By Chris Joseph
By Chris Joseph
By Allie Conti
By Chuck Strouse
By Chris Joseph
By Chris Joseph
By Allie Conti
By Kyle Swenson
Long knows the "big guy" isn't me, but he blames me anyway. He complains that four or five people now want to kill him because of a story I wrote this past September 20 about a prolific con man and former FBI informant named Mel Ruth.
He called not long ago to rant at me.
"You weren't even mentioned in the story," I countered.
"Well, I worked with Mel Ruth, and word gets around," he replied in his booming, Southern-accented, salesman's voice.
Then he claimed that the FBI was crucifying him and insisted he'd done nothing wrong.
But was he in the boiler-room business with Ruth?
"Yes, if you want to call it that," he answered.
South Florida, the FBI will tell you, is the world capital of boiler rooms -- telemarketing operations -- that take exorbitant fees and engage in scams. Boiler-room operatives like Long usually keep themselves as far under the radar as Jeb Bush kept daughter Noelle before her recent arrest. They never draw attention to themselves. Scandals do the job for them. The businesses are hidden in strip malls and office buildings, and the people inside them don't like to talk unless they are doing the calling. You don't see the denizens of boiler rooms; you just taste their seediness in the South Florida air.
Now a player in the trade was opening up to me. All I could think of was that new rallying cry of Jeb's older brother. What exactly G.W. Bush means by it, I'm not sure. But it made a lot of sense in regard to J.W. Long.
So I met Long on Monday, January 28, in his shut-down Margate office, which was a check-cashing store/boiler room before it was raided by the FBI last June 29. It is a white building, about the size of a fast-food restaurant, located across the street from the north outlet of the Fort Lauderdale Swap Shop.
When I knocked on the locked glass doors, a man who looked like Tom Waits on his worst day emerged from the dim interior and greeted me. He had bushy sideburns and thinning, dirty-gray hair pushed straight back and was wearing a green, button-down shirt, white pants, and black tassel loafers on his small feet. A Kool cigarette dangled from a mouth defined by two upside-down, rabbit-like front teeth. He shook my hand and with a smile led me from the check-cashing store, where tellers once worked behind bulletproof glass, to his dim and empty office. A glass wall revealed another office with seven cubicles, each with a black phone. It was a dead boiler room.
He pieced together a vague outline of his past for me. His mother died while he was an infant, so he grew up with his grandparents in Knoxville, Tennessee. His father, whom he never got along with, worked as both a Baptist minister and a law librarian for the Department of Justice in Washington, D.C. Long has apparently been rebelling against all that God and law ever since. After high school, he spent ten years in the Marines before going to work in Nashville as a country-western guitar and keyboard player. He married and divorced four times (and had four kids) before moving to Miami in 1994 to wed wife number five, a Cuban immigrant he met in Nashville.
In the Sunshine State, Long was determined to make some real money as a stockbroker. "I heard they could make $40,000 in a good month," he said. A friend referred him to Biltmore Securities, a Fort Lauderdale brokerage, where Long started making cold calls to investors. But he failed the state stockbroker's test and thus was relegated to boiler rooms, or "independent sales offices," as they are called in the business. (Biltmore, incidentally, went down in flames in 1997 amid fraud allegations.)
In 1998, Long met Mel Ruth at a boiler-room operation called the Sheffield Group, which was later raided by the FBI and shut down. The two men teamed up -- Ruth as the brains, Long as the trusty follower. To even begin to understand Ruth, consider that he's ripped off countless struggling homeowners and once swindled his own neighbors out of thousands of dollars while walking his pooch. The man is an economic viper -- and he's brilliant at it.
In 1999, Ruth set up a boiler-room scam called Barclays Management and employed Long to work the phones. On March 15, 2000, the FBI raided the business and charged Ruth, who was already a convicted felon, with fraud. Ruth pleaded guilty, but in lieu of forcing him to serve his 33-month prison sentence, the FBI unwisely made him a confidential informant and persuaded a judge to turn him loose.
Once free, Ruth quickly helped set up a huge scam called Payday Today USA with a 31-year-old named David L'Hoir, who'd made some money in California in the check-cashing business. Ruth used his boiler-room prowess to help raise nearly $12 million for L'Hoir's chain of stores. Long, for his part, drummed up investors on the phone.
Problem: The stores didn't exist.
Things eventually soured between L'Hoir and Ruth, and Ruth went crying to the feds. Soon, FBI agents raided Payday Today's Fort Lauderdale office, froze more than $5 million in bank accounts, and indicted L'Hoir on fraud charges. He pleaded guilty last fall.
Long swears he had no idea Payday -- or any other business he's been involved in -- was a scam. "Hell, until L'Hoir pled guilty, I thought Payday was legitimate," he said as he poured a bit of Diet Pepsi into an old paper-clip holder he'd made into a makeshift ashtray. "I honestly believed the man was going to pull it off."
L'Hoir could have been sent away for up to five years, but what Judge William Dimitrouleas had in store for him is unknown. L'Hoir didn't show up at the January 4 sentencing hearing, and he's now a fugitive from justice. Dimitrouleas should have known that L'Hoir was a flight risk. The FBI had recorded him on an undercover tape telling Ruth that he could run and that he had already moved some of his cash out of the country. "I got everything fuckin' covered," he said on the tape. "No one can trace me.... At the end of the day, I know the game." Yet Dimitrouleas allowed him to post a $500,000 bond and walk out of jail.
When I spoke to L'Hoir in August, the man had an air of desperation. "The only thing more important than money is freedom," he told me.
I guess he meant it.
After the Payday bust, Ruth went on to another scheme, which he called Cash Today. Again, it was an operation to raise money for a check-cashing company, this one called Republic Advance Cash. The combination of Cash Today and Republic, which was owned by a 73-year-old Arizona businessman named Curtis J. Billups, turned into a $5 million mess.
Long was listed as the sole owner and president of Cash Today, but he was simply Ruth's front man. "I was, as you would put it in your article, the "straw man,'" Long told me.
Long and Ruth raised $2 million in boiler rooms in just a few months. The problem was that only $750,000 of that money actually went to Republic, which raised another $3 million through other telemarketing operations.
Ruth somehow forgot to tell his benefactors at the FBI about his booming new business. Agents found out anyway, and on June 29, they raided Long's Margate office and froze his corporate bank account, which held only $275,000. Soon, Cash Today and Republic, which had 17 stores around the state, were out of business. The millions vanished. Ruth ran from the feds but was nabbed by U.S. marshals in July. He's expected to get out of prison in 2004.
One of the first things Long said when we sat down was that he remained loyal to Melvin Donald Ruth. "If M.D. Ruth ever had a friend, it's me," he began. "I would make a deal with the devil to get him out of prison."
I found his loyalty hard to believe. Ruth, it seemed, had duped Long into the Cash Today business and hung him out to dry. Long admits Ruth never told him he was working for the FBI. "I wonder sometimes if he wasn't setting me up," Long said, "but I don't think so."
I asked him if he ever felt any guilt about his boiler-room work. "If I tell you, "Bob, give me $10,000, and I might double it, or I might lose it,' and you give it to me, whose fault is that? Yours or mine?" he answered. "I have no sympathy for anybody who is too stupid to hang the phone up."
Long blames the FBI, Billups, and L'Hoir for his problems -- anyone but himself and Ruth. He insists Cash Today would have earned investors plenty of money were it not for the FBI's raid. It sounded more like a pyramid scheme to me, so I asked him to explain exactly how it could have worked.
"I would have to tell you figures, and I can't do that," he said with a smile. "Directions and figures are two things I can't tell a man."
To test Long, I asked him to compute 40 percent of 2 million. "You tell me," he muttered blankly. He truly had no idea. The man involved in those multimillion dollar swindles can't even do simple arithmetic.
It figures. Long is no cunning con man. He's not in the class of a Ruth or a L'Hoir. He's just a half-baked, morally stunted salesman. And he's not without some charms. Like most Southern-born hucksters (and having been raised in Kentucky, I've met a few), he's quick with a laugh and doesn't take himself too seriously. He said he didn't steal money from Cash Today, and for the most part, I believe him. Long drives a Daewoo, and he's genuinely bitter about the FBI raid and dissolution of Cash Today -- which is neither the typical transportation nor disposition of a man who made off with a bundle of illicit money.
So what happened to the money raised by Cash Today and Republic? Billups returned my phone call last week and swore he didn't take it. Ruth swindled him, and Long is a "crazy man," Billups complained, adding that he's living in a trailer home in Arizona, flat broke and looking for employment.
Did Ruth hide some of the money before he was caught?
"I have no idea," Billups answered. "Trying to conjure up what happened in this deal would be like some kind of black magic. It's impossible to figure out. All I know is, I have been ruined."
The FBI investigation of Cash Today is still open, and the bank account is still frozen. The FBI won't comment on it, but I would bet that Long won't be charged with anything. As he himself puts it, "Why would they care about me? I'm baby shit."
But he's paying a price for his transgressions. Seems none of his old boiler-room friends -- a gang of sociopath swindlers, dirty salesmen, and clueless businessmen -- will hire him. "Everybody thinks I'm wired, that I'm working for the FBI," he said. "Nobody wants to be around me anymore."
Then there are those misguided death threats. Nobody should physically hurt J.W. Long, but it is fitting that an old boiler-room man is now afraid of his own phone.