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The Mysterious Trucker and his $100 Million Scam

Jim Flaven, an East Coast truck driver, convinced a broker at Henry S. Miller that he had a $100 million trust fund and wanted to spend it all on Texas real estate. More than a year later, a simple phone call unravels Flaven’s deception and lands one of the most prestigious commercial real estate firms in federal court.
By Kurt Eichenwald |
THE CON MAN: Flaven avoided being photographed. D Magazine was only able to obtain this faxed copy of his passport photo.

The year-long fantasy that had consumed Steven Defterios’ life finally came crashing down in a five-minute phone call.

A broker with Henry S. Miller Commercial, Defterios had been struggling those many months with what he was sure would be the most lucrative deal of his career: the sale of almost $100 million worth of real estate to Jim Flaven, a man who boasted of owning an offshore trust fund worth upwards of a third of a billion dollars. Flaven’s eagerness to get the deal done—and his stories of working with his stepfather, a Boston real estate mogul—had set dollar signs dancing in the eyes of everyone involved in the proposed transaction.

Then, delays and excuses, each more improbable than the last. With other possible buyers shunted aside, several of the properties faced foreclosure as negotiations dragged on. Flaven grew increasingly elusive, refusing to return messages and ignoring demands from the seller, BNC Real Estate, to make good on his commitments. Finally, amid the emerging wreckage, Defterios decided to telephone the Boston tycoon, Stephen Karp, and ask about his stepson. The words were the worst he could have anticipated.

“I don’t know who Jim Flaven is,” Karp replied.

With that, one of the most bizarre con jobs ever to roll through Dallas unraveled. Flaven, the purported centimillionaire with the offshore trust fund, turned out instead to be a near-penniless East Coast truck driver who forged a trail of bad debts and angry victims of his many deceptions. There was no trust fund, there were no millions, there was no deal.

And in the end, there was no Jim Flaven. He vanished as suddenly as he had appeared, leaving behind a debacle that cost the seller tens of millions of dollars, wiped out the holdings of an untold number of investors, landed the Miller firm in civil court facing accusations of misrepresentation, and left everyone asking the same question: what in the world was Flaven, who seemed to gain virtually no money out of his year-long charade, up to?

“I truly don’t understand it,” says Marc Stanley, a partner with the Dallas law firm of Stanley, Mandel & Iola, which is representing the seller, BNC. “Who in their right mind occupies all of these people for this long a period of time without some sort of end game? It’s just crazy.”

Still, this strange tale from the front lines of Dallas real estate is about more than one man’s unfathomable hustle. In the aftermath of high-profile fiascoes at companies like Enron and WorldCom, attention has largely focused on the vulnerabilities of the little guy. But as the Flaven debacle shows, even the most sophisticated in business can be taken by a determined huckster armed with a steady supply of lies.

It would be hard to find anyone more sophisticated in real estate than the victims of this scheme. Henry S. Miller Commercial is Texas’ largest independent commercial real estate services firm. The once-hopeful seller, BNC, with offices in Dallas and Solana Beach, California, is regarded as a top-notch investor in apartment complexes and office buildings, with a 30-year track record and ownership of numerous properties throughout North Texas. To the roster of victims, add title companies, construction firms, appraisers, and an assortment of other local businesses. The treacherous truck driver fooled them all.

“This whole thing has been devastating,” says Barry Nussbaum, the chief executive of BNC. “Tens of millions of dollars were wiped out. Some of my investors were blown up financially. And emotionally, it was unbelievably horrifying to me.” He pauses. “To have worked all these years and be so taken advantage of—” His thought trails off, unfinished.

A search found multiple phone numbers for Jim Flaven. Messages left at each functioning number were not returned. One voicemail greeting refers callers to an emergency 800 number for something called “Orleans Global Investments,” a name similar to the Flaven entity that was supposedly going to purchase the properties from BNC. But the line for the 800 number was disconnected. A woman identifying herself as Mary Flaven, his ex-wife, declined to comment or to provide any assistance in locating her former husband.

Defterios did not return multiple phone calls. And Henry S. Miller Commercial president Sam Kartalis, who has been monitoring the situation in the aftermath, says that on the advice of the firm’s lawyer, he could not comment on the Flaven matter.

The story of the real estate deal that wasn’t has been reconstructed through interviews with participants and lawyers, court records, and internal company records and e-mails. It’s a tale that is far from over: the lawsuit from BNC Real Estate, seeking $30 million from Henry S. Miller for what it says were Defterios’ false claims, is scheduled to go to trial early this year.

THE PITCH
The first phone call came in January 2004. Steven Defterios was at his desk in Providence Towers West, the Dallas office of Henry S. Miller Commercial. On the line was Jim Flaven, a man whom the broker had met two years earlier, at a 40-acre property in Fort Worth. Back on that day, Flaven—blond-haired, 6 feet tall, casually dressed in boots and jeans—had boasted to Defterios about other Fort Worth real estate deals he had done with the federal department of Housing and Urban Development. While he lived in Connecticut, he explained, he had gained an affection for Texas properties and was ready for more. Defterios had tried to guide Flaven to some potential deals, but nothing came of the effort. 

Now he was on the phone, ready to do business. Flaven said an offshore family trust, held in Trinidad, was maturing, and he wanted to use the money to buy as much as $100 million in real estate. Under the trust’s terms, Flaven claimed, he had to invest the full sum immediately to receive the cash distribution. For Defterios, this was a career-defining proposition. The broker stood to earn as much as $1.5 million on the deal—not to mention establish himself as a player in the local real estate scene.

Little about Defterios’ background made him a likely candidate to close such a transaction. A high-school graduate from California, he got his professional start running the family burger joint. He moved on in 1994, spending three years driving 18-wheelers for Ryder Integrated Logistics, and followed that up with a job remodeling an apartment complex. In 1998, he married a native Dallasite, and the couple moved to Texas.

After a few years knocking around a carpet company, followed by a personal bankruptcy, Defterios set his sights on real estate. In 2000, he attended classes at the Champion School of Real Estate in Plano, passed his broker’s exam, and took a job with Marcus & Millichap. Over the next three years, Defterios closed about 10 deals with a total value near $20 million, and he met a number of potential clients, including Jim Flaven.

LOCATION, LOCATION: The deal was to include several complexes, including this one called Pecan Square, near Bachman Lake.
photography by Elizabeth Lavin

Defterios left the Marcus firm in 2003 by mutual agreement, following a dispute over a commission. In less than a month, he landed in the multifamily division at Henry S. Miller Commercial, a company with roots going back to 1914 and its eponym, Henry S. Miller Sr., a legend in commercial real estate. Along with the Crow family, the Millers are Dallas real estate royalty. Henry S. Miller Jr. and Henry S. Miller III, through affiliated firms, now control Highland Park Village, Preston Royal Village, the West Village, and too many other properties to name. But the commercial division that hired Defterios is now under the leadership of Vance Miller Sr., the colorful adopted grandson of the firm’s founder.

For Defterios, snagging a job at Henry S. Miller was a huge step, but in his first years, he had not accomplished much, closing only a handful of deals. Now, with the massive Flaven deal, this struggling broker seemed poised to become one of the top producers at Henry S. Miller.

He scouted properties for his new prospect, checking Loopnet, an online real estate listing forum. There, he found a group of apartment complexes near Bachman Lake that were being offered by BNC Real Estate. The properties were listed with Tom Warren, an agent in Dallas with Hendricks & Partners, and Defterios gave him a call, letting him know about his wealthy client’s interest.

Warren was impressed. “A buyer like that comes in once every 15 or 20 years,” he told Defterios. “You’re lucky.”

SUSPENDING DISBELIEF
That day, Barry Nussbaum, the head of BNC Real Estate, was working at his second-floor office in Solana Beach when he heard the news. An offer was coming in, Warren told him in a phone call, for every listed property that BNC owned in Dallas. Nussbaum was surprised. A bid that large from a single buyer? How was that possible?

Warren told the tale: Flaven’s offshore trust, his need to purchase properties quickly. Warren cautioned that he still knew little about this potential buyer, but assured Nussbaum he would quickly gather any information he could.

BNC had good reason for caution: it had investors to protect. For each property that BNC buys, it establishes a partnership. The firm retains an interest, but it sells stakes in those entities to its stable of about 100 high-net-worth investors. BNC and its investors then profit either from the revenues generated by running a property, or from its ultimate sale. That meant the Flaven offer could translate into huge profits for BNC and its investors.

Despite the uncertainty about Flaven, Nussbaum wasn’t worried. After all, the offer was coming from Henry S. Miller, a firm he knew well. A business like that, he believed, would never push such a huge deal if the buyer was a flake.

A conference call was set up between the BNC team and Defterios so that they could learn more specifics about Flaven. In that call, Nussbaum says, he heard what he labeled “The Speech” from Defterios for the first of many times. Based on the recollection of participants and contemporaneous e-mails, the speech was Defterios’ pledge that Jim Flaven was the real deal. He reminded BNC that Miller was the biggest and most prestigious commercial real estate firm in Texas, saying its decision to work with Flaven should speak volumes. He explained that he had dealt with Flaven for a long time and knew the man came from a family of extraordinary wealth. But BNC couldn’t do research on Flaven or his family. Their money was in offshore trusts that had terms requiring all information about the finances be kept confidential.

Nussbaum was satisfied. “An assurance from Henry S. Miller was like gold to me,” he says. “If these guys tell you that you can count on them, because of the reputation of the firm, you believe them. This is not some guy operating out of the back of his van.”

In the end, despite the amount of money at stake, BNC conducted no investigation to speak of into Flaven or his finances. Still, the assurances from Defterios kept coming as the deal progressed. Just weeks after the discussions had begun, Defterios sent an e-mail to Tom Warren, stating that Flaven would come through. He had checked with Flaven’s bank, Defterios wrote, and verified that “the funds are available and that we can get these deals closed.”

He ended with a personal pledge. “I would never put something on the line if I didn’t believe we could get the deal done,” he wrote. “I would never intentionally waste your time or mine.”

In truth, Defterios failed to confirm much of anything about the financial whale he seemed to have landed—and, indeed, real estate brokers are not trained to conduct such due diligence. Flaven refused to provide many details to the Miller firm, a position he would hold throughout the negotiations. Whenever Defterios pressed for information about how the money had been made, and where it was coming from, Flaven became vague, got mad, or simply refused to answer.

If Flaven’s obstinacy should have raised red flags, apparently Defterios didn’t see them. He did little else to vet his potential buyer. He conducted no financial research, and did not use Dun & Bradstreet to look up the businesses that Flaven had mentioned. While Defterios’ wife checked out Flaven online, that effort only revealed that he did indeed live in Connecticut, as he had claimed.

As the weeks and months rolled on, Defterios never telephoned Fleet Bank, which Flaven proclaimed was helping bring his millions to the United States. And although the broker did speak by phone with a woman at another purported mortgage company that Flaven said was involved in his finances, he never determined if the institution actually existed. (It doesn’t.) Defterios later acknowledged in a deposition that the woman he spoke with could well have just been Flaven’s girlfriend.

With so little information to back up the story, Defterios had unknowingly begun attesting to the credibility of an audacious fabricator, one with a lengthy history of deception.

SEARCHING FOR $96 MILLION
Among East Coast truckers, the amazing tale of the multimillionaire in their midst was a familiar one.

For years, one of their own—who worked sometimes out of a Massachusetts temp agency for truckers—had boasted of his secret family wealth, held offshore in mysterious, faraway places. Anyone listening carefully would notice discrepancies as the story was retold. Sometimes the trusts held $700 million, other times a comparatively paltry $300 million. Sometimes the family money had been earned by the trucker’s grandfather, other times by his father or stepfather. But something about the man was just hypnotically convincing. Few doubted that Jim Flaven, the driver of 18-wheelers, was in fact one of the country’s richest men.

“He lives in a fantasy world, and I think he believed his own stories,” says Michael Martin, a Massachusetts-based trucker who for years considered Flaven his best friend and believed his tales for much of that time. “A lot of other people sure did. He was convincing, just really convincing. He could talk up a room. He was good-looking. He could tell good jokes. Everybody wanted to believe him.”

While Flaven’s story didn’t always make perfect sense, he had the skill to make it sound logical, dismissing disbelieving questions with well-practiced responses. To those who wondered why such a rich man was driving a truck, he described the family difficulties that had led his parents to keep control of his money in trust, forcing him to find a blue-collar job. But, he said, if he found the right deal, if he could prove himself financially responsible, his parents would open the spigots and the vast fortune would be his.

Flaven told associates that the size of the riches and the family’s desire to stay out of the limelight required him to be cautious about divulging personal details. Other truckers knew he’d divorced but never heard much about his ex-wife or son. Even to his friends, Flaven was secretive in ways that bordered on the bizarre. For example, when a friend visited him at his Connecticut apartment, Flaven insisted they meet in the parking lot, saying that the friend would only be allowed inside the apartment blindfolded.

Despite those oddities, Flaven persuaded many of those around him—even employers—that he could make big deals. When a trucking company where he worked decided to sell its automobile transport unit, Flaven bid $100 million. A whirlwind of meetings ensued, including a trip to Detroit. Flaven returned bragging about breaking bread with the chairman of General Motors, a claim his old associates now don’t believe.

“Everybody thought that deal was going to happen, but then Jimmy just suddenly walked away,” says Dirk Johnson, a fellow trucker who has known Flaven since at least 2001. “I thought he was a good guy. But now I think he’s a con artist.”

The talks on that deal left Flaven on the hook for some expenses that he had committed to pay. A lawyer for the company sought reimbursement of a few hundred dollars. Flaven paid the debt with a money order from 7-Eleven. But he didn’t pay that himself—he had to hit up one of his fellow truckers for the cash.

Flaven even dangled the prospect of charitable gifts that never appeared, associates said. A truck driver from New York belonged to a church that sponsored missionary trips to Kenya. Flaven pledged not only to pick up the costs of the next African excursion, but also to pay off the church’s mortgage. The church organized a big “mortgage burning” party, complete with a large tent and food for all. A crowd turned up, but Flaven didn’t. He phoned the head clergyman at the last minute, informing him that problems had turned up preventing him from keeping his commitment.

Around eastern New York, Flaven entered into several negotiations to buy local businesses—including a restaurant and a health club—but never followed through. He also tried to make large purchases without using his own money. For instance, in less than a week, he ordered four all-terrain vehicles from Powerhouse Motor Sports in Mayfield, New York, dropped off a bank check, and took delivery.

Almost immediately, the bank notified Powerhouse that Flaven had passed a bad check to the institution, which he had used to obtain the good bank check. Powerhouse repossessed the vehicles, while the bank, acknowledging its error, honored the check it issued. Soon after, Flaven called Joe Sullivan, Powerhouse’s owner.

“He told me that he had heard the bank made good on its check, and he wanted to come down and pick up his ATVs,’’ Sullivan says. “I just hung up on him.’’

Flaven has ended up in court for failure to pay his debts a number of times, usually for amounts of less than $4,000. Among those he stiffed was a Connecticut accounting firm, then known as Themistos & Dane, which sued Flaven in late 2002 for failure to pay a $2,518 debt. William Seiden, a Connecticut lawyer who represented the firm, said that Flaven agreed to meet his obligation in small amounts paid over almost a year.

The antics finally raised doubts in the minds of some truckers. That uncertainty was heightened on the day a police cruiser turned up at a place they were working. As the car approached with its lights flashing, Flaven went ashen, and only seemed relieved when it became clear the police were there for someone else. The moment left some truckers wondering if Flaven had something to hide.

Before anyone could give the event much more thought, the big news buzzed around the truck stops: Flaven had finally found the deal that would help him obtain his millions, a huge real estate transaction in Texas, one that he promised would not only bring him vast profits, but would enrich some of his trucker friends, too.

Flaven began to make repeated phone calls—sometimes two or three a day—to a man he identified to his fellow truckers as Jude Giblin, supposedly his lawyer. Giblin was going to be key to the deal, Flaven said, helping guide him through the transaction’s complexities. Indeed, Jude Giblin was a name that rapidly became known to everyone in the deal as a primary advisor to Flaven. There is only one person by that name listed in computerized records for the United States; phone calls to his number went unanswered.

There is no one named Jude Giblin registered in Martindale Hubbell, the standard listing of members of the bar. However, a person identifying himself as a broker named Jude Giblin posted a solicitation on an Internet forum of get-rich-quick investments. Giblin was working on a big deal, the posting said, involving a water project in China, and he was looking for investors willing to put up money fast.

All he needed was $96 million, the posting said, almost exactly the amount of the BNC bid. The post went up January 24, 2004, the very month Flaven launched his effort. By all appearances, Flaven’s chief advisor—or someone using his name—may well have been looking to finance this massive run at real estate by trolling the Internet for suckers.

THE SCHEME SNARES MORE VICTIMS
Flaven laughed and joked as he made his way through Bayou Bend, an apartment complex near Bachman Lake in Dallas. Despite his easy demeanor and casual dress on this day in early March 2004, Flaven projected the image of an expert on the intricacies of real estate investing. He asked all the right questions, expressed all the right concerns, and haggled over all the right points.

By then, the negotiations had expanded. Now Flaven was bidding on nine properties owned by BNC, including one in Houston, for a total of just over $94.5 million. Under the terms of the letter of intent, Flaven would put up a $500,000 deposit. That would be followed by a lengthy period of inspections, appraisals, and title searches in preparation for closing, when Flaven would pay the other $94 million.

With so many properties involved, the process became unwieldy, and BNC asked if Flaven would close a few deals before the others. Flaven refused. Given the structure of his trust, he said, he couldn’t possibly purchase just a handful of properties. It had to be everything at once, or nothing at all.

Still, there was little reason for BNC to doubt Flaven’s commitment to the deals. In April, he had wired his earnest money to be held in escrow until the close of the deal. Obviously, no one would put up a $500,000 deposit if he didn’t plan to follow through.

Despite all appearances, Flaven personally put up nothing. Court records, corporate documents, and interviews show that the money came from an investment group made up of Tennessee doctors who seemed to believe they were getting in on some multimillionaire’s latest real estate killing. Once he had the doctors’ money in his hands, Flaven forwarded it to the title company, Fidelity National Title, creating an air of instant credibility.

Then, problems. Banks that had financed some of BNC’s apartment complexes wanted to know details about the purchaser, a typical request. Nussbaum from BNC wanted more information as well. But Flaven still resisted. He said he didn’t want to reveal too much about the family finances. He began grumbling about the constant requests.

“His response has been that he is putting up $500,000 in earnest money and he is about to spend about $95,000 in due diligence,” Defterios wrote in an April 12 e-mail. “He is not spending this money just to be spending money and to be wasting our time.”

The arguments lasted for months. Flaven finally caved, providing a vague biography that included references to deals he had done—all but one unnamed, making his claims largely impossible to check. When lenders pushed for more details about the mystery trust, Defterios warned everyone that too much effort at piercing the veil of secrecy could drive away this big buyer.

Meanwhile, this supposed mogul of real estate was scrambling among his trucker friends back home, spinning the story of a trust about to disburse cash, but at the very same time he had bills that needed to be paid immediately. He hit up one fellow trucker, Michael Martin, for $12,000, dangling the prospect that his friend would be able to benefit financially from his deal. Martin agreed; none of the money was ever returned.

In June, Flaven proclaimed that his wealthy family wanted to travel to Texas to visit the properties. A schedule was arranged, and staffers were put on notice to assist in the tour. But at the last minute, Flaven claimed his father had been struck ill. He disappeared, saying he needed to travel to Florida to tend to his father. The scheduled visit was off. Flaven’s “family” of real estate experts never showed up.

Contractors did. Years before, Dave Carson, owner of Gemstar Construction Company in Houston, had met Flaven during his whirlwind tour of apartment complexes near Fort Worth. Carson heard the same stories that had so enamored Defterios: Flaven’s purported history of deals through HUD, the family’s real estate empire, and, of course, the secret millions held offshore. So when Flaven called, seeking a company to refurbish the apartment complexes he was about to buy, Carson jumped at the chance. If the deal went through, he figured Gemstar stood to earn about $25 million, the largest contract in its history. Carson began showing up at the BNC properties, assessing their condition and preparing the mammoth construction job.

Carson found Flaven inordinately persuasive. So when this supposed millionaire claimed he needed cash while awaiting his trust payout, Carson, eager to solidify his relationship with such a high roller, forked over about $60,000 in loans both from his own bank account and from his company’s coffers. The money, he thought, would pay appraisers and others working on the deal. He never saw the cash again.

“It was such a stupid thing to do, it’s almost embarrassing to tell anyone,” Carson says. “He was just so freaking convincing. I have never seen such a convincing liar as him.”

In July, Flaven announced he was traveling to Houston to meet his lawyer and finalize the deal structure. Then he called Carson with a request. Since he would be in Houston anyway, could the contractor purchase a few tickets for Flaven to Major League Baseball’s All-Star Game, which was being played while he was in town? Carson shelled out thousands of dollars for prime tickets.

Flaven flew to Houston from New Jersey, accompanied by a young woman whom he identified as his niece. The negotiators on the BNC deal waited anxiously for news of the lawyer’s opinion, only to be told of a delay. The legal meeting had been cut short, Flaven informed them. He didn’t want to be late for the big game.

SUSPICIOUS MINDS
Doubts emerged, finally, in August 2004, eight months after the talks had begun. In an e-mail to Barry Nussbaum, BNC’s in-house lawyer questioned whether Flaven, whose early promises about a quick close had dwindled away amid a series of excuses, was really going to follow through on his proposed purchases. “He has been playing us since the beginning,” wrote the lawyer, Jesse Villarreal, in the August 9 e-mail.

Flaven took a new tack to buy time. He released some of the still-refundable deposit held in escrow. That cash—the amount posted as earnest money for the proposed purchase of two properties under negotiation—went straight to BNC. Not long afterward, he released the full deposit to BNC, a persuasive move. What better way could Flaven prove he was a real buyer than by putting his own cash at risk? Of course, no one but Flaven knew the $500,000 wasn’t his, but had been wheedled out of the doctors in Tennessee.

Still, some executives at BNC couldn’t shake the feeling that something was amiss. By that time, Flaven had already missed three closing dates because of an array of problems, including what he said were delays in getting trust money transferred to the United States. They knew somebody had to be running the trust. There had to be a real person somewhere overseas who could provide confirmation about its assets. Executives from BNC pushed Defterios to arrange a phone call with whoever had responsibility for managing Flaven’s finances.

Flaven turned over all the information. The secret trust, he said, was managed by Swerdna Holdings Ltd., based on the island of Trinidad, in the West Indies. Its assets were tied up in securities and other investments managed by a financier named Stephen Andrews—whose last name, backward, was Swerdna. Andrews was a secretive man, Flaven said, who knew his father and had handled the family’s finances for years.

Defterios sent a letter to Andrews describing the deal and claiming that Flaven had so far invested more than $3.5 million in the transaction, a number somebody had simply made up. He followed that with phoned requests for a conference call between Andrews, Flaven, and executives from BNC.

Just before that call was to take place, Flaven contacted Defterios. Andrews knew everything about his family’s money, he said, and that information was confidential. He insisted that no one on the conference call, including anyone from BNC, could ask Andrews about Flaven’s personal finances. In fact, he said, Andrews had been instructed not to answer such questions. Defterios accepted the restrictions and dutifully sent an e-mail to the BNC team informing them that they would not be allowed to ask about Flaven’s money—the very purpose of the call.

From the first contact, Andrews seemed slippery. His answers were vague and at times contradicted Flaven’s representations. BNC wanted a letter confirming that Flaven could financially do the deal; the firm could then use that to calm their lenders, who were beginning to rumble about possibly foreclosing on some properties. Andrews refused, saying he had to wait for confirmation from the funder. The answer perplexed everyone. Until this point, they had thought the millions were held in trust; no one understood who this “funder” was or what this person had to do with the trust.

With BNC’s anxiety growing, the Flaven team reversed course again. Andrews promised to send the commitment letter, and Flaven sweetened the deal, offering to sign a personal guarantee to pay BNC another $500,000 if the transaction failed to close. Even though Flaven was only signing a piece of paper, and putting up no new cash, the guarantee once again bought time.

As always, the promises meant nothing. Andrews didn’t send the commitment letter. By September 10, the executives at BNC were again sick of all the backpedaling. “Andrews has now lied to us how many times?” Richard Gelbart, the president of BNC, wrote in an e-mail to his fellow executives. “I am trying to stay positive, but the obvious BS by Andrews is making it real difficult. What can we do to get this guy to send this simple letter now?”

Day after day, Andrews assured everyone that the letter was coming. Day after day, Defterios sent e-mails to BNC executives, informing them that the letter would arrive the next morning, the next afternoon, by 4 o’clock that same day. Finally, Andrews committed to sending the letter, without delay. What arrived instead was an incomprehensible message.

“Upswings in the matter prevent me from following through,” Andrews wrote on September 22 to Defterios, who forwarded the note on to the sellers.

BNC’s executives went apoplectic. Gelbart, the president, responded with an obscenity laced e-mail to Defterios. “UPSWINGS blah, blah, blah,” he wrote. “What does he mean????” He demanded that somebody—Defterios, Flaven, somebody—fly to Trinidad and straighten this mess out.

Then, the next day, Flaven called Defterios to say that the American facilitator—he gave no explanation of what that meant—had promised that the full $100 million would be available September 30, a week away. But no commitment letter would be coming.

BNC was stunned. How, Gelbart demanded in an e-mail to Defterios, could the financiers working with Flaven commit orally that $100 million would be available in seven days, but refuse to make the same commitment in writing?

With that, Defterios ran out of patience—with BNC. “I am getting a little tired of these e-mails from Barry and Richard,” he wrote in a message to Tom Warren, the broker for BNC. “Let them know that I will not be harassed.”

THE BLOWUP
The money didn’t arrive in the United States in September. Or October. Or in 2004. Or in 2005. Or ever. As many as 20 times, a closing was scheduled. Sometimes Flaven insisted it had to occur in days, forcing BNC’s top executives and lawyers into all-night sessions preparing the documentation. The push was once presented as so urgent that Barry Nussbaum, the BNC chief executive, had to handle what he thought were the final details from a golfing green as he played in a charity tournament.

Invariably, Flaven or Andrews suddenly proclaimed new problems had emerged, requiring another delay. And almost every time, Steven Defterios of Henry S. Miller was there, assuring BNC that he was 100 percent certain Flaven would make good on his commitments.

Panicked, BNC tried to drum up other buyers, only to find the market had passed them by. No one would pay the amount the firm had expected, and BNC prepared to present huge losses to its investors. Then, as things looked bleak, Flaven reemerged, dangling news once again that the money from his trust was almost ready.

Flaven’s excuses for his reversals grew increasingly absurd. He told BNC and Defterios that he was flying to Trinidad to finalize the transfer with his lawyers and Andrews. When the lawyers were done, the problems with Washington began. The American government, Flaven declared, would not allow him to transfer the cash into the country until he proved where each dollar had originated.

Finally, Flaven announced that the money was arriving in his American account at Fleet Bank. He tortured Defterios and BNC with periodic updates. More than $11 million had arrived in the account, he announced. Three new wires came in after that. The total had climbed to $29,342,000. Then it jumped to $41,568,000.

After so many months, after all the incredible stories, the negotiation teams could hardly believe it: Flaven really owned his millions. Still, after being burned so many times, BNC wanted Fleet Bank to confirm the wire transfers, and told Defterios. The Miller broker passed the request on to Flaven, who responded with fury. No one could call Fleet to check anything, he insisted. If BNC didn’t like those terms, it could find another buyer. With the money seeming to arrive, BNC cut Flaven another break.

Unknown to anyone involved in the deal, behind the scenes Flaven was scrambling for small amounts of cash to stuff into the Fleet account. He approached a fellow truck driver, Dirk Johnson, asking him to wire $10,000 to Fleet for an account in the name of Orleans Properties, the name of the entity that Flaven was going to use to make the BNC purchases. Johnson agreed, so long as Flaven provided some paperwork that he could run by a third party; Flaven never called back.

After all the days of hope at BNC and Henry S. Miller, everything, as always, came crashing down. Flaven announced that the money couldn’t be used for the transaction. He owed $43 million in fees on the transfer—or 43 percent of the total—and was required to make good on that obligation first. The money again disappeared into the smoke of Flaven’s deceptions.

Obvious signs that a scam was underway passed by almost unnoticed. In early 2005, a lawyer for the Tennessee doctors who had put up the $500,000 deposit demanded their money back from the title company. Until then, no one at BNC had any idea that Flaven had brought third parties into the deal. And still the negotiations continued.

On it went, month after month, promise after promise, lie after lie. As of the summer of 2005, more than a year and a half had passed since Flaven had first proposed the deal. By then, BNC had fallen into a financial trap. Its banks readied themselves to foreclose on several properties because BNC could no longer live up to the terms of the loan. Such a move would have crippled BNC’s credit, making it prohibitively expensive to borrow money for future deals and effectively wrecking the firm’s business.

Rather than risk catastrophe, Nussbaum made the painful decision simply to give away the apartment buildings facing foreclosure. Investors in the partnerships that owned those properties were wiped out.

By the fall of 2005, almost everyone knew that the deal was dead. Dave Carson from Gemstar, the general contractor Flaven had lured in, had reached the painful realization that he had been taken. Then, one day, Stephen Andrews called from Trinidad. The trust fund was almost ready to start distributing cash, he said. There were just some regulatory hurdles that needed to be cleared and filing fees that needed to be paid. If Carson could simply send an additional $10,000—

Carson hung up the phone without comment.

The only person with hope that somehow this disaster could be averted was Steven Defterios, the real estate broker who was there from the start. Then came another e-mail from Flaven—saying goodbye. He apologized, saying that his father had cut him off, adding that he had decided to take the coward’s way out and disappear. Both he and Andrews were changing their cell phone numbers and e-mail accounts, and they would not be heard from again.

Defterios called Flaven, who was finally true to his word: there was no answer. Desperate, the broker telephoned the man he believed was Flaven’s stepfather, in hopes of finding his big client. That was when he learned that the story of Flaven’s family connections was a lie.

Reeling from the financial disaster, BNC sued Henry S. Miller in federal court, charging that Defterios’ repeated assurances that he had confirmed Flaven’s financial condition had led the firm to negotiate with a con artist. A shell-shocked Defterios, who ultimately lost his job and was forced to sell his home, was deposed on August 15 of last year. During that lengthy session, he struggled to answer questions about his confident statements to BNC throughout the entire Flaven affair.

After several hours, Marc Stanley, a lawyer for BNC, asked the critical question: did Defterios still believe there was an offshore trust fund worth $300 million?

Defterios stammered. “I—I have no idea.”

“What is your hunch?” Stanley asked.

“My hunch?” Defterios replied. “Guesstimate, probably not.”

Jim Flaven, the man who set the debacle in motion, remains elusive. An investigator working on BNC’s behalf went to Connecticut searching for him, with little success. The apartment at the address Flaven used during the negotiations seemed abandoned. The investigator, however, did find a civil summons shoved in the door. One of Flaven’s credit card companies had sued him for failing to repay $14,812 worth of cash advances and charges.

But Flaven hasn’t completely disappeared. His buddies in the East Coast trucking business talk about him all the time, recounting the latest gossip about his misadventures in Texas and spreading word each time he has been sighted nearby. To their delight, the man once thought to be Dallas’ newest real estate mogul has been seen several times recently back behind the wheel, hauling truckloads of beer.

Kurt Eichenwald, a Dallas writer, is the New York Times best-selling author of several books, including Conspiracy of Fools, about the Enron scandal.

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