Sunday, May 18, 2008

Studies in Wealth (Destruction) - Robert Vesco

Although Robert Vesco died in exile in Cuba in November 2007, his death was not widely reported until last week.

Vesco will be best remembered as the man who rode to the "rescue" of investors in Bernie Cornfeld's IOS group (also a fascinating study in fraud) by launching a successful hostile takeover in 1970. Following completion of the takeover he promptly looted the company and funds under management of US$200MM + and fled from the US. He spent the next 15 years living in various countries which did not have extradition treaties with the US before finally settling in Cuba. Along the way he managed to get involved in the Watergate scandal by contributing substantial sums (sometimes reported as US$200,000) to Nixon's campaign fund through Nixon's nephew Donald Nixon Jr. The campaign contribution was allegedly used to fund the Watergate break-in.

Vesco also dabbled in drug running (being indicted but never arrested) and peddling a miracle immunity boosting drug that could cure a wide range of ailments including cancer. In 1995 after attempting to defraud both Castro and Donald Nixon Jr, he was arrested, sentenced to 13 years in prison for fraud and illicit economic activity and spent the rest of his life in prison in Cuba.

He will not be missed.

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