If you feel at all sorry for Fort Lauderdale businessman George Levin for apparently losing a great deal of his money -- or other people's money -- in Scott Rothstein's Ponzi scheme, you can stop now.
Levin was behind the Banyon Investors Fund, which drew other hedge funds and investors into Rothstein's scheme at a dizzying pace. Estimates are that Levin helped bring $300 million Rothstein's way -- and Banyon was making outrageous returns in the process.
It seems clear that Levin drove more money to Rothstein than anyone else. But he didn't do it alone. Levin's chief operating officer at Banyon was Frank Preve, a fellow who had an office at the Rothstein Rosenfeldt Adler firm. Preve also happens to be a felon (bank fraud), according to the lawsuit recently filed by Bill Scherer.
You'd think the 69-year-old Levin would have known better than to hire a criminal to help run his hedge fund. And Levin definitely should have known that the shaky premise and ridiculous returns on Rothstein's settlement deals were a fraud.
They say it takes one to know one -- and Levin used to operate a big fraud himself.
When you dig into Levin's past, you find one of the saddest and most outrageous business and legal stories you'll ever see, one that involves a rampant fraud and a veritable martyr named Stuart Rado, a consumer activist federal prosecutors said Levin "literally pursued... to his
Back in the 1990s, Levin, who lives in a $5 million-plus house on the intracoastal with his wife, Gayla Sue, owned a company named GGL Industries, after his initials. His company did business as Classic Motor Carriages and sold kit cars, with names like "Classic Cobra," "Gazelle," and "Speedster." Beginning in 1985 and continuing through 1996, it defrauded hundreds of customers, according to federal court documents.
Hundreds of GGL's victims complained to the Florida Attorney General's Office that they were defrauded by the company. From a 1995 Miami Herald article about the company:
Classic [Motor Carriages] must address more than 900 consumer complaints stored in cardboard boxes in the state attorney general's office in Hollywood.
Those cases attack the very core of the business:
Customers say they were bulldozed into spending $5,000 to $15,000 for kits that took too long to be delivered. The promise was four to six weeks. The reality was months.
When the kit finally arrived, some customers say, 30 to 50 percent of the parts were missing, placed on "back order." Pieces that did arrive often were defective, customers say.
Many of the complaints included hand-written letters, pictures and videotapes. They paint a picture of wounded psyches as well as wounded pockets.
When the victims tried to get answers, Levin's company gave them the runaround. A Better Business Bureau representative described GGL as "a classic case of misrepresentation and bad customer service." The state filed suit against the company alleging deceptive business practices and civil theft. A special assistant attorney general named Herbert Stettin was brought in to lead the investigation. (In another small-world moment, Stettin is now the trustee overseeing the Rothstein Rosenfeldt Adler bankruptcy case.)
The federal government filed criminal charges against the company, and GGL pleaded guilty to mail fraud in 1999 and agreed to pay $2.5 million in restitution.
It was a pretty good result for Levin, since the government charged his company rather than him. But to understand the true nature of George G. Levin, you need to know the story of Stuart Rado.
Rado was a consumer activist who organized GGL's victims and helped spur the government action. Instead of dealing with Rado and his customers, Levin sued him for violating the Florida Trade Secrets Act. It was a classic frivolous SLAPP suit ("Strategic Lawsuit Against Public Participation"). The ugly scenario that followed is depicted in
a stirring and powerful post-sentencing motion made by the U.S. Attorney's Office:
In the civil complaints GGL characterized itself as an honest and upstanding business concern whose products were 'well recieved by the public' and who had been wronged by Rado and other defendants. ... Rado, who was not an attorney, appeared pro se in these civil actions. He had limited financial resources. The result was that he did not possess the legal knowledge or ability to effectively present evidence and law to overcome the work of the Plaintiff's three (3) seasoned attorneys who had the financial backing of GGL.
An order was entered on September 19, 1997 against Mr. Rado finding that he had willfully violated the Florida Trade Secrets Act and ordering that he pay plaintiff's attorneys' fees ...
You see that? Get the attorneys and enough money, the court system is a sham (I'm trying to identify the judge who allowed that sham case). The worst part is that Rado was diagnosed with cancer during the lawsuit. More from the federal motion:
GGL's fraudulent scheme necessarily included as an intricate part the silencing of its critics, among whom was Rado. It did this by using the courts to intimidate Rado into being silent and causing Rado to spend money he could not afford. It was GGL's intention (as one of GGL's attorneys said to Rado [in a 1994 deposition]) to make Rado's net worth go south. GGL and its attorneys forced Rado to incur the expenses of defending two lawsuits for over 4 years. Rado had ot incur thse expenses and live day-to-day with a barrage of pleadings, depositions and other legal maneuvers by GGL. He had to endure this even though he did nothing legally wrong, and even though GGL was in fact at the same time continuing to perpetrate its nationwide fraud. Rado was being put through this because Rado dared to contact some of GGL's victims and tell them that if they were injured by GGL they should contact the Florida Attorney General for help. What is even more despicable is that GGL knew that Rado was dying of cancer but continued to pursue him with motions and notices of trial and other pleadings, one such notice of hearing being served within days of brain surgery.
That's GGL, which stands for George G. Levin. But he wasn't done with Rado yet. Even after Rado's death, GGL hounded his estate for the payment of $80,000 in attorney's fees. Again from the federal prosecutors:
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The irony is that despite admitting it is a felon, GGL is still attempting to collect its attorneys fees it obtained ... based upon knowingly false allegations and statements to the court. GGL, having literally pursued Stuart Rado to his grave, is now pursuing him beyond by attempting to collect money from his estate.
Let's repeat: That's GGL, which stands for George G. Levin.
But Levin wasn't done. He's kept selling kit cars under a different company name, StreetBeasts. Guess what happened when a website called Hotrodders.com exposed the history of StreetBeasts and Levin? Levin hit it with a SLAPP suit last year, this one another slap at freedom of speech. The site's readers have united to help fund the defense. You can read all about that and more on this link. Miami New Times also did an article about StreetBeasts in 2006.
With the Rothstein revelation, I hope the man with the initials GGL is exposed once and for all for the beast that he is. And he wants us to believe he's a victim? Not this time.