A tactical retreat to Miami had always been a possibility and when Sid Judge’s UK investment firm, Home Counties Properties, went belly-up, his sudden appearance in the Sunshine State did not surprise those who knew him well. Sid had always been way ahead of the market when it came to scams and after promising annual returns on property of as much as fifteen percent it was not wise to hang around to explain the vagaries of risky investments to dumb investors.
Small punters willing to invest ten thousand pounds or more had been assured that the flats and houses acquired in and around London would be modernised, maintained and very profitably let to selected tenants. The firm’s luxuriously renovated and furnished show homes, glossy brochures and London headquarters in Victory Street, had been more than enough to convince investors of the quality of the investments proposed. Management of the properties had been sublet to third parties paid large fees to ensure their complicity.
Sid Judge hopped on the first flight to Miami when he got word he was wanted for questioning by the Serious Fraud Office, accused of deceitfully using investors’ money. His highly geared buy-to-let investment firm was bleeding cash as hundreds of the properties bought by his company were exposed by the press as being abandoned and unoccupied, with building and maintenance contractors unpaid.
Things had got serious when the Irish Netherlands Bank, which had financed him in the good times, leaned on him, demanding him to increase his firm’s equity to compensate for falling property prices. The need to find additional millions came as a shock to Sid with his investors already rattled by the approaching crisis. It was all in the small print and Sid had only to read the agreements with the bank to know that the bank could ask for additional funds if the firm’s assets shrunk in relation to the value of its loans.
Sid’s system was not unlike a boiler room scam where small middle aged punters, amongst the most naïf and poorly informed, were the targets when they sought higher returns on their savings. They were conned into investing in a company that was on the surface genuine, cloning the names of well known property companies to dupe incredulous investors. Investor’s money was deposited into bona fide British bank accounts, part of which was used to pursue a semblance of business and the rest siphoned off via different accounts to an offshore bank in Dominica.
Sid’s arrival in Miami coincided with a steep fall in property prices that was beginning to make prime real-estate in Florida look attractive to cash-rich investors. The glut of new properties on the market was forcing desperate developers to offer discounts of up to fifty per cent.
He was not a newcomer to Florida, or to its property market. Sid’s first foray into Miami real-estate had taken place at the turn of the millennium when he discovered the quick gains that could be made from flipping. At that time anybody could with a minimum deposit sign up for a mortgage as prices rose month in month out. He lived extravagantly off the boom flashing his money around and getting a reputation as a high roller. His luck ran out when he got in with a bunch of unsavoury friends and found himself on the wrong side of couple of ugly mobsters. After word got out they were after his skin he had little choice but to make a hurried exit to London. There, with the experience he had gained from his sub-prime adventure in the US, he set up Home Counties Properties and surfed the UK boom.
As in all Ponzi schemes, Sid’s UK enterprise got off to a good start, but then, as in the case so many legitimate businesses, he found himself embroiled in the sub-prime crisis. To top his financial worries the Serious Fraud Squad’s sudden interest in his business was bad news. It was time to move on. News that the troublesome Miami thugs were behind bars removed most of his qualms about returning to the Sunshine State, where at least the sub-prime crisis seemed to offer the prospect of cashing in on the stricken property market. Sid was not put off by economic situation; on the contrary, he had always known what goes up must come down, and vice versa. In his reckoning property would soon be as far down as far as they could get and cash rich investors from all over the world would soon be scrambling to pick up good deals in Florida.
Miami was living up to its reputation as a sunny place for shady deals and Sid was one of those buyers who, convinced the time was right time, was determined to grab part of the action. He figured that if recovery was not just around the corner it was not that far off, perhaps the green shoots everyone talked of were not yet visible, but the moment was propitious with the market was finally approaching the bottom of the trough. According to Sid’s calculations cash rich foreigners would soon be disembarking in the hope of a good bargain, which they would no doubt get, but not before he took his slice.
Sid’s primary criterion was size, he wasn’t interested in small stuff, he was looking for anything from a thousand square feet upwards, then came proximity to the beach, restaurants, nightlife not forgetting the ever present Miami problem of security. The rest held little interest for him in spite of the heavily discounted prices in Coconut Grove, Coral Gables and South Miami. Sid’s focused his attention on Miami Beach, Surfside, Bal Harbour and Sunny Isle Beach. Orlando and the rest was for the chavs and their budgets represented slim pickings.
People forgot that whatever happened America was full of people with plenty of money. Especially those who ran businesses like Terry Young, plenty of cash, import-export oriented, dealing with showbiz stars and the like.
Not all were so lucky in Florida. There were places like Fort Myers, so recently a boom town, where new home prices had doubled in the space of three or four years before plummeting to less than their original price in 2009. They were the homes for workers; McDonald burger flippers and an army of strip workers. Areas of Fort Myers now resembled a war zone, areas where a couple or so years previously there were more jobs than people to fill them. With the crisis restaurants and stores were closing down, and one in four people were reduced to food stamps. In many other parts of Florida the collapse of the American Dream was the same, bringing misery to countless ordinary families.
‘Fantastic deal, last year they were asking over four million,’ said Sid convincingly, turning to point to the spectacular view from the apartment’s panoramic windows. ‘Fabulous, in the morning you can see the sun coming up when you’re having breakfast on the terrace watching the boats sailing by. It’s unbeatable.’
Sid had no difficulty in convincing Terrence Young to go for the condo intended for his daughter who managed his designer fashion boutique on Ocean Drive. What Sid did not tell his friend was he had picked up the property just a couple of weeks before with a mere five percent deposit. A distressed seller with creditors hot on his heels had been happy to find a buyer at almost any price.
Sid could not have gone wrong, he knew the rules; quality and location, and the two thousand five hundred square foot apartment in Bal Harbour had just that, situated to north of Miami Beach, a view overlooking the pale blue pools thirty three floors below with the sea and beach on three sides.
Terry, to his pals, an expatriate Brit, was one of the many more colourful and less scrupulous characters that lived in and around Miami. Owner of a trendy night club in the Art Deco district and a small but very exclusive chain of up-to-the-minute fashion boutiques specialized in designer jeans and accessories. He subcontracted the fabrication in sweatshops in Mexico, where it was rumoured he had dealings with a drug cartel.
Terry had every reason to feel pleased with life as the money flowed into his business. He was a friend of the stars who wore his fashionable designer jeans; the kind of people who frequented his night club, or who bought his jeans did not look at the price tabs.
Sid Judge had first met Young in Romford in his early days when he needed a young tough to accompany him on his rounds collecting unpaid rents. Terry Young, always in and out of trouble, mainly with the police, nothing serious, fights and general unruliness, had gotten on the wrong side of a local police inspector. Sid provided him with enough money to tide him over in Spain whilst things cooled off, but then Terry got himself into a serious brawl with
a couple of drunken tourists in a Sitges bar, unable to return to the UK he was forced to flee to France to avoid arrest.
He enrolled in the French Foreign Legion and after a three year stint ended up in Marseille where he met his wife; then owner of a stylish fashion boutique. Without any other skill or experience than that of a tough Legionnaire, he was hired by a security firm, first for the Cannes Film Festival, then to accompany a French pop star on a concert tour in Morocco.
After another brawl outside a smart Marrakech nightclub, he was arrested, accused of drug dealing and jailed. By chance found himself in the same cell as James Milland, a spoilt heir to a British property fortune, going through a wild period of drunken debauchery. Much sobered Milland befriended Young, who speaking fluent French found a local lawyer and after payment of a hefty bribe, arranged by Milland’s family, the charges were dropped and the two men were invited to return to London.
Back in the UK Young had little difficulty in persuading a grateful Milland to put up the money to open a new London nightclub club. Their target was the French colony: young traders and City workers who had invaded London, attracted by the booming financial sector and the opportunities in the freewheeling fashion and showbiz world. Situated off the Kings Road in Chelsea, The Marrakech, a reminder of their adventure in Morocco, was an instant success. Even on weekdays it overflowed with high flying traders and their friends, eager to spend their lavish salaries and bonuses, letting off steam along with the showbiz crowd attracted by glitzy media gossip.
Young’s wife, Marise Lang, created a Marrakech fashion line, and surfing the wave of success they successively opened clubs in St Tropez, Miami Beach and Marbella. The openings nights covered by leading gossip magazines featured a galaxy of showbiz personalities: Madonna, Michael Jackson and Paris Hilton, starring David Guetta and other DJ stars. The fashion line became a must, every budding would be wanted to be seen wearing a Marrakech creation; the most exorbitant the price ticket the better.
Sid made a hefty profit on the sale of the Miami Beach penthouse, which he promptly used to buy and flip another bargain he picked up in the same luxury condo a friend Terry had introduced him to. Sid was back in his old business.
As always Sid could not resist making the kind of friends he should have best avoided; his latest were in money laundering for Mexican and Colombian drug cartels. Miami had become the hub of a vast a cash flow system serving to an ever expanding drug network that supplied European markets. Colombian cocaine was shipped across the Caribbean in a system of cash transactions requiring a highly planned network for the laundering of the huge quantities of cash involved.
The money was channelled to Caribbean banks and then, after laundering in tax havens, invested in legitimate businesses including the Miami real estate market. From the US dollars were shipped in vacuum packs hidden on boats and planes of every description and deliver to the Caymans, the Virgin Islands and lesser known destinations such as Antigua and Dominica. It was thriving business, carried out on a vast scale, with huge profits, tax-free, no regulations, no questions asked and no crisis.
Sid was one of the few outsiders to have witness their clearing operations, run on business lines, equipped counting machines and state of the art industrialized packaging systems. Watching the millions of used dollars efficiently processed and packed reminded him of waste paper — green paper. The packing machines were designed for containers and could be loaded onto trucks and transported to a new location at a moments notice. A meticulous accounting system recorded every single dollar of clients’ money that passed through the system.
At the UK and European end of the laundering system channelled the incoming cash into a network of legitimate money changers and cash transporters who delivered the money directly to Caribbean banks.
The world market for hard drugs represented a dynamic high growth sector compared to that of cigarettes and alcohol. It was the only sector in that end of the leisure market that was really making good money. Across the Western World cigarette smoking was being forced out of its usual haunts: pubs, bars, restaurants and even public places. Drinking and driving had been outlawed in an age when a driving licence was indispensable. It was no longer possible to spend a relaxed evening out in the company of friends smoking and drinking. Consumers abandoned their age old traditional and legally consumable soft drugs for cocaine, a discreet and easily consumed drug once reserved for stars that could now be snorted in the toilets of any club, pub or bar, available everywhere, affordable to any casual or serious consumer.
Ocean Links, the golf club where Sid Judge had made many of his deals during his earlier ventures in Florida, was a shadow of its former self. The players were older, many well into retirement. They considered themselves to be fortunate, still able to play golf in an exclusive and expensive club. Many of their absent former friends had lost everything in real estate deals, Ponzi systems and other scams.
Behind well the trimmed hedges and impeccable gardens stood the elegant early twentieth century wood framed club house overlooking the beaches of the Atlantic. For generations wealthy members had exchanged tips on lucrative deals, Wall Street rumours and insider information. In the past the club had been more select. Whenever a new member arrived it had been the tradition to present him to the wealthy and powerful inner circle. Years, even generations, had been required to be admitted into that hallowed circle. Newcomers remained on the fringes where they were thrown the crumbs, used, or sometimes plumed by the more predatory members.
Those who could have remembered Sid from earlier times were gone; bankrupt or deceased. Times had changed. Like many Florida golf clubs, even the most exclusive, Ocean Links was trying to keep pace with rising expenses and falling membership. When Sid presented himself as a former player, disdaining the extravagant membership fee, he was made welcome.
Times were hard for so many. For Sid it was different, with his instinctive guile and a ready reserve of hard cash he knew it was the right moment to make a killing.
In spite of the fact that more than one and a half million home owners had defaulted on their mortgages during the first six months of the year and people losing their jobs at an alarming rate, Sid Judge felt confident. His newly found friend, Henry Turner, was the president of the Albany Savings and Deposit Bank, the headquarters of which were conveniently situated in Savannah, just a couple of hours drive north from Jacksonville. What attracted Sid to Turner was the fact that his small bank was doing well at moment when so many other similar small institutions were in trouble.
Like many small American banks the Albany attracted a lot of hot money, volatile money, that jumped from bank to bank in search of the best interest rates. Sid soon discovered the bank owed a good part of its phenomenal growth to Juan Ramón Jiménez, a Venezuelan expatriate, and his friends.
What intrigued Sid was how, in spite of the ongoing crisis, had the Venezuelan’s property empire continued to thrive in hard hit Florida.
Phnom Penh