01.03.14 10:45 AM ET
First Rule of the Fake Dead Bankers Club: Stay Gone
You can run but you can’t die.
That’s the message that Aubrey Lee Price learned today. The 47-year-old financier disappeared in the summer of 2012 after having allegedly embezzled $17 million from a Georgia Bank, and had told associates he was going to kill himself. This week, he was arrested after a Georgia policeman pulled him over for a traffic violation.
At first, Price, a clean-cut banker, seemed to be part of the solution to the problems of Montgomery Bank & Trust, a two-branch bank that first opened in 1926, in Ailey, about halfway between Atlanta and Georgia’s Atlantic coast. Like many other banks in the state, it ran into trouble making ill-advised real-estate loans during the credit bubble. By the time Price arrived on the scene as an investor in 2010, it was already listing.
According to the feds, Price used the bank as, well, a piggy bank. He bought a controlling interest in the institution and became a director. “In early 2011, Price took on the responsibility of investing the bank’s capital. Price opened brokerage accounts that cleared through a securities clearing and custodial firm in New York and told the bank’s management that he would invest the bank’s capital in Treasury securities,” according to the Justice Department. But instead of doing that, he “fraudulently wired the bank’s funds to accounts that he personally controlled at other financial institutions and provided bank management with altered documents to make it appear as if he had invested the bank’s money in Treasury securities.”
Price went missing in July 2012, likely because he knew the bank was about to be shut down. On July 2, he was charged with embezzling some $17 million. Four days later, the Federal Deposit Insurance Corporation shut down Montgomery Bank & Trust. Its two branches were taken over by Ameris and the FDIC made depositors whole to the extent of their insurance. But it was an expensive failure. While the bank had about $164.4 million in deposits as of March 31, 2012, the FDIC’s estimated cost of making depositors whole was about $75 million.
For a high-flying financier gone bad, faking your own death is a tempting escape from legal woes. But it’s very difficult to carry off in this day and age.
Even the best fugitives get found out. If you have enough cash and are sufficiently wily, you can live off the grid. But that means going off the grid entirely—and many fugitives aren’t willing to do so. Whitey Bulger, the infamous Boston mobster, disappeared off the face of the earth and managed to stay hidden for 16 years. But rather than retreat to a rural redoubt, or head to a tropical paradise, he went where pretty much anybody with some money would like to go: Santa Monica. After spending a lifetime in chilly Boston, who wouldn’t want to live out his life in an apartment near the Third Street Promenade? Bulger was ultimately discovered when a neighbor recognized pictures of his companion, Barbara Greig, on a television show.
Price did a better job of faking his death than Samuel Israel III. A hedge-fund manager who defrauded investors in a minor-Madoff type of scandal, Israel was slated to show up to a federal prison in Massachusetts to begin serving a sentence in June 2008. Instead, as Guy Lawson writes in Octopus, Israel engineered a haphazard plan to fake his own death. He obtained a new identity—David Klapp, an Iowa man who had died seven years earlier. Israel then drove his red GMC Envoy onto the Bear Mountain Bridge, a large span across the Hudson River. After parking the vehicle in the middle, he scrawled a note in the dust on the car’s hood: “Suicide is Painless.” Then he walked away and stepped into a vehicle driven by “a Mexican kid from a local bar,” who drove him to a rest stop where Israel had parked a camper. His plan was to hang out at campgrounds for awhile, drive to Canada, and ultimately make his way to Costa Rica. (Unfortunately, Israel was captured on film leaving the scene of the alleged suicide by the video camera at the bridge’s toll booth.)
Israel high-tailed it to a campground in western Massachusetts, where he began to grow a beard. But when he learned that the FBI had arrested his girlfriend and were planning to charge her, Israel he turned himself in. (Here’s The Daily Beast review of Octopus.)
Price’s “death” was more persuasive than Israel’s for awhile. As the Justice Department noted, “Aubrey Lee Price disappeared after telling acquaintances that he had lost a large amount of money through trading activities and that he planned to kill himself,” apparently by “jumping off a ferry boat,” in Florida. He had also told people that he owned land in two Latin American off-the-grid redoubts: Venezuela and Guatemala.
But rather than jump into the Gulf of Mexico or flee the country, Price apparently stayed around. He was seen in Key West in the summer of 2012, and the U.S. Coast Guard was unable to locate his body.
For nearly 18 months, Price managed to survive his staged death. He was arrested after being pulled over by cops in Brunswick, Ga., a town about 112 miles away from Ailey, the former headquarters of the bank. The reason: The car he was driving had windows that were tinted illegally.
Which suggests that if Price had been driving a car with clear windows, he would still be a free man.
By now, bankers should know that it always pays to be transparent.