Grift and Run

The FBI doesn't want you to know about Mel Ruth

Ruth's long-time attorney, Matthew Destry, didn't dispute any of the allegations in the Talerico and Swain cases. Yet, incredibly, Ruth was able to walk away from both a free man. Destry's argument in court filings: Yes, Ruth took the money, but he didn't intend to commit fraud. In short, Destry argued, it wasn't a criminal matter but a business blunder.

The Talerico charge was dropped by Broward prosecutor Greg Rossman. Rossman laments the fact that fraud artists like Ruth often walk. "I have to prove criminal intent, and in mortgage fraud it is very difficult to do that," Rossman says. "You and I know it's wrong, you and I know they intended to take the money, but I can't prove it. In that case we knew the judge would grant his motion to dismiss."

The Swain case, however, was dropped by Judge Broome for another reason: Palm Beach prosecutor Preston Mighdoll made a technical error in a court filing. Mighdoll says Broome found a minor mistake in his answer to Destry's motion to dismiss. Broome also dropped the violation-of-probation charge against Ruth, so he got off scot-free.

Ruth almost pulled off the ultimate con: He's accused of ripping off millions of dollars while working for the FBI
Ruth almost pulled off the ultimate con: He's accused of ripping off millions of dollars while working for the FBI

But Ruth's probation officer, Janine Calabrese, continued to hear complaints. Her notes on Ruth reveal that she heard from many of his victims, ranging from neighbors duped into giving Ruth money for bogus real-estate investments to a Fort Lauderdale jewelry store that complained Ruth had written $6000 in bad checks for diamond rings. Many victims complained to police and prosecutors, but their allegations were rarely investigated. Ruth took advantage of loopholes in the law that served to protect him from prosecution. For instance he postdated bad checks to the jewelry store. He would also often reimburse investors with postdated rubber checks. When the victims went to police, they learned the ugly truth: Prosecutors in Florida will not criminally try check-kiting or fraud cases when the checks are postdated. "You simply can't win a conviction in those cases," says Rossman, who is in charge of Broward's economic-crime-prosecution unit. "It's not a crime because the victim knows when he receives the check that the perpetrator didn't have the money in his account."

As Ruth kept scamming people, Calabrese seemed helpless: "My hands are tied," she wrote in her notes. Even when victims took Ruth to civil court, a time-consuming and costly process, they found no justice. If they won judgments, Ruth followed his old m.o. of simply not paying them. Instead he hid from everyone -- judges, Calabrese, detectives, and victims -- by moving from motel to motel.

Ruth also flouted the criminal court, not only by repeatedly breaking the rules of his probation but also by failing to pay restitution. In late 1998 Calabrese charged Ruth with violations for failing to reimburse Beneficial Finance and moving without permission. At the court hearing on January 22, 1999, Ruth conceded guilt, and Broome ordered him to enter the Probation Restitution Center (PRC), a halfway house in West Palm Beach. Ruth agreed to begin residing at the PRC on February 15, and Broome let him go free.

Ruth never showed up at the PRC. Instead he called Calabrese and said he'd been working his "butt off" doing "bridal shows" around the state and couldn't slow down to move into a halfway house. The next day, on February 16, Ruth's girlfriend, Masseo, called Calabrese and told her that Ruth wasn't in the bridal business but was working at an investment firm in Miami called Barclays. Masseo was angry with her boyfriend; she claimed he'd charged thousands of dollars on her credit card and wouldn't repay her.

In March 1999 Ruth was hit with two new charges: contempt of court in a civil case and another probation violation. He disappeared again. Then came the FBI investigation, and finally Nass arrested him on the probation warrant March 15, 2000. Six weeks later, on April 29, Ruth was indicted on the federal fraud charges. But he wouldn't remain incarcerated long. The FBI struck a plea deal with him on May 3, 2000. In the agreement, Ruth pledged to cooperate fully with the FBI on other criminal cases, and the FBI and U.S. Attorney's Office promised to recommend that he be given a light sentence. On May 8, Ruth was allowed to bond out of jail.

He remained free until January 24 of this year, when U.S. District Judge Wilkie Ferguson sentenced him to 33 months in prison -- the lightest sentence possible under federal guidelines. But rather than serve the time, the FBI, along with assistant U.S. attorney Jeffrey Kay, asked Ferguson to allow Ruth to remain free. The judge obliged. "Execution of the sentence was postponed in view of [Ruth's] cooperation..., which may result in a reduction of the sentence," the agency wrote in court documents.

Nass's testimony in Judge Marra's courtroom was soon proved right: Ruth was still a danger to the community. According to FBI court filings, Ruth did cooperate in some unspecified telemarketing cases, but he initially kept quiet about an alleged scam he helped create.

Ruth began a new illicit venture in November 2000, when he answered an ad in the Sun-Sentinel that sought investors and fundraisers. The businessman who placed the ad, a Canadian national named David L'Hoir, had recently moved to Fort Lauderdale from San Diego and planned to start a new cash-advance company called Payday Today USA. L'Hoir (pronounced "lwyre"), who had previously owned a string of check-cashing stores in California, says he needed millions of dollars to get the company off the ground.

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