Pirate Cove: Chapter 19
Beau Dietl & Associates
I left the Boston FBI office and drove straight to New London, CT to catch the ferry over to Long Island. I was pretty steamed the whole drive.
But after a half hour or so I realized I wasn’t steamed with the FBI. I understand the issue of jurisdiction. If they don’t have jurisdiction then they can’t act. That’s pretty simple. I was actually kicking myself for not thinking about that ahead of time. I was mad for not knowing.
I find being uncertain exhausting. I hate it. It can produce weapons grade anxiety. Although I am slowly becoming more used to uncertainty, I still hate it. But the best way for me to combat this is to accept the reality of the situation. Then I need to define a logical path forward.
So my thought process immediately goes to; how do I move this ball forward? What don’t I know that can trip me up? If I don’t see a clear path out of this mess — and it is a mess — what do I need to learn to help me find that clear path out?
To do that, I needed to know a few things.
First, who actually owned the vineyard? Southport claimed it owned 93% of the voting stock. But since August of last year — 9 months earlier — the insurance company that provided the funds to buy it…. was under the control of the Delaware Insurance Commissioner.
Southport itself had put up no money. Yet it claimed “undisputed ownership” of $6 million in assets.
We tried to contact the representatives for the Insurance Commissioner. Our lawyer called them. Sent them e-mails. He even sent letters via snail mail. But they never responded. Not once.
So, who owned this company?
Second, I needed to know if law enforcement was investigating this case. The FBI office in Boston now knew. But they were struggling with how to get jurisdiction. So I assumed the FBI was not on Southport’s trail.
I also found it difficult to believe that I was the first one to contact law enforcement. The initial draft of the Duff & Phelps report had been circulating for over a year. That thing was pretty definitive. You don’t need to be a criminal defense lawyer or prosecutor to read that and not think… something’s not right here.
The Wall Street Journal had also published a follow up article to the original. The second article examined Southport’s claim to a painting by Caravaggio, the Baroque era Italian artist. It seems Southport had put a down payment of $1.5 million in cash (remember S.I.D.?) to its owner. They also agreed to pay $38.5 million at a later date.
Then, in a fit of — brazenness or stupidity or both — they put it on the books of Freestone Insurance for…. wait for it…. $128,000,000.
Now not only did the Wall Street Journal question the paintings value. It also questioned its authenticity! So, how could law enforcement not be investigating?
So as I sat on the ferry making its way across Long Island Sound, I reduced the problem down to four questions;
- How could I find out who owned the vineyard?
- How do I find out if law enforcement is investigating?
- If there is an investigation, who are they?
- How do I get in touch with them?
This was not my first brush with fraud and investigation during my time at the vineyard. One day an investigator for a large import/export company showed up at Premium Wine Group. It was early in my tenure at the vineyard when I got the heads-up call from Russell, the winemaker.
The investigator was asking when Premium was going to pay the amount owed to the importer. Russell informed him that we didn’t owe any money to the importer. Not only that, but he had never even done business with them.
The next day, I sat down with Russell and reviewed the documents the investigator had left behind.
It seems a small wine company had imported several thousand gallons of wine from France to New York. Once it arrived in New York he shipped it to Russell at Premium Wine Group. There Russell’s crew had — as contracted — put the wine into kegs. Once done, the small company picked it up and paid their bill.
The problem? The little company had somehow gotten Premium Wine Groups import license number. Why? Because the little company did not have an import license. Without one, you can’t even get the wine onto the boat in France. Never mind bringing it into the United States.
To complicate matters, the guy didn’t even have a license to sell liquor in New York. What’s more, he never paid the French vineyard where he bought the wine. Then, the guy sold his wine all over Long Island at a below market price and stiffed his vendors.
As a result, the vineyard in France and the shipper were looking to Premium Wine Group for their money.
The ripple effect for Premium Wine Group here was huge. If the New York State Liquor Authority — a notoriously difficult regulatory agency — believed Premium was complicit… that could mean a loss or suspension of their license.
Premium Wine Group made the wine for 17 or 18 brands on Long Island in 2014. The demand for Rose’ wine was hitting stratospheric levels. It was pretty normal for vineyards and restaurants to run dry of local Rose’ in August. The demand was that frenzied.
So, if Premium had to suspend operations, it would take some big-name producers with it. Not to mention Lieb Cellars and PBEV.
One day in the early 2000’s, Jeff Leach asked me if I could meet him for lunch somewhere in lower mid-town. He wanted to introduce me to a friend of his. That friend was Joe Coffey Jr.
That lunch turned into a whole afternoon and one of the funniest afternoons I have ever had. Joe is a lawyer and investor. He played football in high school and college. He was Irish Catholic. And his father was an NYPD detective. A very famous NYPD detective. Think Son of Sam and John Gotti.
We hit it off beautifully. To this day, Joe is still a no-nonsense, no BS, no excuses friend. Its awfully tough not to like him.
As I was dealing with my little French wine importer problem, I knew I needed advice. So I called him.
I needed to learn all I could about this sneaky little Frenchman. In my mind I was prepping for lawsuits, regulatory hearings and lots of scrutiny. All this involving Premium Wine Group — a company I was still learning about.
I called Joe. He listened. The he asked a few questions in a very lawyer-like way and said… “send an e-mail to Bo Dietl. Use my name. Tell him you’re my friend.”
Not five minutes after I sent the e-mail to Bo my phone rang. “I’m looking for Richard Bailey. This is Bo Dietl. Any friend of Joe Coffey’s is a friend of mine. How can we help you.”
Bo Dietl — among lots of other things — is also a famous former NYPD detective. When he left the NYPD he started Beau Dietl and Associates, a private detective agency. Bo told me once that Joe Coffey’s dad was one of his first bosses on the force.
Bo’s office is at One Penn Plaza, high above Madison Square Garden. As I was sitting in their conference room enjoying the killer view Mike Ciravolo walked in. Bo is the Chairman and CEO. Mike’s the President of the firm.
Now, Mike is one of those guys who exudes a quiet, tough, ‘I’ve seen it all’ confidence. When you find out he’s a former NYPD cop — you have not one whit of surprise.
After explaining the situation, Mike outlines a plan. He’s going to send a guy — a former detective from mid-town north — out to see me and we’ll figure it out.
The next day I get a knock on the door of the Lieb Estate house which is now my office. Now THIS guy looks like a TV detective. Even down to the trench coat. We sit down, talk it out and he says, “Ok. Let me see what I can do.”
Suffice it to say he solved the problem. Quickly. He prepared a report which we handed to the investigator for the import company who thanked us. We never heard from him again.
But one final note on that. Bo and Mike’s investigator showed up at the French guy’s house. Ironically, it was only a few miles from the vineyard. He knocked on the door and asked his wife if he could speak with him. She replied he wasn’t home. Our guy left his card. He said he wanted to talk to him.
We learned later that he suddenly went back to France.
So…. the only way I can think of to get the info on Southport and if law enforcement is focusing on this…. is to call Mike Ciravolo at Beau Dietl & Associates.
Talking to Mike Ciravolo on the phone is always like talking to someone you’ve known all your life. Like talking to your closest friend. Or your big brother. He asks about my wife, my kids, how I am doing etc.. He is amazingly adept at putting you at ease.
But then he gets down to business. And when that happens, he is all business.
By now, I have the executive summary of this problem well-rehearsed. So, I give it to Mike. He asks a few questions and then says, “When can you come in and meet with us. I’ll talk to Bo. We’ll assemble a team to help you.”
A Team. Not really what I wanted to hear. See, I am still kind of hoping I could hand this off to someone who would take it to law enforcement.
I want somebody else to do the dirty work.
Bo and Mikes team dug hard and produced a report within short order.
It’s first paragraph read, “In the course of trying to confirm the majority shareholders in a company managed by a client, we identified a blatant and obvious plundering of the assets of several insurance companies…” “it cries out for a criminal investigation.”
They also produced the best outline of all the Southport companies I had ever seen.
The ownership of the vineyard was definitely uncertain (there’s that word again.) So if need be, I could tie that question up in court for years. Nice. I was happy to get that confirmation.
Finally, when it came down to the subject of whether law enforcement was involved… they couldn’t get any confirmation whatsoever. It was mystifying.
Bo, Mike and their guys have lines of communication into all sorts of law enforcement agencies. Not just New York City but state and federal too. If they can’t find out. I sure as well won’t be able to either.
In fact, one of their guys called a contact at the US Attorney for the Southern District of Manhattan (SDNY) to try and refer it in. To his and everyone else’s astonishment, they were waved off.
Sitting with Bo, Mike and another one of their guys in Mikes office they concluded…. if the investigation is not being run out of the SDNY or local FBI, then the only thing that makes sense is that it is being run out of Washington. Out of main Justice.
If so, I asked, “how do we get in touch with whoever is in charge of this thing.”
“Let us think about it,” they said. “We’ll find a way.”
Boy did they ever.
Next: Enter Michael Weinstein