Tito’s Great Heist(s)
In last week’s newsletter I began with what I assumed would be a throwaway introduction about the Yugoslavian space program in the 1960s. Unexpectedly, readers were interested in learning more. Some people - okay, one person - thought it was funny that my first newsletter about scams lead with a story of dubious veracity. So! In the interests of both facts and my readers, I dug in.
After World War Two, Tito formed a coalition of “Non Aligned” countries who did not ally with either Russia or the US. However, like many developing nations at the time, his country was quite poor. He thought big, and decided a space program would be a valuable asset to use for leverage in negotiations with rich nations. His scientists may have launched a three stage rocket. Compared to America, who was struggling with their launches, this appeared promising. Tito eventually negotiated a $2.5 billion dollar deal to sell the entire space program to the US. The technology was transferred via cargo ships in Morocco. The whole thing was kept secret.
Soon after, Yugoslavia became the wealthiest socialist nation in the world. The problem was, in the view of the Americans, the space program wasn’t much of a program. They were furious. After some deeply depressing American colonialist foreign policy I won’t get into, they saddled Yugoslavia with billions in crushing debt as punishment for their deception.
As his second act, Tito cut a deal with the Americans to work his way out of hock by selling them cars. That’s right, you guessed it. The Yugo was Tito’s attempt to pay the bill from the fake space program. It probably was not an accident that the first target the US military bombed in 1999 was the original Yugo car plant.
The bulk of this information comes from a Slovenian documentary, which is now on Netflix. Further confusing things, they’ve classified it as “docufiction” and it’s listed as a comedy which it most certainly is not. Is it all true? Is some of it? None of it? I have run out of sources on this one. It’s a compelling tale. Most great cons are. The story didn’t end well for Tito, but scamming the world’s richest country hardly ever does, unless you run for office. I respect the hustle.
Liberty University Slush Fund
Jerry Falwell Jr. is in the news again, for another scandal surrounding his use of Liberty University cash. The school, set up by his father - the famous evangelical preacher and TV personality - has recently made some questionable…investments.
First it was the purchase of a gay-friendly, $4.7 million dollar South Beach hostel and the installation of a literal pool boy as part owner and manager of the property.
The relationship between the Falwells and Granda forms the backdrop of an improbable Miami story that is causing political ripples beyond South Florida. It involves a multimillion-dollar lawsuit, the “pool boy” as he is described in the lawsuit, the comedian Tom Arnold, Michael Cohen, President Donald Trump’s now imprisoned political fixer, naked photographs — and a Miami father and son who say they were defrauded in a real estate deal then forced to change their names due to “threats.”
I’d respectfully argue, Julie Brown and Douglas Hanks from The Miami Herald, that this story might not be all that improbable.
In fact! Less than two months later, we have Falwell texting a photo of his wife in a French maid outfit to the wrong group chat. It was intended for his wife’s personal trainer, who’d recently purchased an 18-acre sports and fitness facility from Liberty for no money down. This time, rather than a personal loan, Falwell had used his non-profit’s money to finance the deal.
In 2016, Falwell signed a real estate deal transferring the sports facility, complete with tennis courts and a fitness center owned by Liberty, to Crosswhite. Under the terms, Crosswhite wasn’t required to put any of his own money down toward the purchase price
[…]
Liberty committed nearly $650,000 up front to lease back tennis courts from Crosswhite at the site for nine years. The school also offered Crosswhite financing, at a low 3% interest rate, to cover the rest of the $1.2 million transaction, the contract shows.
Reuters draws, shall we say, a mildly speculative connection between the two deals.
The support Falwell provided to the two young men, Granda and Crosswhite, has some parallels. Both were aided in business ventures and both have flown on the nonprofit university’s corporate jet.
Now, Politico has dropped a huge exposé on Falwell and his use of Liberty funds to steer money to him and his wife’s, uh, friends. Employees of the university are, to put it mildly, displeased. Some of the highlights:
“We’re not a school; we’re a real estate hedge fund,” said a senior university official with inside knowledge of Liberty’s finances. “We’re not educating; we’re buying real estate every year and taking students’ money to do it.”
“It’s a dictatorship,” one current high-level employee of the school said. “Nobody craps at the university without Jerry’s approval.”
“Everybody is scared for their life. Everybody walks around in fear,” said a current university employee who agreed to speak for this article only after purchasing a burner phone, fearing that Falwell was monitoring their communications.
“There’s no accountability,” a former high-ranking university officer said. “Jerry’s got pretty free reign to wheel and deal professionally and personally. The board will approve an annual budget, but beyond that … he doesn’t go to the board to get approval. … It simply doesn’t happen.”
Very normal!
Falwell has responded to these claims by trying to bring the FBI in to investigate a criminal conspiracy, and warring with reporters for exposing him as someone who visits nightclubs.
This sort of behavior toes the line of an outright scam, because Falwell Jr. was technically given all this power by his deceased father and the school’s board of trustees. In a country with functioning laws, it would be fairly quick work for a state attorney general (cough, Mark Herring) to bring charges for misuse of funds. As we’ve seen, fake charities and non-profit organizations are a favorite tool of the rich to evade scrutiny for their illegal behavior. I think it’s safe to say we’ll see more from Jerry in this newsletter in the future.
I Don’t, I Mean, What?
A federal judge on Monday sentenced Richard Luthmann, the Staten Island attorney who made the cover of The Post in 2015 after he challenged another lawyer to trial by combat, to four years in prison for running a violent scrap metal fraud scheme.
Luthmann, 39, was convicted of wire fraud and extortion for his role in the scheme, in which he and accomplices sold scrap copper to Chinese firms.
To facilitate the scheme, Luthmann and his accomplices paid a blind man who was begging for change and cigarettes outside of Luthmann’s law firm to serve as president of a shell corporation.
Happy Grandparents Day
This past Sunday was National Grandparents Day. I assume this is the one day a year you’re required by law to not touch the thermostat.
The Better Business Bureau decided to celebrate this definitely very real holiday by issuing a list of common scams your grandparents are likely to fall for. Worth a read for those of you young enough to have living grandparents, or for those of us who will soon need to stop our parents from clicking sketchy links in their Yahoo accounts.
Short Cons
New section! Since there are - according to my Google alerts - way too many scams on a weekly basis to write about, I’m writing short summaries with the links below. Enjoy!
Gizmodo - “In seconds, he was able to memorize their name, card number, expiration, and security code.”
Wired - “The Department of Justice today announced the arrest of 281 suspects in connection with ["business email compromise" schemes] and wire transfer fraud.“
Jezebel - “Over a seven-year period the psychic charged the student money for meditation materials, crystals, and candles, all needed to lift this apparent curse.”
As always, email your tips, questions about Yugoslavia, or hate mail to scammerdarkly@gmail.com. Also, mash that subscribe button and force me to learn how to send email!