Investment guru tied to fraud

Eccentric adviser loses memory just before he's indicted

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May 16, 2007|By Drew Jubera | Drew Jubera,Cox News Service

CHARLESTON, S.C. -- He rolled up to the convention center here a little more than a month ago in his signature purple Jaguar with the custom cat-print top. Dressed in a yellow suit, he gave his annual economic forecast for the Chamber of Commerce.

Afterward, the area's most prominent economic guru drove back to Charleston Southern University, where he was a respected professor, and began to melt down. He complained of blurred vision and became incoherent. By day's end, he had checked into a hospital, claiming amnesia.

Al Parish, 49, was indicted last week on 10 counts of mail fraud and wire fraud in what federal investigators allege was one of the biggest and most bizarre scams the region has ever seen - so big and bizarre that the court has called in experts from Atlanta to sort it all out.

About 600 investors from around the country had put more than $100 million in investment funds that Parish told them had grown to $524 million, according to a report filed by a court-appointed receiver.

Almost all of it appears to be gone.

Much of it disappeared in random spending sprees on a wide array of goods. Among the items filling his suburban home were: Red Skelton clown art, a $2.2 million teapot, an ancient Chinese chess set (stashed among his four children's board games) estimated to be worth $500,000, a $590,000 watch (still boxed in bubble wrap) and diamond-encrusted pens sealed in plastic bags. Not to mention the Jag.

"You could hardly move through the house," said Andrew J. Savage III, Parish's defense attorney.

Savage said he could not comment on his client's alleged misconduct because Parish "can't remember it."

Staid old Charleston has been aghast - and enthralled - by the story, an outsized blend of Southern Gothic and Sun Belt sharpie.

"It's a combination of Midnight in the Garden of Good and Evil and A Man in Full," said J. David Dantzler Jr., an Atlanta lawyer working with Hays Financial Consulting LLC to unearth assets. They include more than $10 million invested by the Baptist university where Parish taught. "I've never seen anything like it."

There are two kinds of people in Charleston: those who acknowledge that they invested with Parish and those who can't believe anybody did.

A circus bear of a man from the South Carolina's Lowcountry coastal zone, Parish could be spotted in red suits, in pastel outfits that invited comparisons to the Easter bunny, in ensembles that combined florals, stripes and cartoon characters.

"Charleston seems to embrace eccentricity from time to time," allowed Alex Sanders, president emeritus of the College of Charleston. "But the thing that's startling to me is that, even though we embrace eccentricity, he could talk people out of that much money. It's not exactly confidence-inspiring to wear purple clothes and drive a purple car."

Yet Parish won over almost everyone he worked with. He sat on boards of organizations that ranged from the Charleston Regional Development Alliance to the Charleston Symphony Orchestra.

He wrote a financial advice column in the newspaper - for free.

"He's right up there with the best I've worked with," said Martin Regalia, chief economist for the U.S. Chamber of Commerce.

Raised beside a saltwater creek near Hollywood, S.C., about 20 miles from Charleston, he was the local boy made good who promised annual returns of 30 percent or more. One columnist dubbed him a "bubba-turned-economics professor-turned-financial guru."

"We grew up in the middle of a cow pasture, where everybody worked and went to church," said Johnny Parish, Al Parish's younger brother and supervisor of a road crew, who still lives next to the house where he grew up. "Al was always smart. He could do math problems in his head."

Al Parish earned a doctorate in mathematical economics from the University of North Carolina and in 1990 got a teaching job at Charleston Southern.

He already had begun to invest other people's money, putting their investments in "pools" of different funds, such as futures or bonds. Parish's clients often knew him or had heard about his investment company from those who did. Recommendations came from some of the area's most respected accountants, though Parish wasn't licensed by the state or the Securities and Exchange Commission.

Investigators say the alleged "classic Ponzi scheme" began to unravel early this year when Charleston Southern needed to pull $1.5 million of its $10.6 million investment. Despite a balance on his books of more than a half-billion dollars, Parish couldn't come up with the money, investigators say.

"If you asked me a month ago if I was a good judge of character, I would've said, `Yes,' " said Arnold J. Hite, an economics professor at Charleston Southern whose office was down the hall from Parish's. "Now? I must not be."

Hite said he and his wife put money into one of Parish's most conservative funds. They thought it had grown into a six-figure nest egg. Then Hite learned the fund didn't exist.

"I just wanted to vomit," he said. "I've been beating myself up with, `Why didn't I see it?' I guess I had too much faith in him. He had such deep roots here; it seemed too fantastic that he'd defraud me."

Walking across the North Charleston campus where building projects have stopped because of the school's losses, Hite said, "Multiply my story by 600."

Parish remains in the Charleston County jail, where he has been held since shortly after his breakdown. Still claiming to suffer from amnesia, he has been sued in civil court by Charleston Southern, other investors, and the Securities and Exchange Commission, which accuses him of five counts of civil fraud.

If convicted on the criminal charges, he could receive a fine of up to $250,000 and up to 20 years in prison for each count of mail and wire fraud. He could receive up to five years for a false statement charge.

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