Thursday, July 08, 2004

Three pious frauds

One of the great courtesies of the law is its lumbering pace. Folks like Kenneth Lay have plenty of time to gauge the winds, reconfigure their portfolios, cause large bits of their substance to seep through the cracks, so that by the time they're indicted, let alone convicted, they can barely afford their defense team, let alone the enormous fines their peccadilloes could trigger.

Years ago I covered the story of a builder who left dozens of homeowners high and dry when he took their cash deposits, failed to build their homes, but somehow found the funds to build his own mountaintop residence, complete with imposing moose antlers, white piano, and vast, stocked-for-the-Rapture bar and livingroom in Evergreen Colo. Clyde Hoeldke - his very name - not only built some homes and not others, but also made sure his role as a church elder and minister was prominent in all his marketing materials and that some intimation thereof somehow managed to escape his sanctimony as he welcomed arriving senior citizens, their wallets fat with cash from having sold their homes up North in order to build their Dream Homes in the Sunshine State.

Some time after Hoeldke was convicted of taking the life savings of his customers and was condemned to weari an ankle bracelet within his 10,000-square-foot house, I attempted to visit him. He waited until I'd made it past the guardhouse and up his mountain to the very door before blasting out of the eight car garage in a white SUV and tearing ass down the mountain, seemingly in violation of the provisions of his ankle braceletude.

But Hoeldke wasn't just a white blur. He was also a paper trail in the bankruptcy court, where it was clear that in the lengthy interval before his trial and leading up to his conviction, he had "gifted" his daughters and other family members with hugely valuable assets - houses and land - rendering them off-limits to any efforts by his victims to obtain restitution. Bankruptcy filings can contain tantalizingly precise details of holdings and transfers.

Seeing Ken Lay plastered all over the news today, I thought of Clyde. Of how, during the two freaking years it has taken for Lay to be indicted, I have not seen any reporter for BigMedia bother to dig into Lay's asset dispositions. Perhaps he hasn't yet filed for bankruptcy. (Enron has.) Nonetheless, it's only a matter of time before some mindless scribe "reports" that Lay is now only worth whatever he claims to be worth - a vast comedown, nearly pitiable.

Well now, that didn't take long:

Once worth some $400 million, Mr. Lay says that he lost most of his wealth in the Enron debacle. In The Times interview, he said his worth was below $20 million, and available cash not earmarked for legal fees or repayment of debt was less than $1 million. The New York Times.

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