Looking for a DC or OC? Note this advice - 3 out of 4 Bills = BAD !

[bobblehead]

Just the one thing I know off the top of my head goes like this (mind you we are talking 25 years ago, I was in college, my exact memory and names are fuzzy at this point.)

Jones got appointed to a board of an S&L that handles a lot of real estate deals. One such deal that the S&L acquired was a land with natural gas. Jerry used a sub corp to buy the land, drill for gas, make a ton of money and then sold it back to the S&L. I can't even count how many legal rules were broken, much less ethical ones.

1) Jerry and the S&L knew damn well there was a ton of gas on the land, but sold it for $15 million to Jerry with out opening it to bidding.
2) Thus they ripped off everyone with a stake to the land, and anyone who had a stake in the S&L
3) When damn near all the gas was gone, Jerry sold it back to....the same S&L (that he was on the board of) for $175 million thus ripping all stakeholders off a second time.

I have no idea what Jerry made in oil, but I can guesstimate that he made about $300 million in this crooked deal alone. He may have been brilliant in oil...or he may have made his money the same way he made millions in this deal.

[pbmax]

Just the one thing I know off the top of my head goes like this (mind you we are talking 25 years ago, I was in college, my exact memory and names are fuzzy at this point.)

Jones got appointed to a board of an S&L that handles a lot of real estate deals. One such deal that the S&L acquired was a land with natural gas. Jerry used a sub corp to buy the land, drill for gas, make a ton of money and then sold it back to the S&L. I can't even count how many legal rules were broken, much less ethical ones.

1) Jerry and the S&L knew damn well there was a ton of gas on the land, but sold it for $15 million to Jerry with out opening it to bidding.
2) Thus they ripped off everyone with a stake to the land, and anyone who had a stake in the S&L
3) When damn near all the gas was gone, Jerry sold it back to....the same S&L (that he was on the board of) for $175 million thus ripping all stakeholders off a second time.

I have no idea what Jerry made in oil, but I can guesstimate that he made about $300 million in this crooked deal alone. He may have been brilliant in oil...or he may have made his money the same way he made millions in this deal.

We are in dangerous territory going back this far in my memory, but wasn't this kind of self-dealing a significant portion of the problem in the S&L crisis? Jones might have been slightly different as he was only interested in drilling rights, but I believe this kind of self deal was common.

The overall problem was the collapse of commercial real estate and their exposure to that market (deregulation allowed S&L's to venture into this territory very aggressively), but because inflated prices kept income and profits soaring, the boards started to concoct deals for themselves since the books would look good with climbing prices.

Selling it back to the S&L is just astonishing.

[woodbuck27]

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