Friday, September 27, 2013

Living The Big Sky Life: The Smell Of B.S.

In an earlier post titled “Well-Heeled Bulldogs,” I made mention of an affluent and prominent pillar in the Whitefish community named Werner E. BusterSchreiber, whom I dubbed Mr. B.S. As I said, Mr. B.S. was always impeccably coiffed and expensively dressed in tailored suits, silk ties and tasseled loafers, weather notwithstanding. He drove the only new Mercedes in the village and there was never a question about who was in your midst when that pale yellow 450SL came around the corner. I also said that Mr. B.S. appeared to have his fingers into everything, and I meant everything.

Carla had told me early on that Mr. B.S. came from a relatively well-to-do cattle ranching family with roots in the wide open ranges of northeastern Montana, and that he was raised in a tiny town called Wolf Point. His public C.V. described him as an attorney and owner/president of Mountain Bank. He’d been named “Citizen of the Year” by the Whitefish Chamber of Commerce in 1988, had been once celebrated as the King of Winter Carnival, and he’d served on the Whitefish city council, amongst other things. He was basically hailed throughout town as a model, church-going citizen with a devoted wife and two nice children.

His political influence was unquestionable for he was known during my tenure to be friends with (former) Montana Governor Marc Racicot (R-Mont.) and he had active ties with Montana Senator Max Baucus (D-Mont.) As president of Mountain Bank, Mr. B.S. had made it a point to be a driving force in the business community, and this included a 10% ownership investment in my office, Whitefish Title Services, and various real estate development projects, especially around Whitefish Lake where he lived with his family.

In 1990, about 18 months before my big sky arrival in May of 1992, Mountain Bank had begun to attract the unwanted attention of the FDIC. Apparently the Feds were hot on the scent of what they believed was dirty money being laundered through the bank with insider help. Their pursuit ultimately led them to insider Gordon Ochenrider, bank Vice President and second in command under B.S., who they determined was processing illegal transactions through Mountain Bank on behalf of the Colombian drug cartel and the Luciano mafia family.

Unfortunately, Gordon Ochenrider didn’t live long enough to write a book about it, let alone sing like a canary when he eventually turned state’s evidence. (More to come on Gordon in a future post) After ensnaring Gordon, the Feds struggled unsuccessfully to tie Buster to the scheme since they allegedly suspected that Gordon couldn’t have done what he did without Buster’s complaisant knowledge or even participation. They smelled a rat but couldn’t find enough evidence to cage it so they made sure the FDIC came in to thoroughly audit the bank every year thereafter. When the Feds couldn’t find anything incriminating after five consecutive years of audits, they had to stop targeting the bank and simply wait. FDIC suspicions still swirling, they didn't have to wait long because the whole thing blew wide open about a year later, but not for the reasons suspected.

Like most things small town Whitefish, people were rarely what they appeared to be on the surface. I suppose when a man like Mr. B.S. is perceived by the community to be substantial, influential, even powerful, the by-product can be not only a false sense of security and self-importance, but an untouchable sense of impunity.

Case in point takes me back to my arrival in to the office one Monday morning. When I walked through the office door, Joan excitedly greeted me with a question, “Did you hear about the incident at Mountain Bank over the weekend?” Incident? Clearly I had not, yet everyone was talking about it. Apparently late Saturday afternoon (former) Assistant Police Chief, Larry Hayward, was out on a routine patrol of downtown Whitefish which included the parking lot of Mountain Bank. When he saw that the front lobby door of the bank was slightly ajar, he called the incident in to the station and cautiously entered the building to investigate. Reverberating throughout the two-story atrium lobby were voices that seemed to be coming from one of the offices on the second level, so he quietly proceeded up the stairs with his handgun leading the way. When Larry came upon the occupied office which happened to be Buster’s, he found Mr. B.S. with his pants down around his ankles robustly copulating with a woman who was bent over his desk. The woman was Larry’s wife.
The story was even confirmed by my daughter who was a classmate of Larry’s daughter. The Hayward marriage did not survive the incident. Buster’s wife, however, was a classic stand-by-your-man type of wife. On the surface, nothing seemed to change with the Schreiber’s public image of coupledom. It was business as usual.

I had a stinking suspicion that something untoward was up with Mr. B.S. when I got a phone call at work from an east coast mortgage lender in July of 1995. The lender wanted me to do a courtesy loan package signing in my office for the Schreiber’s since the location of my title office was more convenient than the Kalispell County Guaranty Title office contracted to insure the $600,000 jumbo loan transaction. The loan was secured by their home on Whitefish Lake and was done to pull cash out of the property's equity. Buster needed the cash for something big and his wife appeared to be quite oblivious to the implications.

One of the things that made the transaction suspicious to me was the fact that he didn’t have the transaction insured through my office – an office he owned a 10% interest in. Not only would he likely have received a discount for the $2,400 title insurance premium collected from the transaction, any premium paid would’ve benefited the financial bottom line of a business he had an ownership interest in. It didn’t make sense to me. It was obvious he’d intended for the transaction to be kept secret, and when it became unexpectedly exposed, Buster was friendly enough yet fidgety and very uncomfortable in my presence.

During that courtesy signing and much to Buster’s relief, his wife chatted me up about Cater To You. She’d recently been to a party Chef had catered and loved it, and she wanted to know if we could cater a party on short notice. The first dinner party we catered for the Schreiber’s was at their home on 16 September 1995.

It was a small group of nine. The guest of honor was a Mr. Hudson – we were told he was a top-level executive with the Las Vegas Hilton. Also in attendance were Buster and his wife of course, Jim Nabors and his friend Stan, a commercial contractor with his wife, and another couple. 

Chef was asked to build the menu around large vacuum sealed packages of fresh salmon that had been caught by Mr. B.S. while on an Alaskan fishing excursion with Mr. Hudson several months earlier. As I served the guests, it was hard not to notice how Buster thoroughly enjoyed living the big sky high life, and running with a Vegas mucky-muck added a high-rolling edge to the fun. For me, I suppose it was all about having an opportunity to proudly wear the ring Soho had given me.   

The next function we were asked to cater for the Schreiber’s was a political fundraiser for Montana Senator, Max Baucus (D-Mont.) on 4 May 1996. There were quite a few movers and shakers in attendance and a sit down dinner wasn’t feasible. As I worked the room with my hors d’oeuvre tray, it became apparent that the talk around town about the state preparing to consider proposals from commercial contractors for the expansion of the “pray for me, I drive 93” highway was of primary importance to several of the attendees. It was clear that the large commercial contractor who attended Buster's private party mentioned earlier was at this fundraiser on behalf of his construction company, and he was prepared to make a persuasive donation for favorable positioning when it came to contract consideration. Mary Hart, along with her husband Burt Sugarman, were also in attendance.

It wasn’t long after the Baucus fundraiser that FDIC regulators had what they needed to force Mr. B.S. to step down as President of Mountain Bank, but not enough to charge and convict him. Buster moved out of the bank and went across the alley to set up his office in the Frank Lloyd Wright Building where my old Security Title office had been located. With the help of several faithful employees and their daily delivery of reports and documents, Buster had what he needed to secretly run the bank. What he didn’t know was that the FBI had enlisted, under a secret grand jury task force, the help of (former) police detective, Roger Bergstrom, whose job it was to daily dumpster dive in the alley at 4:00am in search of incriminating evidence.

Bergstrom must’ve found what the Feds needed to charge and convict because in 1998, Mr. B.S. was sentenced to six years and four months in the big sky big house on charges of fraud, embezzlement and money laundering. I don’t believe he served the entire sentence and benefited from an early release. Court testimony did note that Mr. B.S. repaid all of the money lost by the bank, including the money that fraudulently went to con-man extraordinaire and convicted felon, John Petersen - the man who proved in the end to be the nucleus of Buster’s downfall.

In my experience, Mr. B.S. was pretty likeable, albeit a bit naïve. It was said in court reports that he lacked toughness and street smarts. Was he a slick and heartless con-man with a strategic criminal mind? Hardly. Had he thought more like a criminal instead of being used by one, he would’ve undoubtedly been less vulnerable to the predator who was ultimately convicted of conning him. At the very least, he would’ve protected himself better.

After he was released from the big sky big house, word on the street was that he returned to Kalispell and began to work as a mortgage loan officer for a local mortgage company. As a convicted felon, his banking days were clearly over forever. I don’t believe the mortgage job lasted very long however, and it was said that he and his wife looked to get a fresh start in Arizona although their ties to Whitefish still remain.

It’s funny how small our world is. About a year or so after I’d left Whitefish, my girlfriend, Soho, found herself enjoying a happy hour glass of merlot at the Martini Club in Atlanta’s Buckhead district when she began to have a friendly conversation with a nice couple sitting next to her. When Soho mentioned that she’d come to Atlanta from Whitefish, the couple incredulously responded with an all-knowing, “Whitefish is a bad place. Bad things have been going on there.” That couple knew what they were talking about. They worked for the FDIC.

Living The Big Sky LifeTM 
© by DK King

Thursday, September 5, 2013

Living The Big Sky Life: Infamous Files

It takes all sorts to make a world, yet the smaller the world, the smaller the margin for those deemed to be out of sorts. At least that’s how it seemed to me. But it’s not as if what happened around me in small town Whitefish was really any different than what was happening anywhere else in the world. It was simply more encapsulated, more magnified.

Whatever our sort may be, the world’s machine continues to turn with little heart or without letting a little thing like inequity get in the way. Life goes on and the business of living right along with it. And so it was with my work-a-day-world and the demanding flow of escrow files that continued to ceaselessly cross my desk during my big sky incarceration.

A snapshot of that incarceration would’ve likely shown me onerously confined to my Whitefish title office with a burdensome ball and chain, but I had one seller client who knew what real life incarceration looked like from the inside - and I’m talking the big sky big house here. You know, the state penitentiary located just outside of Deer Lodge.

This particular escrow file involved the sale of a large tract house in an established neighborhood south of Whitefish off of Highway 2/LaSalle Road. The transaction started out normal enough, meaning the real estate agent brought me a signed sales contract with no extraordinary conditions, and Joan set up the file by ordering the prelim with our Flathead County Title branch.

The next day I received a phone call from Clyde, the title officer who’d been assigned to prepare the title work I needed to close the transaction. In that deep baritone voice dripping with the dry wit and sarcasm he was known for, Clyde drolly began our phone conversation with, “I’m calling you about your Pedo-File.”

Pedo-File? What Pedo-File? Apparently this particular seller was no longer living in the house he was trying to sell, but was confined to a cell in the big house down in Deer Lodge. He’d been convicted of sexually abusing his young stepdaughter and needed to pay his legal fees with the proceeds from the sale of the house I was tasked with closing. I thought it strange that the contract made no mention of the seller’s unusual residence, let alone offer up instruction on how I was supposed to arrange for the seller’s proper execution of the closing package, which ultimately proved to be a little challenging.

Suffice it to say, the Pedo-File closed without incident or fanfare. Clyde’s title report came with a full copy of the court’s summary and conviction which provided me with far more information than I ever cared to know about the convicted felon who was now my seller. Every subsequent conversation I had with Clyde regarding this transaction heard us only refer to the escrow as the Pedo-File, never by name – which frankly I couldn’t remember today even under torture.

And then there was the 3-way property exchange instigated by a con-artist that had to be closed before 31 December 1994. The year-end deadline wasn’t highly unusual for this business when considering fiscal year end income tax issues, but the fact that the contract wasn’t delivered to me by the real estate agent, Ron Laurent, until Christmas Eve was a major issue. And it was the sloppiest and most poorly drawn up contract I had ever seen, hands down. How was I supposed to structure this complicated triangle of transactions without proper contract instruction or proper legal clarification/documentation for the commercial and 1031 exchange aspects of the deal that were not mine to handle?

I was told by Ron that no assistance would be forthcoming, just slap it together and make sure it closes on time, he demanded with little sympathy. He clearly had a large personal stake in the deal and it came in the form of a huge commission check, amongst perhaps other things that I didn’t care to know about. He pressured me mercilessly for updates by showing up at my office unannounced and unwanted several times throughout the day.

When most people are peacefully enjoying the holiday season between Christmas and New Years, I was having a full-on melt down and popping migraine medication like candy just so I could function well enough to close these deals under deadline as instructed.

Although it was not my responsibility to determine whether or not these transactions were in the best interests of the parties involved, it was incumbent upon me to make sure I didn’t complacently participate in something that was illegal. And while there appeared to be nothing illegal on the surface, I knew something wasn’t right. Everything about the contract felt suspicious to me, especially when considering that one of the parties to the contract was Kalispell attorney, John Lence. Like I said, the contract was the sloppiest and most poorly drawn up contract I had ever seen, and this so-called professional signed it that way?

I learned not long after leaving my big sky life behind that John Lence, Michael Allen (a Columbia Falls dentist,) and John Petersen (investment advisor and con-man extraordinaire) – all parties to this convoluted nightmare of a contract, were the trio that ultimately brought down Werner “Buster” Schreiber (aka Mr. B.S.) and his Mountain Bank.

A State of Confinement?
Fraud, embezzlement, conspiracy … it’s the stuff of crime novels, yet there it was, sinisterly simmering beneath the secretive smiles of the small town movers and shakers. As for the tried and convicted trio, they too got to do time in the big sky big house right alongside the Pedo-File.

Living The Big Sky LifeTM
© by DK King