Clancy was defrauded, authorities say State probing dealer in $7.5 million case

February 18, 1997|By Michael James | Michael James,SUN STAFF

Investigators raid a house looking for missing gold coins and platinum bars. Allegations arise about a multimillion-dollar securities scheme. A suspected con man is said to keep an AK-47 in the safe by his bed.

These aren't the latest plot twists in a techno-thriller by Tom Clancy. Rather, they are the latest developments in the true story of Clancy and the man who authorities say defrauded him.

Clancy and about 100 other people around the country invested $7.5 million with Richard A. Scott, a Camp Springs coin-shop owner who for more than a year has been the target of broad criminal and civil investigations by the Maryland attorney general.

No charges have been brought, but recently filed court papers provide a detailed look into the investigation of Scott, his store, called Goldie's, and the efforts of Maryland investigators to find $2.4 million that they say is missing.

"Goldie's owners were involved in schemes to defraud investors [and] converted to their own personal uses funds entrusted to them for investment, and thereby committed crimes of theft," reads a search warrant affidavit filed on behalf of the attorney general. "In many instances, the stocks listed on the investors' receipts were never actually purchased or traded," the affidavit says.

Instead, large sums were deposited in bank accounts that Scott and his partners used to pay off credit cards, buy cameras, televisions and videocassette recorders, and finance gambling junkets to Las Vegas and Atlantic City, the affidavit said.

Clancy met and made friends with Scott at a Baltimore Orioles game, later becoming his largest investor, with $1.6 million. But he is far from being the person who was hurt most.

Dozens of middle-class investors from Maryland and 17 other states have reported that they lost the bulk of their life savings after trusting Scott, 51, whom they described as an affable, charming man who convinced them he would bring a guaranteed 15 percent return on investments. But Scott did not have the legally required licenses to act as a broker or financial adviser, according to a complaint filed by Maryland's securities commissioner.

"He made us believe he was part of the family," said Dominic J. Lynch of Beaver, Pa., a 67-year-old retired government worker who invested $356,973 with Scott over the past five years. "Now I have to sell my house I've lived in for 19 years, and I hear Richard Scott is still out walking around. It makes me mad all over again."

Complicated investigation

Assistant Attorney General Carolyn H. Henneman described the investigation as complicated and said her office is examining numerous financial documents, many of which were seized in a November raid on Scott's home in Alexandria, Va.

"We don't arrest someone and then start investigating. We do it all ahead of time," Henneman said. "It takes a long time to go through financial records."

Scott and his business partners, Edward Pereira and Jeffrey K. Goodman, have refused to speak to investigators regarding the location of Goldie's assets, the attorney general's affidavit said. Scott wouldn't return phone calls and his attorney, Bruce L. Marcus, would not answer most questions, saying that "we dispute the vast majority of the allegations and factual contentions set forth" in state affidavits.

The raid in Alexandria netted authorities numerous documents, including Scott's stock reports, checking account records, computer spreadsheets of financial activity, and bank books, according to a search warrant receipt filed in Alexandria Circuit Court.

Also seized were photos of Scott posing with a Rolls Royce limousine and with casino magnate Merv Griffin, the receipt noted.

But few valuables could be found, to the chagrin of investigators, who were hoping to find property bought with proceeds from investors. Instead the raiding officers came away with a moderate-quality stereo and a Beach Boys' "Endless Summer" compact disc, which they say they believe Scott purchased with his Goldie's American Express card.

Among the items investigators had hoped to find were 73 gold eagle coins and 30 1-ounce Englehard platinum bars that Scott had arranged to sell to a Harvard University mathematics professor for $40,136, court papers said. But they weren't in the house.

The professor, Arthur Jaffe, said he paid Scott for the gold and platinum in the early 1990s. But Scott had persuaded Jaffe to let him keep the items in a safe deposit box until Jaffe was ready to "accept delivery," the court papers said.

Number disconnected

When Jaffe called the coin shop last summer to tell Scott he wanted to sell the gold and platinum, he found the number had been disconnected. Unbeknown to Jaffe, Scott had declared bankruptcy nine months earlier and closed the store amid allegations of fraud filed by Maryland Securities Commissioner Robert N. McDonald.

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