01.22.14 10:45 AM ET
Former Navy Officer Bryan Caisse Is Accused of Defrauding Friends and Classmates
Bryan Caisse was once the weapons officer on the nuclear submarine USS John Marshall, named for the late chief justice and outfitted to serve as a special operations SEAL mother ship complete with underwater swimmer delivery vehicles right out of an action movie.
Now the 50-year-old Naval Academy graduate is charged with running a Ponzi scheme as a kind of mini-Madoff who sought to defraud some 20 good friends and former classmates of more than $1 million.
His lawyer, Bradley Simon, insists that Caisse is in fact a kind of indirect Madoff victim, a legitimate businessman whose newest venture hit hard times when beastly Bernie’s monumental scheme collapsed and scared investors away from anything but the best known and long established firms.
“This is not a Ponzi scheme,” Simon maintains. “He ran into a little bit of trouble ... He went to a group of close friends and asked them to lend him money … helping him to start a company.”
Caisse does seem to have at least set out to build an actual business, reasoning that there were big profits to be made in purchasing securities derived from government backed mortgages that others had dumped in a panic. He seems to have been not so much bent on taking big risks as deliberately capitalizing on the result of those who did.
“He expects to pay back every loan … to make it whole,” Simon insists.
The prosecution insists that Caisse used the money to finance a lifestyle to which he apparently became accustomed during his years in finance; an apartment overlooking Central Park, private school for his 13-year-old daughter, restaurants, a leased car, gym memberships. He is said to have hired several people to work at his new firm, but failed to pay them a penny while he allegedly racked up tens of thousands of dollars in purchases with an American Express card that is in his mother’s name.
The prosecutor says that Caisse’s mother was stuck with a huge unpaid balance after the borrowed money apparently ran out. Caisse’s lawyer voices confidence that all is well between his client and his mom.
“His mother is still very much in his corner,” Simon says.
Simon further contends that a number of “so called victims” also continue to support his client. The prosecution speaks of lenders who became exasperated after being repeatedly promised repayment only for it never to materialize.
The prosecutor says that Caisse claimed to have suffered a head injury in 2009 that blanked out the loans.
“He told one person he did not remember taking any money because he had a concussion,” Assistant District Attorney Sean Pippen told Judge Ronald Zweibel at the arraignment in Part 41 of Manhattan Supreme Court on Tuesday.
Caisse had a relatively minor car accident at a tollbooth in August 2001 and supposedly used it to claim a variety of exaggerated injuries, including brain damage, eye damage, a torn shoulder, broken hips, and headaches, all as ploys to avoid making good on the debts.
“When it came to taking and spending money, the defendant was fine,” Pippen said in court. “When it came to paying it back, he was helplessly and horribly bedridden.”
At one point, Pippen reported, investors began receiving emails from someone who identified herself as Kristy Smith and said she was Caisse's personal assistant. Smith is said to have repeatedly pledged to send checks or arrange wire transfers that never arrived due to one purported mix-up or another.
A person who asked to speak to Smith on the phone was purportedly told that she was too embarrassed by her lisp and English accent, which was surprising, as her emails contained distinctly American idioms. The investors were then told that Smith had been fired and replaced by an assistant name Christine Woo, who also communicated only by email.
“The defendant was lucid enough to create fake people and engage in lengthy back and forth discussions with victims, continually asking for wiring instructions, continually saying checks were mailed, that someone the defendant knew died, that the defendant was in the hospital, that the checks got lost in the mail, and so on,” Pippen said, describing how Caisse functioned with his supposed brain damage.
The charges put forth in the indictment are only grand larceny, but Pippen asked for $3 million bail, noting that Caisse had been arrested at an airport in Bogotá, Columbia on Saturday.
Pippen contended that Caisse had fled New York to avoid prosecution after a search warrant was executed at his Manhattan apartment on October 8, 2013. Investigators seized computers and various records and documents, including Caisse’s passport.
The next day, Caisse requested through his lawyer the return of the passport. The prosecution agreed, reasoning that Caisse would not likely abandon his daughter, having secured sole custody after a protected legal fight.
The passport was returned on October 18, even as a grand jury was hearing the case against Caisse. He was soon after indicted and the prosecutor contacted Caisse’s lawyer to arrange for his client to surrender.
Caisse reportedly did not show up at the agreed upon time and his lawyer had it put off until the following week. Caisse again was a no show.
The prosecution says it subsequently determined that contrary to the expectation based on his apparent attachment to his daughter, Caisse had purchased a one-way ticket to Bogotá the day after he got the passport back.
The prosecution secured a warrant for Caisse and arranged through the State Department to have his passport revoked. Authorities say that he was seeking to fly to another part of Colombia when he arrested at the Bogotá airport. Several suicide notes were reportedly found in Caisse’s luggage, though it appears that he had been having as good a time partying in Colombia as he generally seems to do everywhere save in custody.
Caisse's lawyer insists that Caisse was headed back to the United States. Simon further maintains that his client only went to Colombia to work as a financial consultant for somebody who is building a resort and was not aware that he had been indicted.
“Yes, he didn’t come back right away,” Simon does allow, but says that is only because Caisse had not finished his project there.
In court, Simon was adamant that his client was no Madoff, just another man on the make who out borrowed his immediate ability to pay back.
“These were loans,” Simon said. “He’s always acknowledged his obligations to repay them.”
Caisse was not the first member of the Naval Academy class of 1985 to run afoul of the law. Lisa Nowak had gone on to become an astronaut and caused quite a stir in 2007, when she was arrested for the attempted kidnapping and attempted murder of an Air Force captain in what authorities called a love triangle.
Caisse was then the class secretary and issued a statement in support of her, saying, "She never hesitated to lend a hand or assist someone in need. She has been an incredible role model as a Naval Officer, astronaut and mother, and has shared her success with many others.”
The onetime astronaut subsequently pleaded guilty to a reduced charge. The onetime nuclear submarine weapons officer has entered a not guilty plea. And, as of Tuesday night he was remanded on $3 million bail.
He who once sailed the deep in the SEAL mother ship now sits in a New York City jail cell.