Metal Men: How Marc Rich Defrauded the Country, Evaded the Law, and Became the World's Most Sought-After Corporate Criminal

172 Pages·2001·0.59 MB·English

by  A. Craig Copetas

Metal Men
Metal Men
Marc Rich and the
$10 Billion Scam
A. Craig Copetas
No part of this publication may be reproduced or transmitted in any form
or by any means, electronic, or mechanical, including photocopy,
recording, scanning or any information storage retrieval system, without
explicit permission in writing from the Author.
© Copyright 1985 by A. Craig Copetas
First e-reads publication 1999
www.e-reads.com
ISBN 0-7592-3859-6
for
B.D.
Don Erickson
&
Margaret Sagan
Acknowledgments [e-reads]
Acknowledgments
T
o those individual traders around the world who allowed me to con-
duct deals under their supervision so that I could better grasp the
trader’s life, I thank you for trusting me to handle your business
activities with discretion. Many of those traders who helped me
most have no desire to be thanked. They were usually the most helpful. So
thank you anyway. You know who you are.
Among those both inside and outside the international commodity trad-
ing profession who did help, my sincere gratitude goes to Robert Karl
Manoff, Lee Mason, James Horwitz, Grainne James, Constance Sayre, Gerry
Joe Goldstein, Christine Goldstein, David Noonan, Susan Faiola, Gary
Redmore, Ellen Hume, Terry O’Neil, Calliope, Alan Flacks, Hank Fisher,
Ernie Torriero, Gordon “Mr. Rhodium” Davidson, Steve Bronis, Jan Bronis,
Steve Shipman, Henry Rothschild, David Tendler, John Leese, Dan Baum,
Bert Rubin, Ernie Byle, Steven English and the Cobalt Cartel, Michael
Buchter, Peter Marshall, Herve Kelecom, Misha, Mark Heutlinger, Bonnie
Cutler, John and Galina Mariani, Bennie (Bollag) and his Jets, Fredy
Haemmerli, Wil Oosterhout, Christopher Dark, Eddie de Werk, Hubert
Hutton, Fred Schwartz, Ira Sloan, Frank Wolstencroft, Congressman James
Santini, John Culkin, Urs Aeby, Lynn Grebstad, Intertech Resources, the
Kaypro Corporation, Harper’s magazine, Cambridge Metals, Redco
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Acknowledgments [e-reads]
Resources, the Swire Group, ITR International, Philipp Brothers, the Heavy
Metal Kids, and . . .
Lynne Murphy, Ludwig Jesselson, Joan Sanger, Esther Newberg.
Particularly Robbie Lichtenstern—who did not live to see this book
completed.
Especially W. Douglass Lee Jr., who, by making me his lehrling,spent hun-
dreds of hours patiently teaching me how to trade.
Most of all, Jayne Gould.
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Table of Contents
New Introduction to Metal Men viii
Prologue xvii
Part One Mineral Rites 1
Part Two Rags to Riches 20
Part Three Strategic Deals and Dangerous Curves 63
Part Four There was a Crooked Man 121
Epilogue 147
New Introduction to Metal Men [e-reads]
New Introduction
to Metal Men
M
arc Rich had it all.
A commodity trader with a Midas touch, Mr. Rich from the late
1970s until the present ran a multibillion-dollar empire that
stretched from Russian nickel mines through Malaysian tin deposits
and into trading rooms in London, Hong Kong and New York. He owned a fleet
of oil tankers, counted Henry Kissinger and Placido Domingo as his friends, and
married the heiress to the Florsheim shoe fortune. He had a $9.5 million home
along Spain’s Costa Brava and maintained equally lavish residences in
Switzerland and Israel. Mr. Rich purchased Picassos and grain silos, scooped up
Hollywood studio 20th Century Fox at one point and helped bankroll
everything from the Jamaican Olympic team to the Rhodes prep school in
Manhattan. Although his personal wealth is a closely guarded secret, Mr. Rich is
routinely estimated to have a net worth in excess of $1 billion. At the same time,
his friend and colleagues joked, those who compile lists of the world’s richest
men have failed to include Mr. Rich because they have been unable to calculate
an algorithm from which to accurately gauge the true value of his wealth.
But despite his wealth and power, there was one thing Mr. Rich could not
do for the past 17 years: set foot on U.S. soil. For Mr. Rich, until Bill Clinton
granted him a presidential pardon, was the most wanted white-collar fugitive
in American history.
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New Introduction to Metal Men [e-reads]
This was a man who fled to a safe haven in Switzerland just before being
indicted in 1983 on more than 50 counts of wire fraud, racketeering, trading with
Iran despite a trade embargo and evading more than $48 million in U.S. income
taxes. Today, he is free to return to America, his past record forever cleansed of
legal stain by the pardon Mr. Clinton issued in his last day as president.
The pardon has drawn sharp criticism. Former U.S. Justice Department
officials have characterized it as “outrageous” and “disgusting.” New York
Mayor Rudolph Giuliani, who was a federal prosecutor at the time Mr. Rich
fled, said he was “shocked” by the pardon and has called for a congressional
investigation into the matter. On Capital Hill in Washington, the House
Government Reform Committee is now preparing a formal request for
documents related to the pardon — the first step in possible congressional
hearings on the matter.
Sandy Weinberg, the U.S. prosecutor who spent years investigating the
exploits of Mr. Rich’s empire, is dumbfounded. “It’s astonishing,” he says “The
act of trading with the enemy is so egregious in itself, and indicative of
the kind of attitide Rich and Green and his companies had in relation to being
good citizens of the U.S.,” Mr. Weinberg adds. What Clinton did is
incomprehensible. It demeans the whole system.”
Many aspects of the pardon remain muddy. Why, for instance, would Mr.
Clinton intercede on the behalf of Mr. Rich? But one thing seems clear:
According to a seminal Supreme Court ruling, acceptance of a pardon
generally implies a concession of guilt. Thus, Mr. Clinton has granted a
pardon to a man who is tacitly acknowledging, among other things, that — as
the 1983 indictment put it — he “traded with the enemy,” a crime classified as
“a treasonable offense.” In the past, Mr. Rich has steadfastly maintained that
his innocence.
Seventeen years is a long time. Mr. Rich, who has always declined to be
interviewed by me, has been lying low most of that time, quietly running his
trading kingdom out of a residence called “Villa Rosa” on the shores of Lake
Lucerne in Switzerland. He has stayed out of the public eye, and many people
have forgotten why he has been on the lam all this time. This is his story
The son of a poor Jewish scrap-metal trader in Antwerp, Belgium, Mr. Rich
was born as Marc Reich on Dec. 18, 1934. Hitler was in power across the
border and Germany was rearming. Shortly before the blitzkrieg rolled across
Belgium in May 1940, the Reich family emigrated to the U.S. They made
their home in Kansas City, where they opened a costume-jewelry shop and
changed the family name to Rich. The new surname became something of a
self-fulfilling prophecy.
Mr. Rich would wind up speaking five languages — German, Spanish and
Hebrew as well as English and his native French. But school records indicate
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