| Former OHL club owner ready to take his ‘lumps’ for Ponzi scheme | |
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| Apr 22, 2012 18:48 |   |
 | source. thestar.com For once, William Wise is doing the right thing. Admitting he fleeced millions of dollars from people who invested in his “rock ‘n’ roll” Caribbean bank, the former owner of an Ontario Hockey League team surrendered to U.S. authorities Monday night in San Francisco. The Cornwall, Ont., native is wanted on a 23-count indictment of conspiracy, mail and wire fraud, and money laundering in connection with an alleged $129.5 million Ponzi scheme in the U.S., where he lived for more than a decade. In an exclusive interview with the Star, Wise told his story, trying to explain how his life took so many wrong turns. “I always knew what was right to do, but I always chose the wrong thing, wrong path, because it was damn easy,” he says, invoking a variation on a quote from Al Pacino’s character in the 1992 movie Scent of a Woman. |
| Apr 22, 2012 18:49 | #1 |
| Wise agreed to an interview under the condition that publication be held until his plane landed in San Francisco from Toronto and he was taken into the custody of Federal Bureau of Investigation agents. He is scheduled to appear in court Tuesday morning. “I’m prepared to take my lumps,” he told the Star as he sat in the office of his Toronto lawyer, Daniel Brown, 11 days ago. “If I didn’t feel badly, I wouldn’t be doing what I’m doing. I’ve helped cause a lot of pain. Regardless of whether it was my intention or not, the result has been horrendous, horrific.” Wise — facing up to 27 years in prison — hopes his guilty plea and cooperation will help investors recover losses, estimated at $75 million. Some are suing other financial institutions for providing banking services to Millennium Bank, the ill-fated enterprise Wise launched in St. Vincent in the Grenadines in 1999. Wise says several banks recognized irregularities but did nothing. “The banks were absolutely complicit,” says Wise, who is a lawyer currently under suspension by Ontario’s law society. Most of the deceived, however, save their anger for Wise. For a measure, just punch Wise’s name into a search engine. (Sample: “Let him take a good look at himself and see what a rotten low-life coward he is for robbing the elderly, poor.”) |
| Apr 22, 2012 18:50 | #2 |
| Wise, 62, says that since his Millennium Bank imploded in 2009, he has taken a hard look at himself, though he has a tendency to recount events using “we” rather than “I.” And he still believes there was some justification for using investor money to fund a lavish lifestyle that included a private jet and pilots, an extensive wine collection, boats, luxury automobiles and cash to his wife and women whose affection could be bought. The receiver appointed by the Securities and Exchange Commission (SEC) estimates that between 2004 and 2009, Wise and associates were spending approximately $22.5 million a year on themselves. “We were living very well because we wanted to keep up appearances,” says Wise. “Because we were such a small bank, it was very important that people felt comfortable.” As “the face of the bank,” he says it was important to be living the life of a bank executive — “another money drain, but necessary to get new investors, right connections, a legitimate enterprise.” While the receiver has found “no indication any investment took place,” Wise insists some money was invested toward the development of a private resort on the Caribbean Island where the bank was based. That’s where a $500,000 wine collection came into play. “Those wines? Yes, I did drink some, I’m not going to say I didn’t, (but) it was going to be a showcase,” he says, meant to impress potential clients — “Oprah Winfrey, Michael Jordan” types. |
| Apr 22, 2012 18:51 | #3 |
| He accepts his ego was too big and while he once revelled in his fat-cat status, Wise says he now believes unrestrained materialism is “not right” nor is the overarching importance of money in today’s world. “We have to have the $100,000 car when the $30,000 or $40,000, which is still a nice car, or $50,000 car, will do. We have to have the best … whether it be a type of watch, or one karat, two karat, four karat, whatever it is, ring. It is our ego.” He’s also learned wealth and position can be hollow. “It was amazing how much more handsome I was when I had money, or how many more friends I had who weren’t really friends.” -- William James Wise was born Jan. 11, 1951 in Cornwall to a Russian-born mother and father who escaped Nazi Germany. An only child, Wise lived in a hotel owned by his hard-working parents, who later bought and ran several travel agencies. Wise did his undergraduate degree at Queen’s University in nearby Kingston and went to law school in Windsor. He was called to bar in 1979 and returned to Cornwall where he specialized in real estate law. An ardent hockey fan, Wise bought the OHL’s Cornwall Royals in the ‘80s, the same decade he married and had a son. He also served two terms as an alderman, yet it rankles him that he is remembered as a man “who moved the Royals out of Cornwall” to Newmarket. “In fact I probably should be remembered as the person who kept it there five years longer than anybody else would,” he says. After the Newmarket OHL team proved a dud, Wise, his wife Lynn and their son moved to Raleigh, N.C. Wise, who had experience “incorporating companies offshore, opening bank accounts, getting people credit cards,” decided to open his own bank in 1999. |
| Apr 22, 2012 18:53 | #4 |
| The private Millennium Bank was incorporated at a time when thousands of such offshore institutions existed, attracting customers keen to avoid taxes and maintain privacy. It was a “totally different era of regulations,” he says. “It was quite honestly rock ‘n’ roll.” After Sept. 11, regulations tightened up and the market for private banks “got worse,” Wise notes. “In hindsight, it would have been great time to just close. In hindsight, of course I wish I had.” Wise didn’t, he says, because he hoped to salvage investments made by some of his friends who had received his assurances their money was safe. “There were people who would have lost money and you’re trying to patch it, make it work.” The Federal Bureau of Investigation alleges Wise and Jacquline Hoegel — an American Canyon, Calif., resident described as “his second in command” — ran a scheme in which they marketed bogus certificates of deposit (CDs) to more than 1,200 people who invested $129.5 million. As of March 2009, when the SEC shut down the operations, CD purchasers had lost more than $75 million. Hoegel, who ran the Napa, Calif., office where most of the CD purchasers sent their funds, has pleaded not guilty. She has given interviews saying she knew nothing about what was going on. The indictment says the CDs were issued by three entities: Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust, all set up by Wise. “Extensive and fundamental misrepresentations,” appeared on the Millennium Bank’s website and in advertisements in luxury lifestyle magazines, a 2009 SEC news release says. |
| Apr 22, 2012 18:54 | #5 |
| Millennium was promoting returns of up to 16 per cent per year, according to the indictment. Wise disputes this, saying it only offered a rate of return a few points above other banks. “Just enough to attract business,” he says. He also says it wasn’t until the stock market crashed in 2008 that the “illegal” decision was made to “borrow money” for the purpose of shoring up the bank as a “short-term solution.” Wise and the U.S. authorities do agree on at least one thing: Investor funds were being used to make “Ponzi” or interest payments to earlier CD purchasers. “This is the part that’s horrible,” Wise admits. “This is where people did lose their money, OK, and this was … it just never should have been.” At the time, did this wrongdoing create anxiety or guilt? Wise thinks for a moment. He struggles to explain he wasn’t the one doing the actual selling, but doesn’t want it to sound like he’s blaming others. “I wasn’t dealing day to day with the people,” he says. “You lose sight of reality and lose touch. It’s just the reality. I wasn’t hearing the voices.” He says he was clinging to hope “you’re going to pull it out of the fire,” while believing “you don’t think you’re going to get caught.” -- But he did get caught. After the SEC filed an emergency action to halt the scheme in March 2009, Wise fled to Canada. “When this stuff hits you don’t know what to do. You’re sitting there, everything’s done, everything’s gone.” He disputes any suggestion he had been in hiding. “I’ve been relatively visible,” he says, living in the Toronto area — he won’t say where — under his own name. Wise says he contacted U.S. authorities immediately after the warrant for his arrest was issued in February. On Monday, the man who once rode on private jets was seated in the economy section of an Air Canada flight, the price of his ticket cobbled together. “He is dependent on the kindness of his friends to assist him even to just surrender himself,” says Brown. |
| Apr 22, 2012 18:55 | #6 |
| Wise will be represented by a public defender appointed to him by the U.S. government. He will not seek bail. And he’ll go into custody wearing the same dark business suit he wore during the interview, where he once had a closet full of custom-made suits. “I don’t have billions squirreled away,” he says. “I don’t have thousands squirreled away. I don’t even have hundreds of dollars squirreled away.” He refused to discuss the whereabouts of his wife and son, but they are believed to be in the GTA. The federal sentencing guidelines for this size and type of fraud recommend up to 27 years in prison. “But these guidelines are not mandatory and the judge may also consider Wise’s level of cooperation in his own and other prosecutions when considering his own final sentence,” Brown says. During the interview, Wise adopted a stoic stance about the potential of spending the rest of his life behind bars. “I guess I’m prepared to deal with that, and we’ll deal with that as it unfolds.” |
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