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Reese invited Aviv to a 634-acre Hawaiian retreat he carved out of a 19,000-acre land deal in the late 1980s and now is turning into an eco-tourism project. "Hans traipsed through the mud in his Gucci tennis shoes. He was kind of ridiculous," Reese says. As the summer was ending, Reese was lured to Milan for the sting--a location Napp had chosen to put Reese at ease and away from the prying eyes of his U.S. creditors.

"Of course, with what they did, I'm totally impressed," says Reese, who learned the truth a few weeks after the sting when a group of Advantage Capital lawyers confronted him at the Admiral's Club at Dallas-Fort Worth International Airport. "I've never seen anything like it in my life."

But as the intervening two and a half years have shown, getting Reese to blab on a secret tape and breaking through his battery of trust funds, transfers, and attorneys are two altogether different tasks.

Building his defense on a claim that he was "puffing" and "exaggerating to make a business deal," in Milan, Reese began a vigorous stand against his creditors in federal court. When several key rulings went against him, he followed others into that last refuge for S&L scoundrels--bankruptcy court--filing for protection from his creditors in February 1998.

Today, he is one ruling short of getting final approval for a reorganization plan that will pay Napp's partnership about $1.5 million, a proposal she opposes and says is not guaranteed to yield anything. "We believe there's been fraud," says Jeffrey Homburger, owner of New York-based Guild Capital Inc. and one of the investors in Napp's group. "There are so many smoking guns; the more we get into this, the more they smoke."

The FDIC, Reese's other big creditor, is supporting the plan, which will settle his criminal restitution debt for $500,000--representing 15 cents on the dollar--and $750,000 for about $17 million worth of failed loans--equal to just over 4 cents on the dollar.

"We did a very extensive search, and we didn't find anything we could attach," says David Barr, an FDIC spokesman in Washington. "It's one thing to say there are assets. It's another thing to get at them overseas, or if they're in a wife's name."

Given the feds' track record, the smallish recovery in the Reese case almost counts as a win. Between 1988 and 1992, the General Accounting Office found, only about 4.5 percent of financial restitution was paid by the white-collar criminals who brought down the S&Ls.

Reese may be impressed with Advantage Capital's enterprise, but he's scornful of the business they're in. "They're vultures," he says. "We have some bottom-feeding opportunists who have come up with an elaborate John Grisham tale, and they need a John Grisham ending to be satisfied."

With two adversaries in a three-year chase, things can turn personal. Napp has a few choice words for Reese as well: "Lou has been hiding behind his twice-indicted attorney. He's a real charmer." (Reese's attorney, Phil Palmer, was indicted and acquitted of bankruptcy fraud and fraud charges related to a penny stock venture. Neither case involved Reese.)

In buttoned-downed Dallas, Reese is anything but a conventional real estate guy. An investor in art-house movie projects--business papers show he backed Kiss of the Spider Woman and Trip to Bountiful--he's been known to retreat to an ashram in California for some Eastern meditation. Still, business associates say, he's as tough and calculating as he needs to be.

"Dallas is full of guys like Lou who love to make deals, and he happens to be better than most," says friend and real estate investor James "Chip" Northrup. "He's been kind of back on his feet lately, and he hasn't lost any of his zest."

Reese seemed to exhibit a certain élan as he boasted in Milan about beating his creditors and holding his own with the government. Now, ironically, that appears to be coming true.

To "Von Helbach," for instance, Reese said of his criminal restitution, which is a debt that cannot be erased in a bankruptcy: "I owe $3 million...and I won't pay 100 cents on the dollar. But I could go in there and settle that for a few hundred thousand dollars and go on about my business."

Which is exactly what he is about to do.

Tanned, relaxed, and casual, Reese arrives for an interview at the Preston Center Starbucks lugging a scuffed leather briefcase and a hand-scribbled list of notes. Dressed in a faded black polo shirt, khakis, and a black rubber Swatch watch he says he bought for $39.95, his black Mephisto shoes are the only hint of money--that and the fact that his house, "Mead Estate," is a few blocks away from this Park Cities crossroads.

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Thomas Korosec
Contact: Thomas Korosec