By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
By Deirdra Funcheon
By Kyle Swenson
Not unexpectedly, employee turnover was high. During the year I worked on Star Island, I saw more than 30 people come and go. Nevertheless, if you could look past the outbursts, Kramer could be a cool boss. "My house is your house," he often said, when he wasn't calling us all "baby lions," his affectionate term. Any employees who needed a place to live were welcome to stay rent-free in one of the guest houses, and Kramer encouraged his staff to grab a bottle of wine from his fridge and chill by his pool. We would roll our eyes and call him our "wacky German mother" when he cavorted around the kitchen making us lunch while wearing an apron with a huge black dildo embroidered on it.
What we didn't know, though, was that behind the scenes, Kramer's financial house of cards was close to tumbling down.
The judgment came January 13, nearly 21 years after Siegfried Otto had entrusted Kramer with 200 million Deutschmarks. The Swiss Federal Tribunal, the nation's highest court, was unequivocal: Kramer must now pay Otto's descendants the equivalent of $187 million.
It was Kramer's entire fortune and more — a stunning result that came from nearly two decades of legal fighting in Europe that Kramer, amazingly, had somehow kept secret from nearly everyone who knew him in Miami.
Kramer's troubles, it turned out, began back in 1993, only a year after Otto had entrusted him with his money. That's when Otto got cold feet, confessed to German authorities that he'd hidden his untaxed fortune with Kramer, and then struck a confidential deal to avoid jail time by repaying 100 million Deutschmarks (about $71.4 million). That agreement was leaked to the German press two years later, forcing Otto to resign from day-to-day operations at Giesecke & Devrient.
What was less public was Otto's legal action after settling that massive tax bill: He asked Kramer to pay back the money. Problem was, Kramer had already spent about $100 million on land in Miami Beach. So, according to Swiss court filings, Kramer returned just $20 million and refused to refund the rest. After negotiations between their lawyers failed, Kramer filed a preemptive lawsuit in July 1996 with the circuit court of Zurich claiming he was "maliciously misled during contract negotiations" with Otto in 1992 and didn't owe him anything.
Otto countersued the same year, demanding the return of all his funds plus interest and an accounting of how Kramer had spent the millions. The next year, the Swiss courts dismissed Kramer's lawsuit and sided with Otto. Whether the money that Otto gave to Kramer constituted a loan, as Otto maintained, or a gift, as Kramer claims to this day, became the basis of a string of unsuccessful appeals that would consume Kramer behind the scenes for the next 15 years.
When the 82-year-old Otto died after a series of strokes in 1997, his surviving daughters inherited their father's business and continued his lawsuit. Verena von Mitschke-Collande, the current owner of Giesecke & Devrient, and Claudia Miller-Otto, a philanthropist and abstract painter who lives in Key West, weren't willing to forgive such a colossal debt. (Both sisters declined to be interviewed for this story.)
On January 9, 2003, the Zurich High Court dismissed Kramer's appeal. To ensure that the Swiss judgment stuck, the heirs took their case to Miami. On April 13, 2007, Miami-Dade County Circuit Court decided the ruling was "an enforceable judgment of this State of Florida." The Otto sisters also targeted Kramer's London assets. A British judge froze $10 million of Kramer's property in 2007.
Despite losses on two continents, Kramer refused to give up. Within months of the Florida verdict, Kramer's lawyers petitioned the Florida Supreme Court to strike it down. In August 2009, the court denied Kramer's petition for review.
Finally, this past January, the legal drama reached its long-delayed climax when the Swiss Federal Tribunal ruled Kramer's final appeal was "without merit" and told him it was time to pay up. The Otto clan had at last prevailed against the man who'd taken their millions to Miami.
"It wasn't a matter of principle," said a source connected to the lawsuit, who requested anonymity because of ties to the Otto family. "It was definitely over the money. Two hundred million dollars isn't loose pocket change."
In the weeks after the news, Kramer's two decades of dizzying excess quickly evaporated as he scrambled to meet the Swiss judgment.
I spent February, the month before the teary meeting with his staff, covered in paper dust in a small side room with two shredders while helping Kramer eradicate 20 years of his life. Boxes of documents — party invitations from the 1990s, receipts for dinners from fancy restaurants, photographs of Portofino Tower — reached almost to the ceiling. I shredded so much that sanitation workers complained about having to haul it all away. Kramer would occasionally pop in. Humiliation welled up in his eyes as he watched his empire being slowly dismantled.
As the day of his departure to Pakistan drew closer, he became more depressed. The usual stream of gold diggers that flowed into the mansion now slowed to a trickle, though the occasional bimbo sheepishly clad in Kramer's custom-made shirts reading "Good Girls Go to Heaven, Bad Girls Go to 5 Star Island" would wander around the grounds. I genuinely feared that Kramer might harm himself. The death of his beloved father, Willi, in 2012 had forced him to confront his own mortality, and in the wake of the Swiss decision, he began to talk openly about taking his own life. I worried that one morning I might hear a shot coming from the walk-in safe upstairs where he stored his guns.
This is a good story. You have his rise to power, followed quickly by his squandering of that power, and the inevitable downfall. He should probably say to hell with reality tv and try to get his life made into a movie.
i first came across this story from the book MIAMI BABYLON which basically is the story from initially FISCHER from the north, to the present day master-builders of south beach