HOW A CON MAN'S HOUSE OF CARDS CAME TUMBLING DOWN
The man they call Jack of Diamonds developed a taste for the good life and used his gift for sales to get there himself. But what he was selling, for decades, was a mirage
This is all I really know how to do.
JACK KRONIS, also known as the con man Jack of Diamonds
There are only two ways to get in or out of the office building on Toronto's busy Finch Avenue West, a door at the front and another at the side of what was once a large two-storey house halfway between Yonge and Bathurst streets. Police lined up outside both.
Officers pried open the heavy locks and roared inside shortly after 8 a.m. on March 8, 2018.
Some hustled up a flight of stairs, startling staff, many of them international students, who sat in rows of tiny desks equipped with a telephone. Taped to cubicle walls were scripts for sales calls. One was titled: “CLOSE 1—GO FOR THROAT,” a sure sign of what's called a boiler room, a high-pressure telephone sales centre.
On the ground floor, officers found much larger and nicer offices, with leather chairs behind large desks scattered with customer files and laptops. Safe crackers came to open vaults that dotted the offices, where diamonds and phoney valuation certificates were stored.
There was only one person in these executive suites, an early riser, tall and smartly dressed, who looked about 60 years old. He peeked out at the clamour and even after seeing 20 cops swarming in, he still looked the calmest guy in the joint.
Decorating his office was a colourful painting of a thoroughbred horse race, and a framed photo of Frank Sinatra with his Rat Pack pals outside the Sands hotel, an iconic Las Vegas casino from a bygone era. Sinatra's photo was mounted alongside playing cards from a Sands poker deck. The only card face-up in the frame was the Ace of Diamonds. It seems a missed opportunity for it not to be the Jack, because this was the office of a real-life Jack of Diamonds.
Detective-constable Kevin Williams, an investigator with Toronto Police Service's financial crimes unit, introduced himself and asked the man for his name. Jack Kronis, he replied.
On Jack's busy desk, between his laptop and folders of sales forms, was a sticky note. It read: “Derek James.”
Jack can be forgiven for needing a handy reminder of which fake name he was using this time, a name he needed to rhyme off when on the phone shmoozing, cajoling and lying.
He has gone by many names over the years while scamming victims in several countries.
Shortly after catching Jack inside the offices of the lavishly named Paragon International Wealth Management Inc., Williams asked him why he was still pulling cutthroat scams after all these years.
“This is all I really know how to do,” Williams said Jack replied.
I can assure you — I will practically guarantee you — that within the week you will see the stock, one week from today, I would say anywhere from 20 cents to 50 cents higher ... This thing should blow sky-high any time.
— a typical Jack Kronis sales call
Jack Kronis is a polished swindler, a silver-tongued professional con man. Once a protégé of notorious fraudsters from the golden era of boiler rooms, the now 65-year-old Toronto man has spent nearly all his adult life scheming and scamming and swindling, nursing each racket for years until it sours. Then he pounces to eat his own.
When con men peer-review colleagues they judge two things: what they take and what they give. Their take is how much money they've fleeced from suckers. Their give is how often they've been caught and punished. Jack weighs heavy on both scales, but his give is about to get much heavier.
As Jack's first Old Age Security cheques arrive in Canada, he is preparing for a U.S. prison sentence after his conviction for duping gullible investors — this time for overvalued coloured diamonds based on impossible promises.
He's not sure he's ever had an honest job, police say he admitted to investigators. Yet he has lived his life in opulence with a fondness for luxury sedans, expensive watches, tennis and fine clothes; of sunny vacations and private schools for his two children.
Before the new breed of fraudsters, sustained by computer hacks, online tricks and artificial intelligence, Canadian con men were the world's gold standard, famed as the slickest telemarketers, salesmen without conscience. They came like locusts, stripping suckers of everything they have using their mouth as their only weapon, leaving thousands broke and broken when they moved on to a new pool of rubes to feed on.
Jack isn't the worst of the bunch, nor the richest, but he does have a secret weapon that ensures he hardly suffers.
“I can assure you — I will practically guarantee you — that within the week you will see the stock, one week from today, I would say anywhere from 20 cents to 50 cents higher,” Jack enthused to a client over the phone. “You have no idea how big this thing is. This thing should blow sky-high any time.”
Jack's energy and unflagging enthusiasm was infectious. His sales call was secretly being recorded by a customer in the summer of 1989, when Jack was the young star salesman at Durham Securities Corp. Ltd.
An engineer named Robert Carducci was recording Jack's promises, not because he was suspicious, but because Carducci's wife was. The recordings were meant to ease her nerves. He wanted her to hear Jack's enthusiasm and feel Jack's confidence and believe in Jack the way he believed in Jack. Carducci, like hundreds of casual investors, put his trust in Jack. It wasn't just Jack's confessional tone and full-blooded confidence. The entire scheme was so cleverly concocted that Jack could prove to customers that what he was saying was true, until it was too late.
Jack was 29 when he started working for Durham in 1988. He had been selling securities for four years by then.
He had been recruited to Durham by its owners, a pair of old con men more than twice his age: David Foster, known as “Pud”, and Alex Pancer. Foster was the owner of a racehorse named Sunny's Halo, the Kentucky Derby winner in 1983. That made him royalty with the horsey set. Jack seemed to enjoy horse racing too, probably because people like Foster loved horse racing.
Foster and Pancer were also famous among con men of the day, according to an old con man.
“I remember them very well. The two were partners. They ran crooked stock deals. They were very good at it,” Marvin Elkind, 89, who once worked alongside many of Toronto's swindlers and gangsters, told me the week before he died in January. “Pud was a big stock promoter. He put on a good show that he was legit, but he sold phoney stock. Alex Pancer was a good phone man himself. He could sell all kinds of stuff over the phone, just put him on the line.
“If Jack learned from them, then he learned from the best.”
Investment dealers have a joke about what Jack was selling: they are stocks that are sold, not bought. By that they mean nobody comes looking to buy these shares; to sell them, salesmen must push and prod customers and usually lie and trick them.
Durham was almost exclusively selling shares in two resource exploration companies listed on the Vancouver Stock Exchange. These types of shares are speculative high-risk ventures, like buying lottery tickets. For investors who understand the risk they can be an attractive gamble in a portfolio, but when the whole scheme is crooked, like it was at Durham, outside investors stand no chance.
Durham started sucking up shares of Aatra Resources 34 minutes after they were issued. People at Durham were almost the only buyers until they owned 99 per cent of its two million shares. They did the same with Bayridge Development. When Jack started flogging the shares over the phone, he had a trick that turned reluctant customers into true believers and turned Jack and his bosses into crooks.
With Durham having cornered the market on the companies' stock, their share price on the exchange reflected only buys and not sales, which Durham did under the table so that Foster and Pancer could make the price dance whenever they wanted. Jack would tell potential clients to watch the stock price, it was about to jump — and it did, just like he said — and they believed in him and in his magic, so much so they gave him money, more money, and sometimes all their money. Investors later found that, with Jack, stocks were easy to buy but nearly impossible to sell. The only time Jack made selling easy is when he told clients to sell Aatra to buy Bayridge or sell Bayridge to buy Aatra. He made money both ways.
When Jack was on the phone, it seemed a client saying “maybe” meant yes, “no” meant maybe, and nothing ever really meant no. Not even a hang up.
Jack made $470,782 in commissions at Durham in 1988, twice the average price for a house in Toronto that year, and $444,104 the next year. Jack would likely have beat that in 1990 if regulators hadn't halted trading in the stocks in March. Jack had already made $198,902 by then.
Durham, like all boiler rooms, had a hierarchy. There were 10 “qualifiers” making cold calls from phone lists. When someone showed interest, the qualifiers passed them to an “opener,” one of 12 junior salesmen. The openers eased customers into small sales, but once a live sucker was on the line they were passed to one of two senior salesmen called “loaders,” because they slowly load a customer up with bigger sales, as much as they could until clients start yelping. Jack was the star loader at Durham. It became a $10.9-million fraud.
Scams can't go on forever. Eventually they collapse under the weight of angry customers. Durham crashed after complaints to the Ontario Securities Commission. Foster and Pancer refused to talk to commissioners, but Jack talked. He co-operated and even testified at hearings. He pinned it on his bosses.
“They ran the show,” Jack told the commission. “I didn't get involved at all in the mechanics of the stock.”
He was, he admitted, exuberant on the phone. Jack's co-operation bought him grace. While one commissioner wanted to permanently ban him from selling securities, two others agreed to give him another chance. They believed in Jack like his clients had. On the phone or on the stand, Jack was a gifted salesman.
The RCMP charged Jack and his bosses with fraud in 1993. Jack co-operated and pleaded guilty to four counts of stock fraud. Court heard from angry and damaged victims.
“He made me a deal that was too good to be true. I couldn't refuse,” said realtor Frank Desantis. To con men, those words are pure advertising. Jack had no trouble finding new work.
Durham's bosses also swooned over Jack's ability to twist arms with his tongue, court heard. Jack had a “natural ability on the phone,” his lawyer, Eddie Greenspan, told the judge. Greenspan asked for leniency because Jack was supposedly broke and had suffered from the charges; he was depressed, Greenspan said, and had split from his wife.
Jack was sentenced to six months in jail and ordered to pay restitution to 180 victims. Newspaper stories described Jack as being well dressed in a dark suit, kissing family before being led away in handcuffs. They weren't apart for long. He was released soon after to serve his sentence at home.
Greenspan had told the judge that Jack was drawn to easy money because he was desperate to maintain his family's fine lifestyle that crumbled after his parents lost their longtime business.
“He was obsessed with economic success,” Greenspan said.
That part was true.
Jack Kronis was born in Toronto on March 2, 1959, and grew up in the shadow of an abatement wall for Highway 401 in a pleasant bungalow on Mcgillivray Avenue, off Bathurst Street. From kindergarten through high school, he attended a nearby private Jewish school.
“Jackie was a ball of kindness,” an old school friend of Jack's recalled. “He was just a nice, sweet guy. He was overweight and he was a jovial, round guy. I adored him.”
When he rolled that top down and drove the girls from school to the Mcdonald's ... he was in heaven. That was the end of Jack as I knew him. Once girls and money came into focus, he appreciated what money was and what it could give him.
— an old classmate
The Kronis family lived a life torn from 1970s lifestyle magazines, with his father, Davey, smoking Du Maurier on the patio as he dropped steaks on the Hibachi. Inside, Jack's mother, Pearl, had coffee bubbling in a percolator with the large Zenith colour TV on.
It's a curious thing about Jack. He has hard-working family roots. Where Jack is a taker, his grandfather was a giver.
Naftali Kronis, known as Nathan, was born in Ukraine and emigrated to Canada in 1911. He trained as a cabinetmaker, got a job in a piano factory, and settled in the Junction before it became part of Toronto. There he helped build a local synagogue, as well as his reputation as a charitable patriarch of the Jewish community. He lived in the same humble house near the Knesseth Israel synagogue for 60 years, until the day he died in 1972 at the age of 90. Nathan and one of his brothers married two sisters, one each, from the United States. Nathan and his wife, Sima, had five sons. The youngest were twins, named Max and David. David, known as Davey, went on to marry Pearl Kornbloom, and the couple had two sons of their own. They named their youngest Jack. Jack's family's money came from his mother's side. Pearl Kornblum's clan had a small bed and mattress store on Beverley Street in downtown Toronto. Over decades, Beverley Bedding & Upholstery Co. grew into a thriving bed frame and mattress maker. It became a grand enough brand to be splashed in newspaper ads for big furniture chains. Beverley Bedding then passed to the next generation of Kornblums, including Pearl, who was named executive secretary while her brothers took the higher corporate titles. Pearl's husband, Davey, eventually became a vice-president. It made them rich.
Young Jack loved the business. He was so proud of the company and the money it brought in that he took his school class for a tour of its manufacturing plant. Whatever Jack felt when showing off his family's wealth — girls noticing him, boys sidling up to him — it seemed to reach deep inside him, grab hold of something, and never let go.
Although the Community Hebrew Academy of Toronto was a 10-minute amble from his home, as soon as Jack had his driver's licence he started driving his dad's Cadillac convertible to school.
“When he rolled that top down and drove the girls from school to the Mcdonald's on Avenue Road he was in heaven,” said an old classmate of Jack's. “That was the end of Jack as I knew him. Once girls and money came into focus, he appreciated what money was and what it could give him.”
Jack lost weight and began dressing elegantly. Still only a teenager, he shopped at high-end boutiques in Yorkville. He started playing tennis. He seemed to love the fashion of it as much as the sport. His family took regular winter vacations with Jack returning tanned, and he spent summers at lakeshore camps.
When Jack hit six-feet tall, with his hair wavy and thick and dressed in designer outfits, he looked like a million bucks. Which wasn't nearly enough.
In the 1970s, after rapid expansion, the family's bed company started failing, and in 1976, when Jack was 17, Davey Kronis and three Kornblum brothers-in-law jointly announced bankruptcy proceedings. Schoolmates who knew what the company meant to Jack consoled him in hushed tones, like there had been a death in the family.
Jack had a beautiful girlfriend from a rich family. Her parents ignited in him an interest in the stock market and Jack started talking about stocks with baffled classmates. His relationship with the girl crashed when, according to a friend of the family's, Jack was blamed for missing bottles of top-shelf liquor from the girl's house. Jack lost the dream girl but held onto dreams of stock market millions.
After high school, in 1978, Jack enrolled at York University and started taking stock market courses. He met his future first wife on campus, a woman a year behind him.
The same year that Jack graduated with a BA from York, in 1982, he started selling stock as a junior salesman, and when he joined Durham Securities a few years later, he was back enjoying the visible signs of the high life: Cuban cigars, designer clothes and a jet-black Mercedes-benz sedan with a personalized plate.
Once back on top, Jack announced his engagement to his longtime sweetheart, Monique, in newspaper ads in 1988. Always a marketer, Jack topped his ads with a headline: “AT LAST!”
Throughout the summer of 1994, Toronto property manager Terry Parnell had tried just about everything to get a tenant to pay his rent for a business suite inside the Madison Centre, 24 towering floors of dark glass and silver on Yonge Street, north of Sheppard. He had sent demands and final demands, and even stuck a lease default notice on the door.
In September, Parnell went in to change the locks.
It was a shame because the tenant had even named their business after the tower, First Madison International. While Parnell was securing the suite, he noticed investment materials for a different company and stacks of paper filled with names and phone numbers. It looked dubious to him, so he phoned police. Answering Parnell's call was Toronto Police Detective Tony Slot. Slot listened to what Parnell told him and it seemed suspicious to him as well. Together they went in for a peek. Inside, Slot saw evidence of a company called Eurocan Metals being used for fraudulent telemarketing. Slot left, applied for a search warrant, and returned to the Madison Centre with more cops who seized sales data, customer cards and telephone scripts flogging things he had never heard of, called indium and germanium.
As Slot's fraud investigation progressed, his list of suspects ran into the dozens. It wasn't long before he added the name Jack Kronis to his list. Jack had been hitting the phones hard at Eurocan since early 1990, within a few months of his last stock sales at Durham.
Jack was so far ahead of authorities that by the time he was charged for his Durham fraud in 1993, he was already three years into pulling the Eurocan scam. The mechanics of the two cons are similar but instead of flogging stocks of little value, this boiler room sold obscure industrial metals of little value.
To hear Jack on the phone, though, it sounded like indium and germanium secretly made the world go round. Jack pressed customers to buy the metals at grossly inflated prices — as if they were gold or silver — based on lies of hush-hush technological breakthroughs and a government drive to stockpile them. He made these metals seem scarce and in high demand. Even a rube knows that makes something valuable.
While the metals were worth as little as $7 an ounce, the unfortunate folks answering a call from Jack paid up to $85 an ounce. This was, of course, before customers could just Google commodity prices.
Once Jack and his pals snagged a victim, they tried everything to keep them in their grinder, always upselling and pushing them to swap their indium for germanium or their germanium for indium, for additional fees, all to boost a promised payoff that would never come.
Jack set up a company to discreetly move his money. He called it Monikron, a portmanteau of his first wife's married name: Monique Kronis. Maybe she was flattered, for a spell at least.
By the time the lease lapsed on the swindlers' Toronto office, the Eurocan scam was already winding down. At least one lawsuit, by a couple in Los Angeles County, had been filed against Jack, claiming investment fraud.
The summer before, Eurocan clients received a letter saying new managers had taken over and were finally ready to pay out investments. When clients frantically called the new team, they were transferred to a company in Nassau, Bahamas, called The Sandstone Group. Sandstone told clients their cash was ready to disburse, they just needed to pre-pay shipping, duty and legal fees.
It turned out not to be a lifeline for desperate customers but a last chance by fraudsters to mop up any remaining capital. They weren't new managers at all; Sandstone was run by Jack and a few others, including a Canadian con man named Walter Fantin.
Jack and Fantin then scampered away.
If they had cleared out their offices or kept up on the rent, they might have got away clean. As it was, Toronto police had gathered a mountain of incriminating paperwork and were talking about it with the FBI. Jack and his crew had hired a mail forwarding service with a Wall Street address in New York City to make their metals company look like a swank American firm. They also used a warehouse in Buffalo to store and send out samples of indium and germanium as part of their hustle. Add in the long list of American victims and the scam became an attractive target for the U.S. Department of Justice.
A lot of guys from Canada went over to work in Holland because they didn't have a stock market commission for a long time. They could pretty much do what they wanted there.
— Marvin Elkind
The FBI figured the Eurocan fraudsters had bilked more than $10 million from U.S. investors, and Canadian authorities happily handed over the evidence from Slot's search of Eurocan's office. The FBI quietly grabbed low hanging fruit in the fraud, including Amran Cohen, whose name was on the office lease, and Jack's pal, Irv Bielas, and Jack himself. Each proved to be a weak link in the criminal fraternity. All of them rolled over.
Cohen was the first to quietly appear in Buffalo court. He pleaded guilty to conspiracy to commit fraud in October 1996. Bielas was next. He avoided prison for the same crime by paying $100,000 in restitution. He gave the government $50,000 on the spot and $10,000 each year for the five years of his probation.
Then it was Jack's turn. Everything was arranged before he walked into the Buffalo courtroom on Sept. 30, 1997. A plea agreement was presented to the judge, and Jack immediately pleaded guilty to conspiracy to commit fraud. He was released three days later, free to return to Toronto pending his sentencing.
Nobody said a word about any of this until Jan. 13, 1998, when a large indictment was unsealed in the United States, accusing 24 other men of a fraud conspiracy.
As with Durham Securities, Jack wasn't the mastermind. He was pegged as a senior salesman. Authorities named Walter Fantin, another of Jack's mentors, as a kingpin, making Fantin the case's marquee name.
Walter Fantin had been running boiler rooms in Europe for decades, and had worked with David Winchell, a white-collar crook who made scandalous headlines in the 1980s, and Guy Lamarche, a crooked stock promoter who was shot dead in 1987 in the lobby of Toronto's Royal York Hotel during a mining convention.
Police had uncovered a network of European boiler rooms believed to be Fantin's after an Englishman was arrested in Sweden with a suitcase stuffed with US$250,000. Fantin walked into a Swiss boiler room in the summer of 1988 to find police searching it. He chatted with officers for a bit and then excused himself, saying he would be right back. He went straight to the airport.
Fantin returned to Canada to cook up the metals scam with Jack and the others and later — just as the U.S. indictment for their Eurocan fraud was unsealed — Fantin flew back to Europe. He was finally arrested in Spain in 1998 and unsuccessfully fought extradition to the United States. By the time Fantin was in custody in Buffalo, the deck was stacked against him.
The Jack of Diamonds was the government's trump card. Just as Jack had betrayed Foster and Pancer at Durham, the protégé repaid a mentor by ratting him out. With Jack prepared to testify against Fantin and others, lawyers fought to suppress evidence from snitches at their trial. After they lost, Fantin pleaded guilty in 2001 to defrauding U.S. investors and was sentenced to five years, the longest sentence in the case.
Even by then, Jack hadn't been sentenced. He kept pushing it back while living free in Toronto.
It wasn't until Aug. 11, 2003, that a secret document was handed to a federal judge in Buffalo and Jack was finally sentenced for the metals scam. Almost a decade after the property manager's tip to police, Jack was sent to prison for about 10 months, with a restitution order against him, jointly with co-conspirators, of $3,966,177.
Jack had a new alias: Inmate 09167055.
An unusual demand from a 23-yearold Dutch woman to withdraw more than half a million Dutch guilders caused a stir inside a bank in Brussels, Belgium's capital, on Dec. 5, 1994. A bank manager looked at the account's records and saw the money, worth about $400,000, had recently arrived in Canadian currency through many deposits from several countries. Rather than turn the cash over to Michèle Van Aerde, the manager apologized to her for the wait and called police.
Investigators found she had already withdrawn more than 10 million guilders from other banks in Belgium.
Van Aerde was the secretary of a company called Grimaldi Hofmann & Co., an investment firm that feigned royal pedigree by using the maternal family name of Prince Rainier III, the glamorous ruler of Monaco. When buttering up potential clients, its salesmen falsely claimed the celebrity prince was chairman of their board. What Van Aerde told investigators about Grimaldi Hofmann concerned them enough to freeze the company's accounts and alert financial regulators and police in other countries.
Belgium's federal police had uncovered a thumping international telemarketing fraud. Registered in Bahamas two years earlier with a business address in Spain, Grimaldi Hofmann's nerve centre was on Rotterdam's Weste wagenstraat, one of the oldest streets in the Netherlands' second largest city. Everything about it was designed to give fraudsters a respectable veneer while they ransacked clients by convincing them to send money for shares in a couple of dormant Canadian companies listed on the Toronto Stock Exchange.
Clients who invested with Grimaldi Hofmann were told to send their money in Canadian currency; that made it look like they really were buying shares through a Canadian stock exchange, but it was a charade because shares were rarely bought with the money. Instead, cash was transferred to accounts in other countries or withdrawn to pay Grimaldi Hofmann's salesmen, which was what Van Aerde was doing when she was pinched.
“A lot of guys from Canada went over to work in Holland because they didn't have a stock market commission for a long time,” Elkind told me. “They could pretty much do what they wanted there.”
One of those salesmen was Jack. It was a hectic time for him. His schemes and scams in three countries were overlapping. The same month in the summer of 1993 that Jack sent letters to his victims for one last kick at the Eurocan, he was charged for his Durham fraud, and before the year ended Jack had flown to Holland to join Grimaldi Hofmann for a piece of the world's hottest telemarketing swindle.
In Holland, Jack drew on all the tongue twisting he learned from his mentors at Durham and Eurocan. No longer a qualifier, or an opener, or even a loader, here he was management.
He introduced himself to unfortunate customers as Jack Lewis, Grimaldi Hofmann's vice-president of international trade.
Grimaldi Hofmann's racket was like the Durham fraud but jacked up in sophistication. It didn't target rubes who hadn't invested before. It positioned itself as upmarket and targeted investors who had some knowledge and a lot more money.
The come-on usually started with a phone call and a newsletter. The Grimaldi Hofmann Papers passed itself off as a legit investing tip sheet mailed to people who answered the phone or responded to ads in magazines and newspapers. Somehow, the swindlers got themselves a glowing plug in the Times, a major daily newspaper in Britain. “Grimaldi Hofmann is rapidly becoming recognized as one of Europe's emerging investment banks with a reputation for prudent conservative investments,” an article said in 1994. That sort of mainstream imprimatur is one of the greatest gifts for a con man. It wouldn't be the last time one of Jack's swindles got a big plug from mainstream media.
Jack was amassing a fortune in Europe, with a brief interruption. While he worked the phones, in March 1994, his father died from his family's curse: cancer. Cancer would later also claim his mother, and his brother, Kenneth.
After Van Aerde was stopped at the bank, Dutch police raided Grimaldi Hofmann's offices in Rotterdam and Amsterdam at the request of Belgian authorities. Arrests were made in the Netherlands, Belgium, Spain, Germany, and Peru. Investigators said that over two years the con men snagged $250 million from at least 1,227 victims. Jack was blamed for duping at least 160 victims. One entrusted him with $3 million.
Jack almost escaped the dragnet. He was caught at Schiphol, Netherlands' main airport. Once again, Jack conceded quickly and started blabbing. He returned to Canada pending trial on $35,000 bail with the condition he return when investigators needed him. He flew back to Belgium for about 40 hours of interviews, including a full confession.
“We found Jack has been co-operative with us in our investigation,” Marc Holsteyn, an inspector with Belgian federal police, told the Toronto Star at the time. “He played the game, knew he lost, and took responsibility.”
After Jack was convicted in the Belgium fraud case in late 2000, along with a dozen Grimaldi Hofmann workers, including Van Aerde and its mastermind, Sheridan Cox, he was given a shock seven-year sentence, but that didn't hold. While Jack was free in Canada, an appeal cut his sentence to two years, in 2003. It's uncertain if he returned to Belgium for jail.
Jack told Belgian prosecutors he couldn't pay restitution because he lost his money gambling, but authorities caught some cash moving from accounts in Luxembourg to a bank in the Turks and Caicos Islands, where $540,000 was discovered. The account was frozen while Belgian authorities tried to seize it.
Fraudsters — if they're caught — often get light sentences because their crimes are seen as nonviolent, but the damage they cause is significant. One Grimaldi Hofmann investor in Britain, Michael Mayer-diamond, told reporters, “If someone had given me a gun at that time, I would have blown my brains out.”
■ READ PART 2 OF JACK OF DIAMONDS NEXT SATURDAY.