilized their own army of witnesses. Right now Watanabe is free on bail, and the case goes to trial next year.


Swindles & Scams Oct 9 2009
Legendary socialite’s son convicted of fraud.

If you spend time seeking out real world pulp, as we do, you start to develop the crazy idea that money is an almighty corruptor that mutates people into heartless monsters (assuming they weren’t already that way). In the U.S. yesterday, a court case supporting that thesis came to a close when a jury convicted Anthony Marshall, son of the millionaire socialite Brooke Astor, of defrauding his late mother out of her $185 million fortune. Astor had acquired her wealth by wedding John Astor IV, whose family had originally accumulated the riches dealing in furs and opium. She became a leading light in New York City society, writing novels and hosting charitable events. She once said famously, “Money is like manure—it’s not worth a thing unless it’s spread around.” She died in 2007 at age 105, and in her last years developed Alzheimer’s disease. During that period, her son, with the help of his lawyer, tricked her into altering her will so that he was the sole executor. Anthony Marshall’s trial involved a who’s-who of upper crust NYC witnesses, including newswoman Barbara Walters and politico Henry Kissinger, who told the jury Astor couldn’t recognize guests at her one-hundredth birthday party. The jury also heard sordid stories about how once Marshall got hold of the fortune, he used it to do things like pay the captain of his yacht a $50,000 salary, while refusing to spend $2,000 to install a safety gate to prevent his mother from falling. Marshall’s lawyers countered by calling an astounding 72 witnesses, spending 17 weeks of court time on his defense, but all for naught. Marshall, who is 85, was sentenced to twenty-five years in prison, but may serve as few as one.


Politique Diabolique | Swindles & Scams May 20 2009
An Italian court accuses Silvio Berlusconi of bribery—but can’t prosecute him.

Italian leader Silvio Berlusconi must have laughed himself silly when a court in Milan declared last night that he had bribed his lawyer David Mills in order to avoid corruption charges and retain illegal corporate profits. Berlusconi was accused of paying Mills 440,000€ in cash, which the lawyer then hid in a series of offshore accounts and shell companies. The money was paid during the late 1990s, when Mills was the star prosecution witness in two trials concerning the corrupt dealings of highly placed public officials. The Milanese court claimed he lied on those occasions to shield Berlusconi, and Mills himself acknowledged this when he claimed, “[I] kept Mr. B. out of a great deal of trouble he would have been in had I said all I knew.” Mills later retracted the statement, but the court decided there was more than a kernel of truth in it.

Though Mills’ testimony explicitly fingered the billionaire prime minister, Berlusconi—pay attention now, because this is where the laughter comes in—had pushed through a law last year that gives prime ministers blanket immunity from any kind of prosecution while they are in office. There's a second loophole as well—under Italian law, statues of limitations expire quickly, which is why David Mills will spend no time in jail despite his conviction, and why Berlusconi’s alleged crimes may no longer be prosecutable by the time he exits office. Berlusconi claimed he needed immunity because the many lawsuits brought against him have distracted him from his job, but his opponents say the constant accusations should be taken as a sign of Berlusconi’s corruption and are exactly why he should resign, rather than go about writing laws antithetical to the concept of democracy. For his part, the prime minister has had little to say about the commotion, but we have a feeling he's somewhere kicking back with a cappucino, smiling rather broadly.


Mondo Bizarro | Swindles & Scams Mar 26 2009
Crook falls in Cooks Falls.

You may remember a while back we posted a story about a Los Angeles man who left his dead mum carelessly lying around for a year. Today, on the other side of the U.S., a New York man is in custody for doing exactly the opposite. 69 year-old Roland Alexander carefully stored his dead mother, Herta, in a freezer, so he could continue collecting her Social Security checks.

Eventually a bank employee where Mrs. Alexander did her checking voiced concern that she had been AWOL for more than a year, and police descended upon the Alexander home to find her frozen like a carp, and Roland long gone. New York State police finally caught up with Alexander yesterday in Cooks Falls, about 100 miles northwest of New York City, and took him into custody. Murder charges seem unlikely, because a post thaw autopsy revealed Herta Alexander had died of heart disease, but Roland still faces charges of grand larceny, unlawful disposal of human remains, and forgery.

Authorities should also consider tacking on a heavy fine for running a freezer on high, which is proven to contribute to global warming, especially when you do it for a whole year. And don’t get us started on the fact that he probably didn’t even consider Earth-friendly composting as an option. When oh when will we learn to think green, folks? If not for yourselves, do it for the children.


Swindles & Scams Mar 13 2009
Bernie Madoff is in jail but who has the missing money?

You know by now that yesterday in the U.S., crooked fund manager Bernie Madoff was handcuffed and led away to jail after pleading guilty to all counts against him. By declining to take the normal route of a plea deal with prosecutors, he sidestepped the requirement to divulge information about his accomplices and the disposition of the stolen money. Financial observers agree that Madoff could not have run his Ponzi scheme without help, and they certainly agree that the money didn’t just disappear.

The New York cover pictured here labels elderly Madoff a monster, as if he’s some atrocity never before seen by human eyes. While he may be the biggest swindler of all time, and he certainly isn't Kevin Bacon's favorite person, he’s not new. No, he’s just the latest in a long line of elegant grifters, though a particularly efficient one. What makes Madoff truly pulp is that he took the hit for his financial clan like a good mafia footsoldier, and though he’ll never get out of jail, neither will he—let’s face it—do time in Attica’s supermax wing with the child rapers and guys who ate their grandmothers’ kidneys. It’s easy to imagine Madoff is smiling inside just a little. Does that sound strange, and perhaps cynical? Yeah, it does until you think about it.

Consider for a moment how, in this post-millennial reality, we’ve become so jaded regarding the term “billions”. Not too many years ago you rarely heard that word uttered aloud by anyone other than an astronomer. So to put this Madoff thing in perspective, let’s just pretend the word doesn’t exist. Thus restrained, we now have to refer to him as a guy who stole—not one million, not fifty million—but 999 million dollars 60 times, and walked into jail without divulging where any of it went. Still think he isn’t smiling just a little? 


Vintage Pulp | Swindles & Scams Mar 12 2009
Orson Welles' crime documentary has stood the test of time—but it won’t last forever.

Orson Welles’ Vérités et mensonges, aka F for Fake is a documentary meditation on the nature of fraud, forgery and lies that slowly expands to discuss the fragility and impermanence of all human creations. Shot in France and Spain, the film follows two main subjects—Clifford Irving, who infamously wrote a fake biography of Howard Hughes, and master art forger Elmyr de Hory. At the time of filming Irving had served jail time for his crimes, but de Hory was living on Ibiza, safe from prosecution because the many museums that owned his forgeries feared the scandals sure to result if the works were exposed as false.

De Hory’s fake paintings would never have been bought by museums if art experts hadn’t declared them legitimate. The experts were unwitting accomplices to his crimes. Clifford Irving’s fate was likewise determined by experts. He admitted his Howard Hughes biography was phony after Hughes released an audiotape claiming the two had never met, but since Hughes was a recluse who hadn’t been seen for years, how did anyone know it was really him speaking? You guessed it—a panel of experts, i.e. people who had met him, listened to the tapes and agreed the voice was his. But if art experts can’t be relied upon to determine real paintings from fake, how can a bunch of self-described Hughes experts be trusted to verify a voice on a tape? What would have happened if Irving had never confessed? Would the faker have joined the ranks of the legitimate, enshrined there for eternity? And ultimately, when everything of value hangs by such a fragile thread, does any of it have true worth?

Interesting questions, and Welles doesn’t exempt his own field from examination. He discusses his War of the Worlds broadcast, along with the fakery of acting in general. He even makes Vérités et mensonges a bit of a fake by adding sequences from a movie shot by a different director, and constantly dispelling the illusion of filmmaking by showing camera men and sound techs. It’s easy to imagine that Welles, were he alive today, would have been intrigued by the current economic crisis, and the roles played by financial regulators in the U.S. who falsely labeled billions in dodgy investment packages as safe for purchase. These men were either experts without expertise, or forgers with the power to declare their forgeries genuine. Welles probably would have loved that.

Vérités et mensonges was slammed upon release but, as often happens, the art has outlasted its detractors and now most film mavens hail it as a triumph. This too fits perfectly with Welles’ thesis. The works of humans are certain to outlast their creators and critics, but in the end all must—as he says—“fall in war, or wear away into the ultimate and universal ash.” Not very upbeat. But he also tells us, “Our songs will all be silenced, but what of it? Go on singing.” That's a sentiment we can get behind. Vérités et mensonges opened in France today in 1975. 


Swindles & Scams Feb 18 2009
Trust me, I'm a banker.

Yesterday in the U.S., the Securities and Exchange Commission accused investment banker and cricket mogul Allen Stanford of operating a multi-billion dollar banking swindle. Stanford is a native of Texas, but relocated years ago to the Caribbean, where he built a cricket empire on the island of Antigua that includes an international tournament and a cricket stadium. While the SEC was busy this morning officially filing charges in federal court, depositors made runs on Stanford-owned banks in Antigua, Panama and Venezuela. Also today, the Times UK reported that Stanford had lost money to swindler extraordinaire Bernie Madoff and lied to cover it up. The flamboyant Stanford, who last year was caught on television during a match pulling one cricket player’s wife into his lap and flirting with others, has not been seen in public.


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History Rewind
The headlines that mattered yesteryear.
July 22
1992—Cocaine Baron Escapes Prison
Pablo Emilio Escobar Gaviria, imprisoned leader of the Medellin drug cartel, escapes from a posh Colombian jail known as La Catedral after he learns authorities intend to move him to a real prison. His taste of freedom doesn't last—he's killed in a shootout a year-and-a-half later.
July 21
1925—Jury Decides the Teaching of Evolution Is a Crime
In the famous Scopes Monkey Trial, American schoolteacher John Scopes is found guilty of violating the Butler Act, which forbids the teaching of evolution in schools. The sensational trial pits two great legal minds—William Jennings Bryan and Clarence Darrow—against each other. Ultimately, Scopes and Darrow are destined to lose because the case rests on whether Scopes had violated the Act, not whether evolution is fact.
1969—First Humans Reach the Moon
Neil Armstrong and Eugene 'Buzz' Aldrin, Jr. become the first humans to walk on the moon. The third member of the mission, command module Pilot Michael Collins, remains in orbit in Apollo 11.
1972—Chaos in the Big Apple
In New York City, within a span of twenty-four hours, fifty-seven murders are committed.
July 20
1944—Hitler Survives Third Assassination Attempt
Adolf Hitler escapes death after a bomb explodes at his headquarters in Rastenberg, East Prussia. A senior officer, Colonel Claus Schenk von Stauffenberg, is blamed for planting the device at a meeting between Hitler and other senior staff members. Hitler sustains minor burns and a concussion but manages to keep an appointment later in the day with Italian leader Benito Mussolini.
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