Robert Vesco: Difference between revisions
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==="Vesco law"=== |
==="Vesco law"=== |
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In Costa Rica, Vesco donated $2.1 million to Sociedad Agricola Industrial San Cristobal, S.A., a company founded by President [[Jose Figueres]]. Figueres passed a law to guarantee that Vesco would not be [[extradition|extradited]]. Figueres' constitutional term ended in 1974. Vesco remained in Costa Rica until 1978, when President Rodrigo Carazo (1978-1982) repealed |
In Costa Rica, Vesco donated $2.1 million to Sociedad Agricola Industrial San Cristobal, S.A., a company founded by President [[Jose Figueres]]. Figueres passed a law to guarantee that Vesco would not be [[extradition|extradited]]. Figueres' constitutional term ended in 1974. Vesco remained in Costa Rica until 1978, when President Rodrigo Carazo (1978-1982) repealed what was popularly referred to as the "Vesco Law."<ref>(1979) [http://www.time.com/time/magazine/article/0,9171,917991,00.html "Learning to love exile"], ''[[Time magazine]]''. February 9, 1976. Retrieved 5/3/08.</ref> |
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In 1978 Vesco moved first to [[Nassau, Bahamas|Nassau]] and then to [[Antigua]]. While in Antigua he tried unsuccessfully to buy a nearby island called [[Barbuda]] and establish it as a sovereign state.<ref name = Noah>Noah, T. (2001).</ref> |
In 1978 Vesco moved first to [[Nassau, Bahamas|Nassau]] and then to [[Antigua]]. While in Antigua he tried unsuccessfully to buy a nearby island called [[Barbuda]] and establish it as a sovereign state.<ref name = Noah>Noah, T. (2001).</ref> |
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Revision as of 10:03, 11 November 2008
Robert L. Vesco | |
|---|---|
| Status | deceased |
| Occupation | financier |
| Spouse | Lidia Alfonsa Llauger |
| Criminal charge | fraud, conspiracy, drug smuggling |
| Penalty | 13 years |
Robert Lee Vesco (December 4 1935-November 23 2007[1]) was a fugitive United States financier. After several years of high stakes investments and seedy credit dealings, Vesco was alleged guilty of securities fraud. He immediately fled the ensuing U.S. Securities and Exchange Commission investigation by living in a number of Central American and Caribbean countries that did not have extradition laws.[2] Charges emerged following the Watergate scandal that linked Vesco with illegal funding for a company owned by Donald A. Nixon (Richard Nixon's nephew).
Vesco was notorious throughout his life, attempting to buy a Caribbean island from Antigua in order to create an autonomous country and having a national law in Costa Rica made to protect him from extradition. A 2001 Slate.com article labeled Vesco "the undisputed king of the fugitive financiers."[3] After settling in Cuba in 1982, Vesco was charged with drug smuggling in 1989. In the 1990s he became involved with Donald Nixon again, and was indicted by the Cuban government for "fraud and illicit economic activity" and "acts prejudicial to the economic plans and contracts of the state" in 1996.[4]
Vesco was sentenced to 13 years in jail by Cuba. Five months after his death in November 2007 the New York Times reported he succumbed to lung cancer at a hospital in Havana, Cuba.[1]
Biography
Robert Vesco was born in Detroit, Michigan, where he grew up and attended, and then dropped out of, Cass Technical High School. Vesco was the son of a Detroit autoworker and dropped out of engineering school in his early twenties to go to work for an investment firm. After a short period he struck out independently with an $800 stake matching buyers and sellers in the aluminum market, until he eventually acquired a portion of the profits of a floundering aluminum plant. By 1965, he was in a position to borrow enough money to acquire International Controls Corporation. Through aggressively hostile expansions and debt-financed takeovers of other businesses he grew ICC quickly. By 1968 the company owned an airline and several manufacturing plants, and Vesco held shares totaling US$50 million.[5]
IOS scandal
In 1970, Vesco began a successful takeover bid for Investors Overseas Service, Ltd., a mutual fund investment firm with holdings of $1.5 billion run by financier Bernard Cornfeld, who had run into trouble with the SEC. When his firm ran into financial difficulty, no "white knight" was willing to get involved. Vesco saw his chance and began a protracted battle to assume control of the company, opposed by Cornfeld and others. The battle quickly turned nasty; Cornfeld was thrown into jail in Switzerland and Vesco was accused of looting the company of hundreds of millions of dollars. Many prominent figures in global business, finance, and royalty were tied to the mess, receiving money from one party or the other for support. Among the accusations against Vesco were that he parked funds belonging to IOS investors in a series of dummy corporations, one of which had an Amsterdam address that was later linked to Prince Bernhard of the Netherlands, and that he broke into a Swiss bank vault to obtain shares. These allegations are unproven, as Vesco fled the country and spent the next fifteen years hopping between countries that lacked extradition treaties with the United States.[2][6][7]
In February 1973, with criminal charges against him imminent, Vesco took the corporate jet and fled to Costa Rica along with about $200 million worth of IOS's investments, according to SEC allegations. Vesco would continue to wage a legal battle from Costa Rica and the Bahamas to try to maintain control over his 26 percent of ICC stock, but, with five outstanding indictments for securities fraud against him, he could not return to the United States. It was not until 1981 that ICC had completely become free of Vesco's control, after paying out almost $12 million to him and his family.[8]
Nixon scandal
Among the charges that emerged in the years after Watergate, the SEC accused Vesco of embezzling $220 million from four different IOS funds. In 1973, Vesco fled to Costa Rica. Shortly before his departure, hoping to shut off the SEC investigation into his activities, Vesco routed substantial contributions to Richard Nixon through his nephew, Donald A. Nixon.
"Vesco law"
In Costa Rica, Vesco donated $2.1 million to Sociedad Agricola Industrial San Cristobal, S.A., a company founded by President Jose Figueres. Figueres passed a law to guarantee that Vesco would not be extradited. Figueres' constitutional term ended in 1974. Vesco remained in Costa Rica until 1978, when President Rodrigo Carazo (1978-1982) repealed what was popularly referred to as the "Vesco Law."[9]
In 1978 Vesco moved first to Nassau and then to Antigua. While in Antigua he tried unsuccessfully to buy a nearby island called Barbuda and establish it as a sovereign state.[3]
The Costa Rican government blocked his attempt to return. He lived in Nicaragua for a while, while the Sandinista Government was in power. Each of these countries accepted him, hoping that his great wealth would finance local development projects. However, this worked poorly for everybody involved, although Vesco was reputed to have stolen over $200 million, and appeared several times on the Forbes list of the wealthiest people in the world.[10]
Nixon scandal, Pt. II
In 1982 he moved to Cuba, a country that could provide him with treatment for his painful urinary tract infections, and which would not extradite him to the U.S. Cuban authorities accepted him on the condition that he would not get involved in any financial deals. He married Lidia Alfonsa Llauger.
Vesco was indicted in 1989 on drug smuggling charges.[3]
In the 1990s, Vesco became involved once again with Donald A. Nixon after Nixon went to Cuba seeking to partner with the government in conducting clinical trials on an immunity boosting drug, called trixolan or TX.[citation needed] Vesco introduced Nixon to Fidel Castro and his brother, Raul Castro, and the Cuban government agreed to provide laboratory facilities and doctors to conduct the trials. Results from the studies were positive, however on or about May 31, 1995, Vesco attempted to defraud Nixon and Raul Castro, and Cuban authorities seized control of the project and arrested Vesco and his wife. Nixon was detained for questioning and was released thirty days later.
At the time of Vesco's arrest the Cuban Foreign Ministry said he had been taken into custody "under suspicion of being a provocateur and an agent of foreign special services," or intelligence agencies. However, he was formally charged with "fraud and illicit economic activity" and "acts prejudicial to the economic plans and contracts of the state."[11] In 1996 the Cuban government sentenced Vesco to thirteen years in jail on charges stemming from the scandal. He was scheduled for release in 2009, when he would have been 74. Vesco's wife Lidia was convicted on lesser charges and got out in 2005.[3][12]
Vesco reportedly died of lung cancer in November 2007 and was buried at Colon Cemetery in Havana. However, these reports of his death have been disputed.[1]
Further reading
- Herzog, A. (2003) Vesco: From Wall Street to Castro's Cuba. ISBN 0-595-27209-6
- Eisenhauer, A.L., Moore, R. and Flood, R.J. (1976) The Flying Carpetbagger. ISBN 0-523-00985-2
References
- ^ a b c Lacey, M. and Kandell, J. (2008) "A Last Vanishing Act for Robert Vesco, Fugitive", New York Times. May 3, 2008. Retrieved 5/3/08. Cite error: The named reference "Lacey" was defined multiple times with different content (see the help page).
- ^ a b Herzog, A. (1986) "Stalking Robert Vesco", CNN. Retrieved 5/3/08. Cite error: The named reference "Herzog1986" was defined multiple times with different content (see the help page).
- ^ a b c d Noah, T. (2001) "Know Your Fugitive Financiers!", Slate.com. Retrieved 5/3/08. Cite error: The named reference "Noah" was defined multiple times with different content (see the help page).
- ^ Rohter, R. (1996) "Robert Vesco, the Fugitive Financier, Goes on Trial in Cuba on Fraud Charges", The New York Times. August 2, 1996. Retrieved 5/3/08.
- ^ Anreder, S.S. (1978) "Vesco's legacy: International Controls Corp. hopes to live it down," Barron's. April 17, 1978. p. 9, 16-18.
- ^ Herzog, A. (1987) Vesco, His Rise, Fall and Flight. Retrieved 5/3/08.
- ^ (1981) "Life after Vesco," Barron's. September 7, 1981. p. 34-35.
- ^ Burgess, W.H. (1982) "The remarkable recovery of the company Vesco left behind," Management Review. May 1982. p. 31-32.
- ^ (1979) "Learning to love exile", Time magazine. February 9, 1976. Retrieved 5/3/08.
- ^ Rosen, J. (2008) "Rogue on the Run", Conde Nast Portfolio magazine. February 2008. Retrieved 5/3/08.
- ^ Rohter, R. (1996) "Robert Vesco, the Fugitive Financier, Goes on Trial in Cuba on Fraud Charges", The New York Times. August 2, 1996. Retrieved 5/3/08.
- ^ Arostegui, M. (1996) "Return of the godfather - Robert Vesco's arrest in Cuba", National Review. July 31, 1995. Retrieved 5/3/08.