SOMEWHERE IN THE STATE OF SONORA, MEXICO--As night falls, Gary Reeder rips through his motel room, hurriedly stuffing clothes into a small suitcase. After three days in this hellhole of a town somewhere in Mexico's Sonoran Desert, Reeder looks frantic. Crazed. Downright scared. "I'm leaving tonight," he says, spotting me at his open door.
With or without me, he's outta here. And it's not because of his diarrhea. It's not because of this fleabag motel, where my room features claustrophobic low ceilings, cold showers, and a bloodstained sheet.
No, he's frantic because he knows I've seen and heard too much. He's scared because he no longer trusts his partner in this wild gold-mining scheme, a mysterious Nigerian man named Kenneth Azuka. He's leaving because he's going to cut him out of the deal, and he doesn't know what Kenneth will do to us.
"How fast can you get ready?" Reeder asks, charitably saying that he won't abandon me here, not if I'm packed in the next few minutes.
When I arrived here two days ago with Reeder, Kenneth, and a pair of would-be investors in this squalid city of 100,000, Reeder insisted that I not reveal where I was, ever. He pulled out a legal document requiring me to keep secret the location of these supposed gold mines, which, he said, would yield fantastically lucrative treasure worth tens of billions of dollars. I was told that I couldn't see the mines, not until I signed that paper. I tried to avoid it, even offered to go blindfolded. But now that I've signed it, now that I've seen two mine shafts, both of which appear to be abandoned, dusty relics, I am allowed to reveal only this: We're in Mexico, somewhere in the state of Sonora. And Reeder--a dreamer, a salesman, a six-time felon--is losing it.
One of the investors stops by the door, sees what's going on, tries to convince Reeder not to bail.
"I don't need him," says Reeder, referring to Kenneth, the man with the malevolent stare who has supposedly lined up concessions to seven Mexican gold mines. "He needs me. He's impossible."
"Well, that makes two of you," says the investor, a short, stocky man of 46 who will allow himself to be identified only as David from Oklahoma.
Reeder's not about to lash out at David; he needs his money and his confidence to keep other potential investors in line. Plus, he's not through fuming over Kenneth. Either the Nigerian is a "government snitch," or he's just messing with me on his own, Reeder says.
In this moment of weakness, Reeder suddenly spills his guts, admits that Kenneth has the rights to only one mine. "You can buy them on every corner," says Reeder. "He can stop me from getting across the border."
"He wouldn't do that," David says.
"Bullshit," shouts Reeder, and storms out the door.
It was greed that brought us this far.
Greed, and a paper-thin veneer of altruism, the latter of which 54-year-old Gary Reeder emphasized to me when I first met the aspiring tycoon in early September.
Reeder had called the Dallas Observer, saying that the media, in particular the Fort Worth Star-Telegram and KXAS-Channel 5, had wronged him, that they were nothing more than mouthpieces for the U.S. government. He said he wanted to set the record straight about his past.
When he came to the Observer's office, this graying, mustached man wore an immaculate suit and tie, which was offset by a brace worn around his neck because of a recent car wreck. He carried in his hand something that looked like a football. It was, he explained, a watering device for plants that his new business partner, a Nigerian, had introduced him to.
Reeder said that the Securities and Exchange Commission had gotten his business all wrong when it accused him last year of running an illegal pyramid scheme and bilking hundreds of investors around the country of $11.7 million during an 11-month span. The U.S. government chose Thanksgiving eve of 1999 to seize Reeder's numerous companies and cars and bank accounts, as well as gold, silver, and platinum coins and $25,000 worth of tacky artwork, some of which had adorned Reeder's Fort Worth home.
With his ringed fingers, Reeder, smelling wonderfully clean and fragrant, pulled out a pen and scribbled on a sheet some amateur physics about "water and potential energy." In a like manner, he said, he had been selling $300 gold coins for $10,000, then using the remaining money to fund his 27 businesses, creating potential energy. That energy, he said, could ultimately free the world of poverty. Not to mention make Reeder and his investors obscenely rich.
He then wrote out the numbers "666." The government, he said, was just that: the Beast, the biblical Antichrist. If ever there was a pyramid scheme, he said, in which old investors are paid with the money obtained from ever-multiplying layers of new investors, just look at the government's idea of Social Security.
He had a point.
Reeder's plan to create wealth, however, was different. What is 666 when it's flipped upside down? he asked, and wrote the answer himself: 999. Then he adorned the circle in each "9" with a smiley face.
With his neck brace on, and with scars on his forehead from the screws that had been drilled into his skull to keep his broken neck stationary, Reeder looked vulnerable, even sweet. He seemed like a gentle soul, a true believer. Here was a man who spoke worshipfully about his wife, who he said had worn out several Bibles just by reading them so much, and who writes letters to Jesus. "I know that sounds crazy," he said, humbly, softly, and, in turns, spoke ruefully about how the government had wronged not just him, but hundreds of investors, who'd recovered only 48 percent of their investment money after the seizure.
Was Reeder a genius, a mystic, an idiot, a con man? I couldn't tell. Nor did I have any inkling then about the extent of his criminal record.
Reeder soon saw me as a sympathetic soul, an "Old Covenant heroine," he would say later, after learning that I'm a Jew. In our next talk, he confided that he "just never seemed to fit in anywhere. I wanted to be the Messiah," he said, "but I knew that I was worthless." After all of his life's misfortunes--two failed marriages, more than a decade in prison, six or seven suicide attempts--he wanted to be somebody.
He wanted to save the world.
Soon I learned he was planning a last-minute trip to Mexico to inspect some gold mines. This venture was supposed to be his chance to redeem himself after all the ignominy following the federal raid. Now, Reeder said that he was on to something wholly legitimate (not that he wasn't before), that his partner had concessions to seven mines, that all that was needed to start the project was a mere $2 million.
I asked him why this trip was planned so quickly. "So no one would have time to prepare some defensive move against me," he said later, "the SEC, FBI, IRS." And he agreed to let me accompany him.
In the days ahead, I would learn a lot more about Gary Reeder's strange quest for redemption. And if this was the Messiah, I concluded, I'd better hold my ticket to the glory train.
For old time's sake, Reeder wants to hear it again.
"Hey Bill," he says, driving along the Arizona highway into Mexico with his three companions, "do that impersonation from Treasure of Sierra Madre."
Bill, a 70-year-old retired businessman from North Dallas--bald and a John Glenn look-alike--heartily obliges. "Badges?" he says, affecting a chintzy Mexican accent, "we don't need no stinkin' badges."
Reeder loves that routine, reminding him of the old movie: a weathered Walter Huston roughing it out in the desert for buried treasure. Even with the neck brace he's wearing, Reeder bobs up and down, flashing his horse teeth, convulsing with laughter behind the wheel of his silver Ford truck.
With the bright orange moon and silhouetted mountains far off, Reeder isn't tired, just eager to begin anew.
The U.S. government, he says, is the corruptor of all things innocent. Wen Ho Lee, Waco, JFK. Need he say more to prove that the red, white, and blue flag conceals a land scattered with victims?
"This whole country's a joke," says Reeder in his Southern, nasal twang. "America," he sighs, "the richest country in the world that has more poverty than anywhere else on the planet."
The poor and disenfranchised aside, the government sure hasn't helped Reeder's bank account any, having seized nearly everything he owned: the $330,000 home he and his wife shared, the six Corvettes. Even his golf clubs.
A year after that ill-fated raid, Reeder--the son of a Bible salesman who grew up in Weatherford, just west of Fort Worth--is shaken but not defeated, largely because the government is taking its sweet time in bringing criminal charges against him.
By now the SEC's civil suit against him has been settled, and his company, Cornerstone, is dead, on paper anyway. But in the capitalist candyland of America, Reeder is still feeding his appetite with some new, equally questionable businesses. He has a strange Web site, OperationJericho.com, which he is fashioning as an online newspaper, calling it the National Times. As its "Editor and Chief," Reeder cuts right to the chase, accusing the SEC of "perjury, spoliation of evidence, theft, and attempted murder." He claims he has sold 200 subscriptions at an exorbitant $398 apiece.
Reeder has new names for his business, but he's still selling the same old Cornerstone dreams: Stick with me, and I'll make you filthy rich.
With Cornerstone, those promises proved too good to be true. Reeder's bookkeeper stated in a sworn affidavit that Reeder had no real business operations and that investors were being paid with money from new investors. The government agreed and accused Reeder of falsely representing to investors that their funds were used in Cornerstone's various profit-generating activities. In sum, they said, Cornerstone was nothing but a pyramid, or Ponzi, scheme.
A year later, Reeder is asserting that Cornerstone was "one pure deal," as upright as Christ, that Reeder himself was a good Samaritan doing his best to fulfill his clients' caviar wishes and champagne dreams.
Reeder is quick to point out his good deeds while Cornerstone was thriving, such as hosting a charity golf tournament to benefit a Wedgwood Baptist shooting victim and a girl born without hands and legs. He had read about the girl in the Star-Telegram and says he promptly gave her family $10,500. He also offered the 12-year-old a position as Cornerstone's public relations director, a role in which he envisioned her writing inspiring messages to clients. But the feds' raid changed all that.
Now, if anyone is the crook, says Reeder, it is Uncle Sam.
As he drives on, he finds a sympathetic ear among those packed in his truck.
"Once you have this kind of experience with the government," says David, a nursing home-care administrator from Oklahoma who lost $6,000 in Cornerstone, "it's not mom, apple pie, and hot dogs anymore." He was Reeder's main supporter after the raid, so much so that he made seven trips down to Dallas, including one to picket outside the courthouse while the SEC brought its civil suit against Reeder.
Just weeks before the Mexico trip, Reeder had sent out letters to some 20 old clients. Like many a salesman, Reeder wasn't above stretching the truth, saying that his latest venture was already under way, that he was mining metals and importing them into America, that he had concessions to seven mines.
"Haste makes waste," he wrote clients, telling these eager, particularly elderly ears that gold, silver, platinum, and more were embedded in the pristine mountains of Mexico, that if they gave him about $3,000, they'd get awesome returns: $4,480, to be exact. On second thought, $18,500. No, make that $60,000.
"You know," he says now, "there's more precious metals in Mexico than there is in the United States. We've got gold down here, stuff that's worth $20,000 a gram, but that's not even the tip of the iceberg."
It was around 11 p.m. when we reached the Mexican border, only to be turned away because Reeder couldn't enter without the title to his truck.
After putting up a fight--trying to call his wife, but being unable to reach her--Reeder was testy. Kenneth reacted by grating his teeth, rolling his eyes, anything to keep himself in check. That night, a dejected Reeder drove us back to Tucson, to the Baymont Inn.
Early the next morning at breakfast, Reeder told Kenneth that he had a vision last night in which God told him this trip would be successful. Kenneth simply nodded.
Soon, we rounded ourselves up into two vehicles: Reeder's truck, and a car he'd rented that morning. We were ready; Sandra Reeder had pulled through for her husband, faxed the necessary papers.
I rode alone with Gary, and he told me about his brief history with Kenneth: He had found him through an ad Kenneth had run for building computers. When they met, he told Reeder that he had once run a coal mine in Nigeria with 450 employees, and that now he had concessions to mines in Mexico, where he'd been pursuing his gold-mining dream for 10 years.
Kenneth, Reeder said, came from a religious family and went to a Catholic seminary for two years to become a priest, only to quit and break his mother's heart. "He had a different ambition," said Reeder. "To make a billion dollars by 40.
"He's 43 now, and he's gone through a lot," he added. "He's black. He's from Nigeria. Nigerians have been known to be con men and rip-off artists."
Right now, he senses that Kenneth shares the same dream "to help people."
For Reeder, that dream has been a long time in the making. He spoke of his childhood in Weatherford, how he grew up as one of five children. He was an active child; he rode bulls, boxed, raced motorcycles. Then, through no fault of his own--Reeder describes all of his life's misfortunes that way--he landed in jail in 1973.
"I ended up going to prison without a criminal record or anything," he says. "My mother got killed in a tornado, my baby sister ended up going to an orphanage, my brothers went their separate directions, I lost my wife and children. My wife divorced me. She was my high-school sweetheart; we were married for seven years..."
After all the heartache, Reeder says, it wasn't a coincidence that he met Kenneth. "It couldn't be," he says. "Before I met Kenneth, I was looking at gold mining."
And, if anything, last night's vision assured him that he was on to something godly. "The main thing I thought is that God's in charge of this entire endeavor," he says. He had even scribbled down God's message to him on the one scrap of paper he could find, a Baymont Inn brochure. He now gave it to me to read. "I have entrusted you with a great position of leadership," it read.
It's not the first time, he says, that he's had strange visions.
Take 1987, for example. "I had this dream one time, lucid state," he says. "Two guys were talking, and one said three words...I'll use another word in place of one. He said, 'Screw all that.' He didn't use 'screw,' he used the other word--the 'f' word."
In the dream, Reeder saw a girl in a plaid dress. Near her were a bull's-eye and a huge crowd. Just like that, Reeder says, snapping his fingers, he realized the meaning of the dream.
The girl, it turned out, was someone he knew at 9, when his friend Ricky asked him if he wanted to go behind a grapevine patch with the girl and fool around. "Yeah, fool around fool around," Reeder says to me.
Now this lass was no beauty. By adorning the homely girl in a wholesome plaid dress in his dream, "I made the girl better than she was," Reeder says. "I added value."
He enhanced her, he ennobled her, even though he and his friend had, in fact, used her.
This dream, mind you, was a few years before Reeder thought of adding value in another way, with something he'd soon call Cornerstone.
Psychology, he says, fascinates him.
Why? I ask.
"You understand flaws in yourself," he says.
When I ask him which of his flaws he needs to understand better, he falls silent, then finally speaks: "Let me think about that for a while before I answer. That's kind of sensitive." His thoughts instantly turn to his wife, Sandra, and the fact that her name means "Helper of Mankind."
"Oh, Sandra," he says, sighing. "She's just incredible." I soon learn that he's been struck by pangs of guilt. He told me that months before the seizure, the pressures of running a business became so great that he went to a topless club one night and met a dancer. They began spending time together. "And everyone thought that I was this righteous man," says Reeder, softly, "but here I was with a topless dancer, smoking pot...I had a criminal record."
Sometimes, the temptations at Cornerstone were just too great. "There was quite a bit of money," he says. "I could have paid myself $20,000, $30,000 a week, and it wouldn't have hurt the company a bit. Not a bit."
He had tried to keep his temptations in check, paying himself only $110,000 a year, while his wife took in $10,000. He also tried "prayer. Sandra. You know, my conscience, my self-control, and sometimes I just lost it...There was a lot of guilt there. And to try to deal with the pain, alcohol became a problem."
He says he never consummated the relationship with the dancer. "But you set standards for yourself," he says. "One person can live with all kinds of junk in their life and not feel any guilt. Another person can't live with a scratch."
By his own admission, Reeder's that rare, introspective soul who has spent his life "examining the details of what is real and what is not." How many others, he asks, have read 3,000 books and, as he puts it, pursued life as thoroughly as Herman Hesse's Siddhartha?
After our Mexico trip, I would speak to Reeder's son, the only one of his family members whom I contacted who was willing to talk about Reeder.
Did he ever get the feeling that Reeder was unusual? "Very much so," said Chris Nowell, sitting in his office at a video production company, which he declined to name. Like his brother and sister, Nowell has been estranged from Reeder most of his life and has taken the last name of a stepfather, his real "Dad."
"Believe it or not," he said, "I really don't know him really, really well."
That's because while Nowell and his siblings were growing up, his father spent most of those years behind bars.
Reeder spent a decade in jail for a variety of crimes and misdemeanors, which included auto theft, burglary, forgery, writing bad checks, and brandishing a knife at his second of three wives in the late 1980s. And he was due in court for a DWI charge.
"It's almost like when you meet a genius they don't make sense to you," said Nowell. "Either they're an idiot or they're a genius. I don't know," he said, getting back to the matter at hand: Reeder.
When pressed to elaborate, he pleaded ignorance.
"Honestly, I don't know," he said, sounding befuddled, "because he's so..."
"I mean," I interjected, "you wouldn't call him an..."
"...An idiot." Nowell laughed awkwardly. "No, I wouldn't. I wouldn't, but I really don't know."
It turns out that Reeder left prison only a decade ago. Homeless for several months, he took a job doing sheetrock for a church in Fort Worth. There he met a divorced mother of two named Sandra Marks who had recently lost her clothing warehouse and had taken an office in the church to tide her over.
"Sandra was like the cheerleader for the church," says Reeder. "She wore cowboy hats and boots, she'd come in clapping her hands and said 'hallelujah,' this little shy lady. One morning she wasn't there, and this guy said, 'We can't start church without Sandra.' That really made an impression on me."
One Saturday, three weeks before they married in 1993, Reeder had a brilliant idea for a business: selling wares at inflated prices. He soon anointed himself the "father of value-added economics" and found a biblical name for his venture: Cornerstone.
For years, the idea languished while he worked a variety of jobs: selling law books, even self-publishing a book on telemarketing. By 1997, Reeder thought the time was right to start up the business, a "network marketing practice."
He placed an ad in USA Today and sent out mass mailings all over the country, saying that he had a "resource management company" that would give two profit-sharing checks a month to every client. Those interested called an 800 number, learning that they would have to give a minimum of $450 to reap the rewards.
It wasn't long before tens, then hundreds of thousands of dollars poured into that company and others from clients across America, including Brooklyn, where Orthodox Jews eventually opened a Cornerstone office, and as far away as England. The money, soon reaching into the millions, afforded Reeder the chance to open a plush office space with 8,500 square feet and 30 employees.
Customers were told that they would garner extraordinary returns, 40 cents on the dollar in four months, while buying products--from golf putters to motor oil to coins to nutritional supplements--at enormously inflated prices. Profits, Reeder said, were generated by 26 other companies he claimed to own. Among them was American-General Motors, Inc., which consisted of six Corvettes that Reeder had bought with clients' money. Customizing the cars with gadgets from phones to fax machines, he concocted a fancy-sounding name--Baroniche--and planned on selling the Corvettes at $160,000, not their usual price of $45,000. Another "company" was American Fashion International. In advertising that company, Reeder, ever the salesman, showcased one of his wife's creations--a long skirt, cowboy hat, and boots--and said it was so stellar that it had "almost been featured" in the Neiman Marcus Christmas catalog.
With $300,000 of his clients' money, Reeder even wrote and produced his own play at Fort Worth's Scott Theatre about a do-gooder, Jamie Shakespeare, a character clearly styled after himself. Shakespeare 2000 was rightly panned in the local press, and remains little more than a two-hour, mind-numbing oddity with wretched choreography. "Why Reeder chose Jamie, arguably the wimpiest male name ever, is anybody's guess," wrote Star-Telegram reviewer Mark Lowry.
Reeder, by virtue of being married to a woman whose father was Jewish, claims to be a Messianic Jew and sometimes goes by the biblical-sounding name of Gary Dean benKeith Reeder. (His father, after all, always told him not to think "puddle-minded.") Most Friday nights, he ushers in the Jewish Sabbath with an informal get-together at his home--the House of Reeder, as he calls it--that attracts mostly elderly clients who gave and lost their money in the Cornerstone debacle.
But the House of Reeder isn't just some makeshift congregation, he says. It's also his business. They are one and the same, and his business answers to a higher authority: God, not the SEC.
After several hours on the road, we arrived at the El Camino, a fleabag motel in the Mexican state of Sonora. Soon, we went to its restaurant. There, Kenneth, tensely fluttering his eyelids, said that he didn't like the idea of having a reporter tag along. Reeder produced the contract, the one that required me to keep silent about our location.
You never know, Reeder said. The SEC could botch his plans. But another condition arose during a lengthy negotiation. Kenneth insisted, absolutely insisted, that I not print his last name, that only his first and middle names, Kenneth Azuka, be disclosed.
The next day, our top-secret excursion to the mines began. Reeder and I took his Ford truck, and Kenneth, with Reeder's money, hired three Mexican men for the day to ride along in their old red truck as a backup. Bill and David rode with Kenneth in a rented car.
Along the way, Reeder spoke again of his past, the time in prison when he was determined to fast for 40 days, until--by the 35th day--the hunger proved too much, and he ate a Mrs. Baird's pastry.
"I always fail myself," he said. "For years, people have called me things that I didn't understand, like when I was young, they'd call me a genius, my friends. And I couldn't understand that. Just didn't make any sense to me. I hated school, made horrible grades, and still they called me a genius."
Now that we were far from the city, desert surrounded us, as did sand, cactus, shrubs, mountains. Driving along, I asked whether he saw gold out there.
"Gold?" he said. "That's just a small part of it. You know what gold is? It's glitter," he said, grinning and spreading his hands as if there were a marquee before him. "It's neon. It gets people excited."
In his plush, air-conditioned truck, Reeder drove slowly, especially after Kenneth's car got stuck in the sand and the two investors climbed in with us.
"How do you say 'cowboy' in Spanish?" asked Reeder. "Isn't it 'muchacho'?"
"No, I think it's 'caballero,'" said David.
As David whistled a Baptist tune, "Lighten the Corner Where You Are," Reeder told of his vision for a resort right here in this wasteland, a vision of golf courses, airports, tourists, a Mexican Vegas.
If these ideas seemed too lofty, too far-fetched, neither David nor Bill voiced doubts. Bill simply nodded his head, voiced an "um-hmm."
"It takes a village, like Hillary says," said David solemnly, all the while chomping on a toothpick hanging from his mouth.
Now that we were miles from nowhere, Reeder addressed one of my questions: If this gold-mining project is so good, why hasn't it been done before?
"Do I have to say another word?" said Reeder, traversing bumpy dirt roads.
David sighed heavily. "Uh, we've got to get it going so we can reap some reward off it."
"We're reaping rewards," said Reeder, "you just haven't seen 'em. The pictures that I'm bringing back from this, the stuff that I'm gonna publish on the Web site, letters that I'm gonna be writing people...I'm going to have them so excited...all the Cornerstone people'll be jumping bushes," he said, laughing.
Reeder said to David, "Your wife said, 'What does Gary Reeder know about minin'? It doesn't make any difference if I know anything about mining or not, I can always find somebody who does. All I gotta do is raise the money to make it happen, and people'll be happy."
We soon reached a mountainside. Walking up a steep incline, we saw a hole in the side of a mountain, pointing to some mining that might have been done years ago. There was nothing to indicate this was anything more than an abandoned mine.
Kenneth hiked up the path, sweat trickling down his brow. Wearing a Hightower Auto Wash shirt (he was once a manager at the Fort Worth store), he lifted a rock. "See this here," he said of the multicolored piece. "Gold is black, copper is green. See the color?" He lifted his hand, swooped it in a half-circle around the surrounding mountains. "You see the vein, as it continues?"
Bill nodded, listened attentively.
Kenneth said to start the project, they would have to drill and use a dynamite blast to bring the mountain down. There were 50,000 tons of ore here, he said. "This is very rich in gold," he said, standing in front of a cave that smelled of urine. "And this is just one of them."
"Yeah, bring it all down," said Bill softly.
Reeder now came up the path, sweaty and panting. "The silver's all through here," he said, sounding as if he were an expert. "It's everywhere. But gold, too."
I stood at the edge of a cliff with David and asked whether he believes this project is for real.
"Yeah," he said in a hushed, solemn tone. "That's what they say...Just Kenneth's knowledge of mining and knowing how long that he's been into this project, and it all makes sense...He wouldn't spend 10 years of his life if there wasn't something to it."
Later, we gathered around a hut on top of the mountain. Reeder sat in a chair and looked out at the expanse of desert.
"Do you have to have an environmental study out here?" he asked Kenneth.
"Uh, environmental..." said Kenneth. "The good thing out here, the permit is easy because there's no people."
"I can have a million dollars in three weeks," said Reeder.
"Well, in that case, we can start producing in less than four weeks," Kenneth said without a pause.
On the way back, I rode with Kenneth in the red truck, asked him a bit about himself. He said there was a legitimate reason the mine we just visited wasn't in use. "Until 1986," he said, "the large mining companies, they stopped buying from independent small miners because they don't have a place to sell their ore, and they don't have the sophistication to set up their own processing plant, and that's what we're trying to do." He said that a family owned the mine we had just visited, that he was negotiating a price. For how much, he wouldn't say. "Well, I'd buy it for a penny if I could," he said, laughing.
Along the way, we stopped near a ranch. Reeder got out of his car, saying he needed to use the bathroom. "You can go over there," said Kenneth, pointing to a patch of shrubs and trees. The idea didn't sit well with Reeder. "No," said Reeder, sneering, "I need to sit and be comfortable."
We were supposed to visit one last mine. But Reeder, who'd eaten heartily of the hotel's food, had developed a nasty case of diarrhea. "I need to get to a restroom real bad," he said, and went to a nearby ranch.
Later I got in the truck with him. He said he could be in production in a month; all he needed was two, two and a half million.
"I'd just ask for it," he said. "There are plenty of people that would give it to me...It's not hard for people to give you money."
If this region of Mexico was home to wealth, our time there had shown it was a well-kept secret. There were no high-rises, just small, concrete boxes lining narrow streets. I didn't see any fancy cars either, just beat-up chunks of moving metal best suited for the scrap yard. Here they crowded the roads, with drivers ignoring the "alto" stop signs posted along the way.
After two nights at a motel where the management's idea of security was to have a guy stand near the entrance undoing a suspended chain for oncoming cars, Reeder had concluded that in this nameless city, "no one altos."
He was thinking about that when he got in his fight with Kenneth. He'd asked the Nigerian whether he would answer some of my questions about the gold mines. He agreed.
In his room, Kenneth sat slumped in an old, cushioned chair. Since seeing some photos I'd snapped of him the previous day, he had barely spoken to me.
"I will not go into detail about how many mines there are," he said, looking away disdainfully.
I told him that his reticence made him look suspicious.
"Suspicious?" he countered. "I have projects to protect. I have no use to publicize a project that's in development."
Reeder came into the room and said that he was beginning to see why people had problems with Kenneth. The gathering turned tense; the heat, the charmless motel, the diarrhea merely compounded things. Yet Kenneth stood firm: He had no interest in speaking with a reporter.
This isn't what Reeder wanted me to see. "I'm outta here!" he said, and slammed the door behind him.
Later, I found Reeder in his room, shoving clothes into his suitcase. Amidst this unfolding crisis, David passed by, shaking his head. "There's a lot of gray in this ol' life. I used to think it was just black and white."
Reeder left the room, paid the hotel, then returned to David and me, calmer this time.
"She asked the right questions and nailed him in the coffin," Reeder said of me. "Thank God before I was in it."
David looked at Reeder. "I don't have any more faith in him than..." He stopped himself. "This isn't a cut against you..."
"If you say what I think you're about to say, then you've just insulted the hell out of me," said Reeder. "You were about to say that you don't have any more faith in him than you have in me, and don't tell me I'm lying."
David stammered: "When both of you..."
"In God's name," said Reeder, his voice rising. "Tell the truth. Is that what you were going to say?"
Reeder cut him off: "Say yes or no."
"You've done a lot of things," said David, "but I don't know if you're good at mining."
Reeder looked at David in wounded silence. "How about operating Cornerstone?" he said.
"I don't know," said David, sounding far less supportive of Reeder than he had just a few hours ago. "You got shut down."
"After seven years," Reeder said defiantly.
"Well," said David, "something happened, somewhere."
We got the hell out of town the next morning, after Reeder's wife persuaded her husband to wait till daybreak. As Gary and I crossed the border, we stopped off at a motel for breakfast.
Reeder grew melancholy over his eggs and salsa. Sometimes, he said, he feels bad for all the stuff he's put his wife through: the topless dancer incident, the seizure of the business. Not two weeks ago, she told him that her heart is still broken, but she's trying to move on. Reeder seemed depressed, defeated. He keeps trying to be the messiah, he said, and he keeps failing.
"I sometimes wish God would just take her," he said, "so I could end it all."
Two or three days later, Reeder had regained his optimism. He had also had a change of heart about Kenneth. Seated in his National Times office in Fort Worth, he told me that he was wrong to chide Kenneth for not wanting to speak with me. He then said he just had another car wreck, and like his previous one, the government was behind it. The car's in the back, he said, and he wanted the Observer to de-bug it. Soon, Sandra came in. We talked some about her past, and she started crying when she related how she found Christ 20 years ago. Reeder looked at her, wiping the tears from his eyes.
Later that day, he called me at home and said he was surprised at my lack of emotion when Sandra was crying. "Did that not affect you?" he asked.
Hal Degenhardt, head of the SEC's regional office in downtown Fort Worth, doesn't shed a tear for Gary Reeder.
He's seen the likes of Reeder before, the seemingly religious-minded salesman who worms his way into the hearts of a naive public, one all too willing to believe promises of wealth. He calls it "affinity fraud."
"Fraudsters are not dull people," he says. "Unfortunately, you have to be a little bit of a skeptic in this world."
Ron Sanders of Helena, Montana, admits he fell for Reeder's song and dance. The 52-year-old Sanders and his wife heard about Cornerstone through a friend, one who spoke glowingly of the profit checks he was receiving every few weeks. At the time, Sanders was working for a women's fitness-clothing franchise, and he wanted a way to retire young.
His friend's recommendation piqued his interest, and soon he made the trip to Fort Worth, to the Cornerstone office.
During that day and a half he was in Fort Worth, Sanders sensed that Reeder was eccentric, but he dismissed his concerns. "I've known a few financial geniuses, and they were pretty weird guys." Reeder had told him that he'd get a 10 percent return every month, that he had 27 companies. But when pressed about their whereabouts, Reeder was vague. "I asked him specific questions about the locations and the volumes of some of the warehouses supposedly containing these products we were contractually helping him purchase to resell, to split the profits. And he started getting pretty nebulous about that," says Sanders, who ended up being the largest investor in Cornerstone.
Sanders says that when he asked an employee the reasons for Reeder's reticence, the person said, "Gary keeps all that stuff really close to himself, because if he divulges it, he would be afraid that he would get scooped on some of the deals."
"Unfortunately," says Sanders now, "I was willing to accept that."
In the months ahead, he gave $50,000 to Reeder's Cornerstone. In return, he got a few gold and silver coins, but most important, he got the profit checks--the $5,000 a month he was promised. By November 1999, after receiving about five checks in all, he was so convinced that Reeder was trustworthy, he forked over another $300,000. Just days later, Cornerstone was seized. Since then, Sanders has recovered only $150,000.
In the past few weeks, he has filled out a questionnaire the FBI sent him about Cornerstone.
For a time after the seizure, Sanders was willing to give Reeder the benefit of the doubt. But not now. "Gary's a convicted felon," he says now. "He needs to be locked up behind bars forever in a psychiatric institution. I'm deadly serious."
Sanders' experience doesn't surprise Mike Quilling, the SEC's receiver.
"I can tell you that Gary in our very first conversation threatened me with physical violence," he says in his office. "His comment was, 'I'm going to kick your ass. You're a whore; you're a chicken; you're a pansy; you've got no spine.'
"Make no mistake," says Quilling, "Gary is not a dumb man. Gary is as street-smart as you'd ever want to find. He got his education in the penal system, and you don't grow up in prison and not learn something."
When I recently visited Reeder at his spacious apartment, he told me he'd done nothing wrong with Cornerstone.
Perhaps that explains why, when he reads aloud a gut-wrenching letter from an older woman who had invested in Cornerstone and lost everything, there is not a shred of guilt in his voice. "We have lost our retirement, our home, and a hope for a better life for our children," the woman wrote. "What makes it harder for me, Gary, is that I begged my husband not to take all our money and put it into Cornerstone...I have never bought one new dress or coat in the whole duration of our marriage."
Reeder insists that had the government not seized everything, the companies under the Cornerstone umbrella would have generated more than a billion dollars this year. And to prove his point, he's sent letters to former clients, urging their support for a class-action lawsuit he wants to file against the government, and, for good measure, the Star-Telegram and Channel 5.
The clients have responded, many sending him money.
"I'm going to get right up in the government's face," Reeder says. "In no time, I'll be making $1 million a week."
Once again, though, the details have changed. Kenneth is out again. The Nigerian, he says, had disappeared. For two weeks, he didn't know where he was, until the day Kenneth showed up at his office and told him that he had been in Mexico for two weeks with an old Cornerstone client of Reeder's and that with the latter's help, had secured rights to some mines.
Kenneth, contacted by the Observer, tells a different story--that Reeder misrepresented the mining operation to his clients, that he breached a confidentiality agreement, that they were never really partners because Reeder didn't live up to his end of the deal: providing capital. "Gary fabricates things in his mind," Kenneth says.
Whatever the case, Reeder says that he's dumped Kenneth for good, that he has a new mining project in Arizona. And wouldn't you know it? he says, "There's 1,000 times more gold there."
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you’ll never miss Observer's biggest stories.
- Donald Trump Begins Building Like Totally for Real Campaign Organization in Texas
Sun., Oct. 11, 3:25pm
Sun., Oct. 11, 3:25pm
Thu., Oct. 15, 6:30pm
Fri., Oct. 16, 7:30pm
- Jonathan Stickland, the Observer's Favorite State Rep., Gets a Primary Challenger
- Can Dallas County Cash In on the Volkswagen Scandal?