FBI Special Agent Gregory Coleman tracked his quarry, the so-called “Wolf of Wall Street,” for 10 years, ultimately sending him to a Nevada minimum-security prison for money laundering and securities fraud.
Though sentenced to four years in 2003, Jordan Belfort, who earned as much as $49 million per year, served only 22 months.
“It wasn’t enough,” the senior FBI operative told The Journal. “I took all his money, at the end of the day about $210 million.
“We liquidated his personal assets. I took his property, his residences, his Southampton beach home, his 911 Suburban. I took everything.”
The money, Coleman explains, went into a court-created restitution fund that compensated “hundreds, maybe thousands” of victims. “It went into a pool, and he himself still has to pay back $100 million.”
As of last year, however, Belfort had repaid only $11.6 million of the $110.4 million that the 2003 court ordered him to pay, a pittance when beachfront property in Southampton, Long Island, New York, among the most expensive communities in the U.S., is valued at between $2 million and $25 million.
Coleman will tell the story and answer questions at the second Cayman Alternative Investment Summit: “A New Vision for a New Age,” at The Ritz-Carlton, Grand Cayman, staged by accounting firm KPMG and Dart Enterprises on Feb. 12 and 13.
The forum will feature 85 speakers from across the world, working both solo and as panel members, and an end-of-event tennis tournament featuring Anna Kournikova, Andy Roddick, Jim Courier, Lindsay Davenport and Murphy Jensen.
Coleman will address a lunchtime audience on Feb. 13 under a vast tent on The Ritz’s “Great Lawn,” a venue that will accommodate up to 500 people to hear his story.
“They are bringing me in to talk about that very long criminal investigation,” he says, that ultimately spawned Martin Scorsese’s 2013 Oscar-nominated “Wolf of Wall Street,” a true story of vile excess during the “dotcom” bubble in the U.S.
“I’ll talk about the investigation from the inside,” says Coleman, who retired only on Feb. 1, “and some of the things the bad guy did and some of the things I did to bring him down.
“He was a very creative guy who traveled a lot offshore,” doing most of his banking in Switzerland, Coleman says.
Money laundering, of course, is a theme close to the hearts of Cayman’s financial industry and its regulators, both of whom, the agent says, still seem to suffer – unnecessarily – from Hollywood images.
“My sense is they are still reeling from John Grisham,” Coleman says, referring to the author’s 1991 legal thriller, adapted by director Sydney Pollack for the 1993 film “The Firm,” set partially in Seven Mile Beach.
“Look, we don’t care about Cayman any more than we do about Switzerland or the British Virgin Islands or the Bahamas or anywhere else,” Coleman says.
“If the trail takes us to the Channel Islands, we go there.”
Cayman is ‘domicile of choice’
In a prepared statement, event chairman Anthony Cowell, head of alternative investments at KPMG, said the conference would “help the alternatives industry anchor itself in a fast-changing investment landscape, so as to deliver extraordinary value and benefit for investors and their managers alike.”
He told The Journal that Cayman is “the domicile of choice” for the alternative investment industry, making it “a superb backdrop” to discuss its future. A Cayman Islands Monetary Authority document issued at the end of last year lists 11,000 mutual funds.
“Cayman has always been at the forefront of the industry,” Cowell said, but observed that alternative investment is “suffering from a crisis of identity. It’s at an inflection point, moving from high-net-worth individuals to institutional investors” such as real estate, hedge funds, private equity, infrastructure, structured finance, pension plans, endowments and family offices.
In fact, he said, more than 80 percent of the industry is now institutional, requiring “institutional-grade controls and processes.”
“This summit will aim to chart a course for the future of the industry, and include topics around asset-allocation strategies, fiduciary arrangements, client models and best practice, as well as speaking on the mega-trends the industry faces.”
The evolving challenge is to deliver “alpha performance,” exceeding market averages, “whilst meeting the demands of its changing investor base.
“How the industry transforms itself to adapt to change will determine its ability to succeed,” Cowell said. The issues “straddle the entire value chain of investing, from the investment-manager level, through to the fiduciary and director challenges, to regulation and administration.”
Cowell will address the gathering three times, opening the forum at 8:30 a.m. Thursday, following introductions by Cayman Islands Premier Alden McLaughlin and Dart Enterprises Vice President Christopher Duggan. He will also make remarks to start the second day at 8:20 a.m., and, finally, offer closing remarks at 5:45 p.m. that day.
His remarks, he said, will examine how “the future of the industry is constantly rewritten – with many remaining unclear about whether and how it is reinventing itself and changing its structure in the post-crisis world.
“… [T]he world has changed considerably …” Will the industry “lose some of its entrepreneurial nature or does it appeal to high-net-worth individuals, or both?” he asked.
In any case, alternative investment “requires innovation; innovation across business processes, structures, and models. It … needs to chart a new vision for success.”
The 500 delegates expected to attend will also ponder the role of philanthropy in alternative investment.
Prior to Cowell’s closing address, a six-member panel will present an hour-long discussion of “The New Age of Philanthropy.”
Chaired by Lord Michael Hastings, KPMG’s head of global corporate citizenship, and the first head of corporate social responsibility for the British Broadcasting Corporation, the panel comprises Virgin Group founder Sir Richard Branson, reprising his 2012 summit appearance when he shared the lectern with former U.S. President George W. Bush; South Sudan musician, humanitarian and activist Emmanuel Jal; founder and CEO Paul Lindley of British children’s food manufacturer Ella’s Kitchen; Executive Director David Bull of the United Nations Children’s Fund in the U.K.; and Jacqueline Novogratz, former Chase Manhattan banker, longtime antipoverty activist and, most recently, founder and CEO of Acumen, a New York-based nonprofit that uses loans and equity to solve developmental problems, particularly in Africa.
Like Novogratz, Branson – author of 15 books, most recently “The Virgin Way: Everything I Know About Leadership” and founder of at least a dozen philanthropic organizations – emphasizes entrepreneurial approaches to social and environmental issues.
In late January, he addressed his upcoming summit appearance: “It’s exciting to be returning to Cayman and to be participating in the investment summit panel on philanthropy.
“At Virgin, we believe that business can and must be used as a force for good in the world. This is also good for business. Both Dart Cayman and Virgin Produced, my entertainment company, share this philosophy and work together consistently on pro-Cayman initiatives uniting great people and entrepreneurial ideas, reinventing how we live and work to help make people’s lives better. I look forward to visiting again, participating in the summit, and seeing familiar faces.”
In 2012, the summit adopted Branson’s Virgin Unite charity – his nonprofit foundation with a mission to “connect people and entrepreneurial ideas to make change happen; to help revolutionize the way government, business and the social sector work together – business as a force for good.”
Summit organizers sought more than US$150,000 for the charity, while last May, Branson welcomed musician, speaker and writer Jal to a Virgin Unite conference on the entrepreneur’s private Necker Island, part of the British Virgin Islands, boosting the Sudanese artist’s work as spokesman for Amnesty International.
Jal recently spoke to The Journal from Toronto, saying he would “use my skills as a social entrepreneur,” seeking to “impact my country.
“I’m a recording artist and performer, and what I earn I invest back into the economy, into my country, to get people back to school,” he said.
Jal has appeared before the G-20, the UN, the U.S. Congress, a host of international charities and, in 2009, at the TED lecture series, delivering a powerful address describing his experiences, and seeking investment in education.
“There are two schools in Sudan,” Jal told The Journal, “and they can take 2,000 young people. The country is at war, but the buildings are still there and the kids can go back there.
“It’s mostly about books,” he said, describing how he channels donations through his Gua Africa charity, based in Nairobi and London.
A nearly 30-year civil war between Sudan’s Muslim north and Christian south – expanding in 2006 to the country’s western Darfur region – has killed an estimated 2 million and displaced twice that many.
Jal calls himself a “war child” – also the title of his 2008 documentary and album, the third of six recordings, and his 2009 autobiography. At age 8, he joined the fighting after seeing his mother killed, his aunt raped, his brothers and sisters “scattered,” as he says, and his father ”detached.”
He ultimately fled the fighting, walking for three months with as many as 3,000 other child soldiers, most of whom died along the way, succumbing to hunger, violence and disease.
At the age of 11, Jal was rescued by British aid worker Emma McCune, who smuggled him to Kenya. McCune died shortly afterward in a car wreck, but Jal pursued his education, finally migrating to the west.
He hopes his appearance at the summit on Feb. 13 will persuade global business to help address Africa’s political and social volatility, and the displacement and poverty they fuel: “Business leaders can do things that governments cannot.”
“Governments,” he told The Journal, “have lost power. Corporations are everywhere. Government leaders are on top, but they are not in power.”
Jobs, education, investment in small businesses, steady diets and stable homes go a long way. “When you have food in your belly, there’s no cracking, no running in the streets, no rioting. When we have food and water, we have health,” he says.
He acknowledges his vision is both enormous and ambitious, but has a sense of proportion: “No one is going to save the world. I have to try. I share my experience and do what I can. People come to [this summit] to hear about how to invest and make money. I ask to take it.
“Hey, if you make $100 million, why not give $5 million? And then you’ve done a lot. We need to give back,” Jal says.
In the U.K., Jal works closely with fellow “New Age of Philanthropy” panelist Ella’s Kitchen CEO Lindley, in their co-founded social enterprise The Key is E, raising funds for young entrepreneurs in Africa.
Lindley could not be reached for comment.
Other summit speakers describe a broad range of local and international leaders – CEOs, lawyers, authors, economists, entrepreneurs, bankers, public-sector executive and academics.
The roster includes Nouriel Roubini, 2004 founder of New York-based Roubini Global Economics; John Mauldin, chairman of New York economics publishing firm Mauldin Economics and author of six books; and Brad Katsuyama, president, CEO and 2012 co-founder of New York-based “dark pool” investment firm IEX Group.
Among repeat performers from 2012 will be Anne Richards, global CIO and chief visionary officer from Scotland-based Aberdeen Asset Management; Matt Botein, global co-head and CIO of New York-based BlackRock Alternative Investors; Max Darnell, managing partner and CIO at the Pasadena-based First Quadrant; and Mark Okada, co-founder and CIO of Dallas-based Highland Capital Management.
Director of Investment Operations James Rankin will represent Irvine, California-based Pacific Alternative Asset Management Company.
Among Cayman-based speakers will be KPMG’s Cowell and his Alternative Investments Partner Colin Nicholson; Dart Vice President and Head of Community Development Chris Duggan; Hayden Isbister, partner and head of corporate practice at Mourant Ozannes; Kobi Dorenbush, CEO of Caledonian Global Financial Services; Richard Addlestone, partner at Solomon Harris; Warren Keens, executive director for fiduciary services at Intertrust Cayman; and a DMS Offshore Management Services tandem, Managing Director Ronan Guilfoyle and Operational Due Diligence Director, New-York-based Westley Chapman, standing in for DMS founder Don Seymour.
Last week, Chapman told The Journal that “post the financial crisis of several years ago, [there] is a significant governance shift in the alternative investment space.
“The industry has become far more regulated, as all of us know. We only have to cite major international regulations as [the U.S. Foreign Account Tax Compliance Act], which has spawned domestic legislation – such as our own International Tax Compliance legislation in response to U.S. and U.K. FATCA. And there is always the next thing coming around the corner, such as the [Paris-based Organization for Economic Cooperation and Development’s] Common Reporting Standard or global FATCA,” Chapman said.
“With increased regulation and greater institutionalization of the industry, come new challenges for us as fund-governance experts and service providers. Our role is continually evolving in terms of developing systems and service lines to help clients meet their obligations under these regulations as well as to look for growth opportunities in this new era.
“So I expect that this year’s CAIS will be a very timely and useful forum as we explore these issues with some of the top minds in the alternative fund industry,” he said.
“I’m happy that DMS is participating on two of the panels, and we’re certainly looking forward to the discussion.”
Finally, Academy Award-winning actor and producer Al Pacino will deliver the summit’s keynote address, closing out day one, with – according to Dart Enterprise organizers – “a glimpse into his storied career, sharing his insights into the art of acting and some of his favorite anecdotes.”