Fisherman hooks $276 million

Plaintiff: Scott Steele, fisherman and entrepreneur, is still digesting a jury's award of $276 million to his Catonsville company, Steele Software Systems.

March 28, 2002|By William Patalon III | William Patalon III,SUN STAFF

The day after a jury awarded his software company $276 million in a civil fraud case, Scott Steele could, of course, have been on an airplane to someplace warm, where he could forget about the stressful lawsuit while engaging in his chief avocation: fishing for sailfish, white marlin or blue marlin.

But not Steele. Yesterday, the 44-year-old president of Steele Software Systems Corp. was back at work at his Catonsville company, fishing instead for ways his technology company could build on the momentum it has managed to achieve in recent months, in spite of the distracting lawsuit.

That commitment to success exemplifies Steele, whom associates describe as an entrepreneur whose dedication and big-picture thinking have been the key ingredients in his company's success.

"Scott is a visionary - a think-outside-the-box kind of guy," said Nicholas P. Croce Jr., chief operating officer of 3S/RealServ, the part of Steele Software Systems that gathers residential real estate information for lenders. "He's very dedicated and demanding, has his hands in everything, and is a hard-charger when he has an idea and sees what he wants."

Steele Software Systems was founded in 1989, evolving out of an earlier venture that Steele started with several partners. It's privately held, so no financial statements are available. It employs about 70 people, will have sales of roughly $15 million this year and is profitable, according to its founder.

When it was a much smaller company and on tenuous ground, Steele Software was hired by regional banking giant First Union National Bank - now part of Wachovia Corp. - to develop and distribute technology that automated the approval process for home equity loans. After that goal was achieved in 1997, First Union's loan business accelerated, and Steele was nominated for the bank's "Vendor of the Year" award.

A year later, however, First Union apparently decided to go it alone - and cut Steele Software out of the deal as it built up a business with annual revenue of $2.4 billion, the local company alleged in its lawsuit against the bank.

According to Steele, that clearly violated the agreement between the two firms. The jury this week sided with Steele Software, awarding a total of $276 million: $76 million in compensatory damages and $200 million in punitive damages. The judgment will almost certainly be appealed by the bank, which said the verdict was not justified.

Steele, a Baltimore-area native, is the son of the late Bill Steele, a U.S. Navy commander, and Meneta "Peggy" Steele, a retired United Technologies employee.

A heavy-set man with dark hair, glasses and a mustache, Steele talks with pride about how his workers have succeeded, despite the adversity of recent years. And he's just as proud of what he's achieved, considering he's neither a "double-E" (electrical engineer) nor an M.B.A. Indeed, Steele is candid in saying he has no college degree: After Steele's 1976 graduation from Lansdowne High School, - where he played lacrosse - his formal education consisted of a few classes at what then was Salisbury State.

A lifelong fisherman, Steele admits to one vice: "catch-and-release" sportfishing. He competes in tournaments from Ocean City to South America. In October 2000, he won the Venezuela International Grand Slam Billfish Tournament, catching two blue marlin, seven white marlin and eight sailfish. The 5,000 points he earned were 900 more than the runner-up.

"Fishing in Venezuela was just awesome," he says, his enthusiasm underscoring his words.

Career-wise, however, it took Steele awhile to reel in the big one.

One of his first ventures was the purchase of a gazebo-shaped building in Ocean City that he thought would make a fine nightclub and restaurant. The building was in the way of a construction project and was about to be razed when Steele bought it in the early 1980s, cut it in two and moved it 28 blocks to a new spot. He and some partners opened a nightclub, upgraded it to a restaurant and operated it for several years. The business closed in 1986, and the city later bought the building, Steele said.

In the meantime, Steele bought his first computer, a suitcase-style Compaq that taught him the rudiments of programming and helped him see the device's business potential. He said he combined that new knowledge with what his property venture had taught him about real estate, and in 1987 he and several partners started Automated Title Systems. The company created a means of transmitting real estate title information over telephone lines via PCs and modems.

Then came Steele Software Systems and still more new ideas. Among them: iauto mortgage, which uses a modified version of Steele Software's Internet-speed, loan-approval technology to enable consumers to buy cars using home equity loans.

David H. Bowman, senior vice president and senior lending officer for American Bank in Rockville, the lender affiliated with the project, said iauto has a lot of potential. "This could be huge if it works," Bowman said.

It's the promise of iauto - and other still-untapped ideas - that has Steele excited about getting back to business after weeks in the courtroom. A big payoff in the lawsuit might have some entrepreneurs pondering retirement. But not Steele.

"I just want to see it through to fruition, to build it," Steele said of his company. "There is too much here, too much value here."

And still too much to do.

Sun staff writer Robert Little contributed to this article.

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