by Val Ellicott
Staff Writer
Until his arrest last week, David Witter enjoyed
the unhurried life of a wealthy sportsman and entrepreneur who backed
his fledgling business ventures with an inherited slice of one of the
country's largest investment fortunes.
Witter lived with his wife in a $1.5 million home
in Lost Tree Village in North Palm Beach. Vacations tended to the
exotic-- from sea trout fishing in Tierra del Fuego to dove hunting
in Colombia.
Friends describe him as bright and imaginative with
a flair for marketing and a selfless, unassuming nature.
So why would Witter, a man worth an estimated $2
million and the grandson of the famous investment broker Dean Witter,
launder money for undercover agents posing as drug dealers?
"We were wondering that ourselves," said
a government source involved in the sting-- Operation Pinstripe--
that nabbed Witter, stockbroker Robert Kurlander and four other men.
The undercover agents put the question to
Kurlander, the man they say first approached them with an offer to
launder money.
"Kurlander said that David's a blueblood, that
he likes the excitement, " the government source said.
Those who know Witter are having trouble accepting
the government' s portrayal of him as the wily mastermind of a scheme
to shuffle cash -- ostensibly earned through drug deals-- through
banks in the Cayman Islands and Austria.
"It's beyond belief," said a close
friend, Palm Beach lawyer Homer Marshman Jr. "After reading the
government's affidavit, I just can' t believe it isn't exaggerated."
Several of Witter's friends offered in court to
pledge their cars, homes and jewelry toward his release bond. One
described him as " the most honest man I know."
But 16 hours of audio tapes and videotapes secretly
recorded by agents with the Palm Beach County Sheriff's Office and
the Internal Revenue Service during the sting tell a different story,
federal prosecutors say.
They say Witter, 43, not only set up the complex
money-laundering scheme but freely admitted that he has rendered such
services in the past.
"As much as I don't like getting into that
business, there are ways to do it," Witter is quoted as saying
in court documents. "I've done it before from New York for many years."
SCHEME OFTEN USED BY DRUG TRAFFICKERS
Witter also told undercover agents he used to own a
sailboat that he leased to drug smugglers. He told the agents that
"the return on the investment was unbelievable," according
to an IRS affidavit.
Federal agents described Witter's laundering plan
as one commonly used by narcotics traffickers to hide the origins of
their money:
Some of the agents' "drug money" was
deposited in the Cayman Islands, where it was later transferred to
the Vindobona Privat Bank in Austria. Some was moved to Vindobona
directly from the United States.
The other participants in the scheme, agents say,
were Kurlander, who works for Witter's company in Palm Beach Gardens;
Michael Margules, one of Vindobona's directors and owners; and James
Bineau, a courier responsible for delivering cash to the Caymans.
According to Witter's plan as outlined in court
records, the undercover agents would open bogus corporations in the
United States that would borrow the money from Vindobona. Witter then
would invest it.
In what federal agents described as an imaginative
twist, Margules and Witter also planned to mix the "drug
money" with Vindobona's cash, ship it to Hungary, deposit it
into Vindobona's account there, then transfer it back to Vindobona.
Such sophisticated planning was beyond Kurlander's
abilities but wasn' t difficult for the innovative Witter, government
sources said.
"Kurlander had the contacts; Witter had the
know-how," one said.
DEFENDANT `DOMINEERING, PERSUASIVE'
Testimony in court and information from a former
business associate paint Kurlander, 29, as an immature, ruthless
egoist who enjoyed a burst of financial success about six years ago,
then lost everything he had made. His father loaned him the money he
needed to cover his debts.
"He's very domineering and very
persuasive," said the former business associate, who asked to
remain anonymous. "He goes for the jugular. He's a tough kid."
Kurlander, who was released on bond Friday, is so
hard-pressed financially that he receives his commission checks from
Huntington, Witter and Co. only after company officials pay his
utility bills, mortgage and car payment, according to his attorney,
Tony Natale.
"They found that was the best way to ensure he
would have a place to live and a car to drive," Natale told U.S.
Magistrate Ann Vitunac at Kurlander's bond hearing Friday. "Mr.
Kurlander has not always attended very well to the fine details of life."
Both Witter and Kurlander are free on bond. They
are scheduled for arraignment March 13.
Witter also ran into financial problems 11 years
ago, long before inheriting his piece of the Dean Witter family
fortune, business records show. In 1981, he filed for personal
bankruptcy after the cosmetics company where he was vice president,
Isadora Group Ltd., went out of business. He was granted a discharge
from the company's debts the same year.
MONEY-LAUNDERING IN FORT LAUDERDALE
Two years ago, Witter joined Huntington, Witter and
Co. as executive vice president. He is now president after a
reorganization. Witter also is branch manager for Network 1 Financial
Securities Inc., the company he uses to purchase stocks for clients.
He offers investment advice on "It's Your
Money" on WSBR-AM radio in Boca Raton. Witter said he pays the
station about $3,500 a month for the exposure the show provides him.
Huntington, Witter has been losing $3,000 to $5,000
a month during its start-up period, Witter said in court last week.
But he said one of the company's divisions turned a profit last month
for the first time.
"I believe that every one of the divisions is
on the verge of making a tremendous amount of money," he said.
Witter also is charged in a separate but related
case with attempting to launder $1 million through a pawn shop
business in Fort Lauderdale owned by John Levitan. The money was to
be loaned to the business, then returned to the undercover agents in
the form of phony salaries, according to a federal affidavit.
A grand jury has not issued indictments in either
case. A preliminary criminal complaint charges Witter and Kurlander
with one count of conspiracy and four counts of money-laundering. A
second complaint charges Witter with one count of attempted money-laundering.
Witter worried about being caught from the first
time he met with the "drug dealers," court documents say.
He told them at one point that he "couldn't be near the
cash" because of his family name and the importance of
protecting his businesses.
Later, he said that he had discussed what he was
doing with his psychic and that "he was very nervous."
And he admitted to the undercover agents that it
made little sense for him to risk his career and family name for what
amounted, at least initially, to $22,000 in money-laundering fees, a
government source said.
"He expressed it as risk-reward," the
source said. "David said the reward wasn't commensurate with the risk."
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