Crime Pays

How the Feds let S&L swindler Clifford Sinclair get away with millions

Earlier this year, Sinclair asked Judge Sanders to return the passport Sinclair had to surrender when he went to jail. In late August, attorney Bill Boyd picked up the passport on Sinclair's behalf.

Sinclair's troubles with the government are not completely over. A lawsuit filed by the FSLIC years ago to recover assets looted from Empire is still pending. But it has languished for years as the criminal prosecutions dragged on, and defense attorneys say Sinclair has probably succeeded in placing his fortune beyond the government's reach.

Danny Faulkner, meanwhile, is ruefully preparing to go to prison. Once one of Dallas' most visible testaments to self-made wealth, he is now a disgraced swindler.

He spends much of his time at an old heliport on Lake Ray Hubbard, the former seat of the Faulkner empire. Friends and former business associates--some of whom have already served time in prison--stop by to talk or play cards.

One of the two helicopter bays is jammed with file cabinets and shelves full of legal documents--the detritus of Faulkner's years-long battle with the government. There are boxes of bank statements, loan documents, investigative reports, and reams of other paperwork that accumulated as lawyers picked apart every facet of Faulkner and his family's finances.

The Jacuzzi and racquetball court are filling with cobwebs, the once-familiar Faulkner logo fading on the heliport's facade.

Last year, Faulkner filed for bankruptcy, attempting to stave off all the creditors--including federal banking regulators--who want what is left of his wealth.

Bunton has already ordered Faulkner to pay $40 million in restitution for his role in I-30. His bankruptcy filing indicates that he may not have that much money left.

According to that filing, Faulkner still owns more than 250 pieces of real estate, most of it in and around I-30. But after factoring in the judgments against him, Faulkner lists his net worth at minus $175 million.

Fearful of risking the wrath of Judge Bunton, before whom he must still appear, Faulkner is averse to discussing the details of his case.

He does allow that the past few years have been tough, hanging in the wind, never knowing when he might have to leave his family and report to jail.

Faulkner will not directly discuss Sinclair, but his former attorney will.
Mike Fawer offers just a few words.
"Sinclair pulled it off," he says. "He won.

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