The Grifter

Smooth-talking stockbroker Roger Turner came across as a good Christian man--one who made it his business to charm widows and retirees out of their life savings

On January 21, 1997, Crandall again confronted Turner, this time by taking his deposition. Under oath, Turner swore that he gave Bennet and Palfi personal promissory notes for their funds, always intending to pay them back in full. Of course, he was uncertain whether he had the original or could even find a copy. "I've done a terrible job of keeping track of lots of documents," he said.

Palfi adamantly denies Turner's claims: "I'm not stupid. I would have never taken a promissory note for every cent I had in the world."

None of this litigation, however, was enough to prevent Turner from snagging new business. That same January, he held an annual stockholders meeting for HealthTeamm, where he tapped his group of loyal investors to ante up more funds for the company. Of course, they had no clue that the company had filed for bankruptcy on November 28, 1996--and Turner didn't offer any. In April 1997 Turner and his wife sent out baby-shower invitations to some of the same clients who had sued him. At an emergency stockholders meeting in May, Turner told the assembled that there was a "woman lawyer in Dallas" bad-mouthing him and trying to destroy HealthTeamm.

Crandall realized that nothing short of arrest was going to prevent Turner from plying his trade. He was too good a salesman, too convincing a con man. Even at this late date, many still thought he would make them wealthy beyond their dreams.

On December 18, 1996, Crandall tried to bring the case to the attention of U.S. Attorney Paul Coggins by sending him a copy of the letter she wrote to the Texas Securities Board detailing Turner's activities. She says she never heard back from him. Only after she informed the HealthTeamm bankruptcy trustee that Turner was still raising money for the bankrupt corporation did the trustee contact the U.S. Attorney's Office. By the summer of 1997, the case had been assigned to assistant U.S. Attorney Len Senerote, who heads the special securities task force.

Yet Crandall reserves harsh criticism for the manner in which the U.S. Attorney's Office handled the Turner investigation. She claims her clients were made to feel as if they had done something wrong; that the task force barely lifted a finger to investigate Turner's wrongdoing thoroughly, much less check to see if he had hidden offshore accounts. And she struggles to understand why.

"The U.S. attorney and the others are not on the cutting edge of consumer protection," says Dallas attorney Mike O'Neill, whose client base consists of those who claim they were bilked by stockbrokers and brokerage houses. The feds, he says, "are heavily loaded and understaffed and somewhat cynical about whether the customer really got hurt."

O'Neill, who represents several of Turner's former clients against Royal Alliance, says that "the regulators aren't what protect the public. What protects the public is that it becomes unprofitable for the bad guy to continue."

There's also some saber rattling that goes on to get the feds' attention, says Todd Moore, the Dallas attorney who represented Abby Abernathy. "The garden-variety securities-fraud deal starts out with a handful of individuals who get bilked," explains Moore. But the dollar amounts, he says, aren't large enough to warrant the attention of regulators, whose limited resources are earmarked for the bigger players.

Moreover, the securities industry has trouble policing their own. A Republican Congress has slashed the SEC enforcement budget, and NASD--which acts as the watchdog over half a million stockbrokers--is funded by member brokerage firms and regulated by the SEC. An NASD spokesperson says only 10 percent of registered brokers even have a disciplinary history.

One Dallas stockbroker who declined to be identified says it is not uncommon for securities firms--even the ones with high-profile, "reputable" names--to "look the other way" when a hot-shot, high-revenue-producing broker pushes the envelope. "What do you hold out to the public except your knowledge that this is a good investment?" the broker asks rhetorically. "If not, then it's absolutely misrepresentation...Full disclosure is the core of securities regulation."

The SEC's regional director, Harold Degenhardt, says the answer is certainly not "tougher" regulations. For him, "fraud is fraud," and what is needed is a system that is better able to "handle the high volume of fraud that we are seeing."

Degenhardt believes that criminal penalties should be increased. "This white-collar, nonviolent crime" is perpetrated by criminals, he says. "They didn't use a gun, but sometimes their means are just as effective. You're still left with nothing afterward."

Assistant U.S. Attorney Senerote agrees that those who steal by deceit are not treated harshly by the justice system. "Look at the [sentencing] guidelines with respect to white-collar criminals--if they tell you nothing else, it's 'If you are going to steal anything, steal a lot,' because there's not a whole lot of difference in the punishment."

Jeanne Crandall says it's amazing that Turner was prosecuted at all. An incident in September '97 has her wondering just how seriously the government took the case.

The HealthTeamm bankruptcy trustee scheduled an auction at Turner's offices to sell whatever assets might be found there. Crandall decided to go, and when she arrived, she was stunned. Boxes of documents lay spilled across the floor; file cabinets were made ready for sale by emptying their contents into large trash bags. It was clear that these papers needed to be in an evidence room, not some garbage dump. Crandall saved what she could, but believes valuable evidence that could better establish Turner's paper trail had been lost. At the time, she cursed Senerote's name, wondering whether his task force really cared about all the damage Roger Turner had caused.

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