By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Norm, who has no love for his former employers, says the government nearly got him killed in Las Vegas during the Strickland drug probe -- and this was hardly acting.
Dressed in striped pajamas and sitting at his wobbly glass-topped dining table -- his pale skin, white hair, and white chin stubble all melting into a ghostly chowder -- Norm tells the story like this: "We're in Vegas at this one blackjack table, and it's me, these three drug dealers, and Greg [not his real name], this undercover IRS agent. He's wearing a Nagra, a wire, and we're down there talking about the deal. These guys are betting $5,000 a hand. All of a sudden, Greg gets up and says, 'I gotta go.' He leaves his jacket there with the recorder in it. I mean, what the fuck...I'm scared shitless. So I turn to these guys and say, 'That fucking Greg. Drinking again. I'll see you guys in a little while.' I take his jacket and I finally find Greg. He's back up in the room getting a head job from a hooker, snorting some of the cocaine that we're supposed to have tested."
IRS documents show Berger was paid $5,000 plus expenses for his work on the Strickland case, but he says there was more to it. There was side action. "I was allowed to keep my commissions," he says -- meaning the 10 percent fee he charged his targets while posing as a money-laundering hood. As irregular and unlawful as that would have been -- he would have become a true part of the criminal conspiracy he was investigating -- the amount of these "fees" was substantial. By his own sworn account, in his next operation he kept $28,000 from a single money-laundering transaction and gambled it away in an Atlantic City casino.
Given the way things ended up, Berger might have had commissions in mind when he hooked up with the "peso case," the government's undercover probe of a scam in the late '80s and early '90s that launched at least three generations of criminal cases and resulted in several convictions.
Masterminded by Tulsa con man Robert Leslie Johnson, the scam's Dallas link was William Wayne Gray, then a 43-year-old white-collar type from Grapevine. From his investment office in Las Colinas, Gray promised investors amazing returns -- 12 percent weekly -- in a scheme involving the trading of pesos bought at a discount. In reality, agents later testified, it was a straight Ponzi scheme in which money from new investors was used to pay off previous investors. There were no peso trades.
It is unclear just who contacted whom -- whether Berger went to the government first, or whether the government came to him. Webster, the prosecutor, says the IRS initiated Berger's involvement -- that he was acting from the very start.
Berger says he went to the feds after he invested some of his own money and immediately pulled it out for a quick profit. Then one of his associates in the clothing trade invested but didn't get a return, and Berger, playing the mobster, stepped in to retrieve the money. His initial target was Barry Lekavich, a broker who happened to have an office across the hall from Gray's, and who, perhaps seeing all the action at Gray's, jumped into business with him.
"I call this guy Lekavich and say I happen to be friends with these investors. I say, 'Look, don't bullshit me. There's no way this isn't a scam,'" Norm recalls. "'I want their money back tomorrow, and if you don't give it back, well, it's out of my hands.'"
Through Lekavich, Berger met Gray, who at the time had a pressing problem. Local authorities, pursuing a charge that Gray had violated state securities laws, had raided Gray's office, seized his bank accounts, and confiscated his cash assets, including $827,000 in small bills stuffed in a duffel bag in a closet at Gray's house.
Gray, however, had more than a million in uncashed cashier's checks and money orders, and he needed a way to cash them. Enter Berger, who came highly recommended by Lekavich after Berger took him on a trip to Atlantic City, cashed his checks, gambled with him, and, some government reports allege, set him up with a hooker. As Gray testified, Lekavich told him, "This guy is the greatest guy. You're not going to believe what he can do for you in Atlantic City...He can do all this stuff with your money."
Berger agreed with agents from the IRS criminal-investigation division and U.S. Customs to work the case -- with the aim of recovering what was thought to be tens of millions of missing investors' funds and making a federal case against Gray and his associates. "I can't tell you how many doctors, attorneys, judges, rich people fell for this deal," says Berger of the peso scam.
Berger arranged to meet Gray at the Denton airport for a meeting held in a private jet Berger had borrowed from a friend -- an impressive setting for a guy who boasted he could launder nearly any amount of money by sending it abroad and bringing it back through various companies, accounts, and loan arrangements.