A couple of bizarre stories with Memphis angles involving an AutoZone kidnapping hoax and a big investment scam are making regional and national news.
As the Flyer reported last week, at least 16 wealthy Memphis and Crittenden County, Arkansas, investors are suing the estate of former Arkansas banker Mace David Howell over millions of dollars lost in what they claim was a commodities trading scam.
Howell, 54, was found dead in a hotel room in Beverly Hills, California, in October. The Los Angeles County Coroner's Office ruled this week that he committed suicide. David Campbell, spokesman for the coroner's office, said Howell died from acute hydrocodone intoxication. Hydrocodone is a drug typically found in Vicodin and other painkillers. Campbell said the "sudden and intense" nature of the dosage left no doubt that the cause of death was suicide.
Meanwhile, the Flyer has learned that Howell apparently also mixed gambling with his drug use and high-flying investment schemes. Memphis attorney Bobby Leatherman, whose family sold some of its farm property to the casinos when Tunica was getting off the ground, said Howell had two accidents involving small planes at the Tunica airport. On two occasions in the last three years, Howell was at the controls of small planes that ran into other planes on the ground, one of them owned by Leatherman's father. Not long after that, Howell was involved in yet another small-plane crash in North Little Rock.
Lawsuits were filed this month against Howell's estate and other defendants in Marion and Little Rock. West Memphis attorney Kent Rubens represents several Memphis-area investors, including Logan Young, Frank Barton, and Shelby County Commissioner Bruce Thompson. Their claims range from $4.74 million for Young and $5 million for Barton to $300,000 for Thompson. The lawsuit names the administrator of Howell's estate, Linda Bailey of Memphis, and three trading firms: Refco, Merrill Lynch, and Goldman Sachs.
Several claims have been made against Howell's estate in Pulaski County probate court and more are expected. The deadline for filing claims against the estate is February 14th. Sources told the Flyer that claims may eventually exceed $100 million. The Arkansas Democrat-Gazette reported that Jerry Jones, a native of Arkansas and owner of the Dallas Cowboys football team, was an investor.
Howell owned or ran banks in Arkansas in the Seventies and Eighties, according to Flyer sources and Arkansas newspaper reports. He apparently used his personal salesmanship, country club connections, and contacts he made through Young and Hot Springs, Arkansas, bank owner Richard T. Smith to recruit investors even though he was not a registered broker-dealer himself. He signed at least 33 unregistered promissory notes, some co-signed by Smith, which eventually attracted the attention of the Arkansas Securities Department.
Young declined to comment other than to confirm his participation in the lawsuit.
Howell died on October 24th. The week before his death the regulators issued a cease-and-desist order against him.
The lawsuit filed by Rubens says Howell claimed to have devised a way to make 90 percent returns in the commodities market and bond futures market. The promissory notes carried interest rates of 10-50 percent. The lawsuit says Howell paid interest to one investment group from money he got from another investment group until the scheme came undone last August or September.
Howell disappeared until his body was found in his room at the Peninsula Hotel. The coroner's office said it was reported to them that he had a history of alcohol and drug use and had been treated at the Betty Ford Clinic.
Meanwhile, in an unrelated but even more bizarre story, AutoZone officials say the kidnapping of the company's largest investor was real enough but the murder-for-hire story one of the abductors told the victim was a hoax.
Edward S. Lampert, the subject of a Flyer story a year ago in which it was suggested that the new Memphis arena be named for him because of his wealth creation, was kidnapped January 10th in Greenwich, Connecticut. Lampert's ESL Investments owns roughly 25 percent of AutoZone's stock, and he is a director of the company. He helped engineer the overthrow of the company's previous management team and the installation of Steve Odland as CEO. After Odland took over, AutoZone's stock price shot up 250 percent in roughly one year.
"We're grateful Mr. Lampert was returned unharmed," said AutoZone spokesman Ray Pohlman. "Other than that we have no comment," adding only that the murder-for-hire story was a hoax.
According to The Wall Street Journal, Lampert was abducted by four men and taken to a Days Inn motel in Connecticut. Kidnapping suspect Renaldo Rose, a 23-year-old former Marine who has been arrested, told Lampert that unnamed AutoZone officials had put out a contract on Lampert's life and that the hit men were to be paid $3 million. Rose had apparently boned up on Lampert and AutoZone on the Internet, the newspaper said.
Lampert negotiated his own release by offering his kidnappers $5 million. He was driven back to Greenwich and freed two days after he was abducted. The suspects were all arrested within a week.
Lampert attended the last AutoZone shareholders' annual meeting that was held in Memphis in December 2001. At that time, he owned 30 percent of the company, worth $2.25 billion. The stock rose from $24 a share to more than $80 a share after ESL Investments started acquiring it.