By the time Florian Homm was arrested last Friday at an art gallery in Italy, the former hedge-fund manager and chief investment officer of Absolute Capital Management Holdings Ltd had been a fugitive for six years, accused of defrauding investors of $200 million.
Six years? That’s just the beginning of our questions. Herewith, some answers.
Can you really disappear with enough money?
Yes. To do so, it’s crucial to sock your money away in a safe place before you’re faced with criminal charges. Frank M. Ahearn, a privacy expert and author of How to Disappear, says the best white-collar criminals think like mobsters. “Florian Homm isn’t any different from Boston mobster Whitey Bulger,” he says. “You have to anticipate that the end is always around the corner. As opposed to somebody who commits a crime and isn’t prepared, so he goes on the run and commits other crimes to make money and that’s how he gets caught.”
How did Homm walk through airport security with $500,000 stashed in his pants?
Ahearn suspects that Homm used his diplomatic passport from Liberia. Diplomatic passports are typically only issued to diplomats and consuls on official state business. According to Ahearn, they’re sold on the black market “for huge amounts of money.” With one of these passports in hand, he says, “you can go through customs and won’t get searched. So you can carry a bag of money with you, no problem. It’s the ultimate disappearing tool.”
Is there a common destination for wealthy people on the lam?
There are several. Homm chose Colombia. “If you’re in Colombia and you give $10,000 to the chief of police, you’re now the mayor,” says J.T. Mullen, a 77 year old private detective based in Manhattan. White-collar criminals also favor to Britain, Israel, Brazil, and Belgium. Canada has been especially popular for Chinese plutocrats with criminal records. Billionaire entrepreneur Lai Changxing, convicted of operating a $6 billion smuggling empire, and Gao Shan, a former Bank of China manager accused of embezzling $150 million, both spent years in Vancouver. James Stanley Eberhart—who allegedly stole $14 million in a telemarketing scam—opted for no country at all. Eberhart disappeared in 1999 before being arrested, a full decade later, in Malaysia aboard his boat named “Infinity.”
How long do these guys manage to stay off the radar for so long?
People aren’t really looking for them. “There’s a huge difference between Osama bin Laden and some financial fraudster, in terms of what effort the government is willing to make,” says Daniel Richman, a former federal prosecutor who teaches law at Columbia University. Financier Robert Vesco was accused of stealing $200 million from investors in the early 70s, and he bounced between Costa Rica to Cuba for more than 30 years before his death in 2007.
Have any of them tried faking their own death?
All the time. “Faking a death is the stupidest idea in the world,” says Ahearn. “It’s almost a cliché. In a weird sort of way, it’s an act of admission. They’re going to know you fled, they’re going to look for clues. Unless you leave a leg behind or an arm, they’re just not going to believe it.” In 2009, Indiana investment adviser Marcus Schrenker, accused of fraud, faked his death in a Florida plane crash after parachuting out in Alabama. He was busted by federal agents just a few days later at a Florida campground. Sam Israel III, a New York hedge fund manager sentenced to 20 years for defrauding $400 million from investors, abandoned his SUV on Bear Mountain Bridge in 2008, with “Suicide Is Painless” written in the dust on the hood. He turned himself in a month later.
What mistakes do financial fugitives make?
Trying to communicate with relatives. “Never call your family or close friends,” says Mullen. “That’s the first place we’ll look. If your mother’s birthday is July 1st, we’ll get her phone bill.” Rebecca Parrett, a former National Century Financial Enterprises Inc. executive who fled to Mexico in 2008 after being convicted of stealing $2.9 billion from investors, was discovered in 2011 after emailing her sister. Also, execs-on-the-run tend to get nabbed for another reason: hubris. “You get away with a huge amount of money, and you’re off the radar for five years, you start thinking that the world has forgotten about you,” says Ahearn. That’s certainly what happened to Homm, who’s a conspicuous 6 feet 7 inches tall and went to a Florence art gallery where he was likely to be recognized. “I mean come on, he wrote a book,” Ahearn says. “And then did interviews to promote it. That’s seriously cocky.” But sometimes, the reason why people like Homm get caught is simple boredom.
Boredom? How can they be bored if their rich and living like Bond villains?
Being rich means little when you’re hiding from the FBI. “If you’re a person of means and you’re used to doing things that make you happy, spending money, and buying things and being seen, the life of a fugitive will really cramp your style,” says Richman. “If you want to remain un-apprehended, you’re not going to be able to travel to the same degree. Huge parties are probably not a great idea.” If you can live quietly and not bother other people, he says, there’s a good chance you’ll remain undetected. “But that almost never happens,” laughs Richman.
