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Although the S&L meltdown is more than a dozen years past, creditors still are pursuing a few big cases against developers such as Reese. Napp calls them "the last of the Mohicans." It's a lawyer-intensive game of cat and mouse, pitting those savvy at protecting their assets against some insistent and resourceful collectors.

Most of the '80s high-fliers sought protection from creditors in bankruptcy court long ago. "You see these poor guys who lost it all, then they went bankrupt. That was the red flag about Lou," says Napp. "There was no bankruptcy." In other words, he owed tens of millions, but somehow was still on his financial feet. Sources in Dallas also told Napp he was back in the real estate game--making money, making deals.

Napp, an indefatigable 38-year-old whom one of Reese's lawyers describes as "a pit bull in a skirt," began her pursuit in the deed records room of the dull gray Dallas County Records Building. After months of research, she cataloged what she says is nearly $30 million worth of real estate in an array of business entities and trusts owned by immediate Reese family members--properties that once were in Lou Reese's or his companies' names. Napp was doing her homework in advance of gathering a group of 26 limited partners, half of them from Dallas, who were willing to invest in a unique and narrow business: trying to make '80s land speculators and bank defrauders pony up.

In early 1997, Napp had assembled her group and bid for the Reese debt at a government auction, offering $55,000 for a bundle of court judgments including the $29 million judgment against Reese, which had been reached in federal court in Dallas in 1993. Five years earlier, Western had sued Reese for failing to repay a group of real estate notes, and the judgment wound up as an asset held by the government after the thrift failed. Napp's group was initially outbid by a Banc One subsidiary that was purchasing judgments in bulk, but a few months later Napp bought the Reese debt from the bank for the bargain-basement price of $15,000.

Whatever they can recover is theirs, which is perhaps why Napp's group has been more aggressive than the federal government, which held Reese's debt for four years, didn't recover a dime, and then auctioned the right to collect to the private sector.

The price of the Reese judgment was low because these kinds of debts have gone uncollected for so long they're considered long shots, and the cost of recovering something can get expensive--in this case about $700,000 and counting for lawyers, travel, investigations, and so forth, Napp says.

An early expense was the assistance of Juval Aviv, a New York-based investigator with an internationally checkered reputation. Napp says she first heard of the 52-year-old private eye from a name-dropping lawyer at a conference on offshore banking. At their first meeting, Aviv handed her as his calling card a book, Vengeance, by Canadian author George Jonas, which was a best-seller in 1984 and became a made-for-cable movie, The Sword of Gideon.

Aviv claims to be a former major in Israel's elite Mossad intelligence unit and the head of a hit squad that hunted down and killed the Arab terrorist who murdered 11 Israeli athletes at the 1972 Olympics in Munich. The book and movie recount the squad's supposed exploits under the direction of Aviv, although the Israeli government denies the operation ever existed. Published reports citing unnamed intelligence sources have disputed much of Aviv's background. "It's a résumé virtually impossible to check," Napp says.

Aviv has made international news for much of the past decade as an investigator hired by Pan Am to delve into the 1988 bombing of Flight 103 over Lockerbie, Scotland. He came up with a widely reported theory--later discredited--that a rogue CIA unit played a role in the case. Then there was his federal indictment on charges of defrauding the General Electric Co. with an allegedly false report on terrorism in the Caribbean. He was acquitted of those charges in 1995.

"He is a con man," Napp says. "Which is what it took to get Lou in there talking. Don't trust Juval. Trust the tapes."

Napp says her contacts in Dallas made it clear Reese was pitching the Hawaiian deal around town, and Aviv went to a well-placed commercial real estate broker, Candace Ruben, to make the introduction. "She vouched for his credentials," says Reese, who broke a decade-long policy of not commenting to the press and talked at length about the incident with the Dallas Observer. Aviv also had letterhead and other authentic-looking documents from a real Swiss bank.



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Thomas Korosec
Contact: Thomas Korosec