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Tallish and given over to middle-age spread, he has a ruddy face framed by two shocks of untrimmed gray-white hair. He speaks calmly, slowly, in full sentences--a note-taker's prize.

Reese grew up on Royal Lane, the son of an entrepreneur who won and lost a few times in businesses such as swimming-pool installation. "Sometimes it was chicken, sometimes feathers," he says. There was enough of the former to send Reese to St. Mark's, one of the city's top prep schools, and Vanderbilt, where bad knees put an end to his college football career. After school, where Reese excelled with an ease that tended to amaze his peers, he took off to Europe to write short stories and ride motorcycles. His wild years past, he returned to Dallas and a real estate position arranged by his dad.

Reese was an understudy to developer Harold Shuler in the early 1970s and is credited with revitalizing much of the Greenville Avenue commercial strip and pioneering investment in the Deep Ellum warehouse district just east of downtown.

In 1983, when the two parted ways, Reese came away from their partnership with properties worth $15 million. He continued to invest on Greenville Avenue and moved aggressively into renovating small commercial buildings in Deep Ellum, assembling several complete city blocks. Today, those properties are held in several family businesses, housing such well-known restaurants as Angry Dog, St. Pete's Dancing Marlin, Baker's Ribs, and Monica's Aca y Alla. And he--or rather, his family--is still one of the largest landlords on Lower Greenville Avenue.

In the early '80s, with Texas real estate booming, Reese began getting into far bigger projects, expanding his net worth, as reported on an unaudited financial statement, to $98 million by 1984. He was making deals that required no money down from the borrower, fees paid to the lender out of the original loan, and all of it based on questionable appraisals and faith that a rapidly rising market would continue to balloon. The high-flying S&Ls needed quick deals, and Reese had briefcases full of them.

Describing one venture before the U.S. House banking subcommittee in 1987, Roy Green, former president of the Federal Home Loan Bank Board, testified that Reese bought a 2,100-acre tract off Hulen Street in southwest Fort Worth that "sold six times, sometimes between interrelated parties," inflating its value from $17 million to more than $50 million in less than two years. Reese, practicing what is often referred to as land flipping, was involved in four of the transactions.

In just several days, the Reese's Children's Trust No. 2 sold the property to another Reese affiliate, which then sold it to a third party. The lender on the last sale was Western Savings, which took at least a $30 million loss when the market went sideways.

Napp says Reese pulled tens of millions of dollars out of those transactions and put it somewhere. "That money's never been found," she says. "That's naive," counters Reese, who says he made about $8 million on the Hulen land and often used profits from one deal to repay loans on another.

While most of his peers headed for bankruptcy court in the late '80s, Reese had somehow built enough of a reserve to carry him through. In 1988, for instance, he put together a $73.9 million deal to sell a 19,000-acre sugar plantation on the island of Hawaii. That, too, became surrounded with claims of financial wrongdoing.

As set out in a 1989 lawsuit, Plano-based Stockbridge Corp. accused Reese and two longtime friends of scheming to deprive it of its half of a nearly $10 million profit made from the sale of the land to a Japanese buyer.

Stockbridge claimed Reese, who cooked up the deal on Christmas Eve, understated the true profits on the sale and distributed a $4 million "commission" to James Brand. A longtime friend of Reese's, Brand didn't even hold a real estate license, the suit pointed out. Part of the money was then wired to Prudential Bache's international trading desks in New York and London and used to buy international bearer bonds that were delivered to Brand at his home in Austin. Brand returned the bonds to Reese, who deposited them with various family trusts and corporations, the lawsuit alleged.

Reese denied wrongdoing but admitted in depositions that he transferred the profits around the world to keep them from Stockbridge. He contended that the company was not entitled to more than the $275,000 it received.

Stockbridge said that Reese used a web of companies and trusts to hide assets over the years and that he "employs a variety of fictional entities in an attempt to secret and otherwise insulate the money he derives." It settled the case for an undisclosed sum, and officers refused to return phone calls seeking comment.

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Thomas Korosec
Contact: Thomas Korosec