shelter department, Darr met Barry Trupin, a prominent and flashy shelter promoter. Trupin left some Wall Street professionals uneasyâhis style was a bit too garish, his wealth too prominent. Here was a man who could purchase the old Henry du Pont estate in the wealthy enclave of Southampton, New York, and then undertake a multimillion-dollar effort to transform the Georgian Chestertown house into a French Gothic castleâcomplete with turrets, towers, and an indoor saltwater pool with its own twenty-foot waterfall.
Trupin loved to give people the impression that he was a financier of high pedigreeâhe named his company Rothchild Reserve International, making more than a few investors think that it was tied somehow to the Rothschild family, the famous European banking dynasty. Trupin made sure he spelled the name just differently enoughâleaving out one
s
âthat the real Rothschilds would never bring suit. Even his deals pushed the outer edge of the envelope. The values he ascribed to the assets in his tax shelters always seemed enormous, which, in turn, gave investors even greater tax deductions. But it also would likely attract the attention of the Internal Revenue Service, which could disallow any deductions if the agency found the numbers had been puffed up. 1
Trupin fascinated Darr. He was one of the wealthiest men Darr ever knew. They met as competitors over a big computer-lease tax shelter deal that both wanted to sell. In the end, Darr was the victor, but Trupin felt no ill will. He knew that someday he might want to use the fellow who just beat him for another deal.
That day came in mid-1977. Trupin had learned that Mattel, the toy-making company, wanted to lease a large IBM mainframe computer. Trupin asked Darr if Merrill could help him find the equipment for the deal.
Darr agreed, but on two conditions: first, that Trupin pay $50,000 to Darr personally for finding the equipment, and second, that Merrill be told nothing about the payment. The $50,000 would be a small fraction of what Trupin stood to gain in fees if the deal went through. He readily agreed to both conditions.
For Darr, the chance was slim that anyone at Merrill would ever find out about the moneyâhe had been interviewing for a new job at Josephthal and had an offer in his back pocket. By the time Trupin cut the check, Darr would be out the door. The deal was done in June, and for its work, Merrill Lynch received a 2 percent finderâs fee: $11,322âless than a quarter of the cash paid under the table to one of its midlevel employees.
Darr bundled his overcoat tightly around himself as he walked down Broadway. It was January 30, 1978, a bitterly cold Monday in what was already an extremely frigid New York winter. About a block ahead, he could see Trinity Church, which had stood since colonial times like a sentry at the mouth of the downtown financial district. Darr turned onto Wall Street. It was about 3:00 P.M. In an hour, the markets would close and the street would be packed as brokers and traders headed home.
He walked past the thick, gray walls of the New York Stock Exchange and the columns of Federal Hall, where George Washington had once taken the presidential oath of office. He continued for two blocks until he arrived at 45 Wall Street, the offices of the United States Trust Company.
Darr waited for a teller. Finally, at 3:16 P.M., he passed two deposit slips through the tellerâs window, along with a check he had just received for $50,000. It was the personal payment he had demanded from Trupin for helping him on the Mattel deal. Trupin had successfully sold out the partnership in December, as wealthy investors scooped up shelter deals to help cut their tax liability for the year. True to his word, Trupin wrote Darr the check within weeks.
The teller took the documents from Darr and placed them in an electronic time stamper. Following Darrâs written instructions, $45,000 was deposited into
Trupin loved to give people the impression that he was a financier of high pedigreeâhe named his company Rothchild Reserve International, making more than a few investors think that it was tied somehow to the Rothschild family, the famous European banking dynasty. Trupin made sure he spelled the name just differently enoughâleaving out one
s
âthat the real Rothschilds would never bring suit. Even his deals pushed the outer edge of the envelope. The values he ascribed to the assets in his tax shelters always seemed enormous, which, in turn, gave investors even greater tax deductions. But it also would likely attract the attention of the Internal Revenue Service, which could disallow any deductions if the agency found the numbers had been puffed up. 1
Trupin fascinated Darr. He was one of the wealthiest men Darr ever knew. They met as competitors over a big computer-lease tax shelter deal that both wanted to sell. In the end, Darr was the victor, but Trupin felt no ill will. He knew that someday he might want to use the fellow who just beat him for another deal.
That day came in mid-1977. Trupin had learned that Mattel, the toy-making company, wanted to lease a large IBM mainframe computer. Trupin asked Darr if Merrill could help him find the equipment for the deal.
Darr agreed, but on two conditions: first, that Trupin pay $50,000 to Darr personally for finding the equipment, and second, that Merrill be told nothing about the payment. The $50,000 would be a small fraction of what Trupin stood to gain in fees if the deal went through. He readily agreed to both conditions.
For Darr, the chance was slim that anyone at Merrill would ever find out about the moneyâhe had been interviewing for a new job at Josephthal and had an offer in his back pocket. By the time Trupin cut the check, Darr would be out the door. The deal was done in June, and for its work, Merrill Lynch received a 2 percent finderâs fee: $11,322âless than a quarter of the cash paid under the table to one of its midlevel employees.
Darr bundled his overcoat tightly around himself as he walked down Broadway. It was January 30, 1978, a bitterly cold Monday in what was already an extremely frigid New York winter. About a block ahead, he could see Trinity Church, which had stood since colonial times like a sentry at the mouth of the downtown financial district. Darr turned onto Wall Street. It was about 3:00 P.M. In an hour, the markets would close and the street would be packed as brokers and traders headed home.
He walked past the thick, gray walls of the New York Stock Exchange and the columns of Federal Hall, where George Washington had once taken the presidential oath of office. He continued for two blocks until he arrived at 45 Wall Street, the offices of the United States Trust Company.
Darr waited for a teller. Finally, at 3:16 P.M., he passed two deposit slips through the tellerâs window, along with a check he had just received for $50,000. It was the personal payment he had demanded from Trupin for helping him on the Mattel deal. Trupin had successfully sold out the partnership in December, as wealthy investors scooped up shelter deals to help cut their tax liability for the year. True to his word, Trupin wrote Darr the check within weeks.
The teller took the documents from Darr and placed them in an electronic time stamper. Following Darrâs written instructions, $45,000 was deposited into
Similar Books
