As the Scott Rothstein's bogus scheme revved up in 2008, monster investor George Levin, flying high with Ponzi profits, began buying aircraft.
Levin started a company called Galleria Aviation in September 2008 and bought at least two jets. One was a King Air 300 that Levin purchased for $1.35 million from the State of Florida. It had previously been used to fly Gov. Charlie Crist and his Cabinet around on state business.
Another was a Cessna Citation, pictured at right, which he purchased for an unknown amount from Wells Fargo Bank. I understand he purchased other aircraft as well.
The timing of these purchases is highly suspicious because the Ponzi, which Levin was basically financing with hundreds of millions through his Banyon hedge fund, was running full-tilt. It is believed that Levin, who was a close associate of Rothstein's, took money off the table from the Ponzi to buy the planes.
Of course, anything Levin purchased with Ponzi proceeds is subject to clawback from the bankruptcy court. If anyone involved in the Ponzi were to try to hide profits from the feds, well, they could be hit with obstruction-of-justice charges. And this is where it gets interesting.
Levin sold the Cessna for
about $1.1 million on November 23 -- a few weeks after the Ponzi scheme collapsed. I'm told the sale went down offshore in Barbados. The buyer was a Delaware-registered company called Mark IV Aviation, which is actually owned by a mysterious fellow named Mark Shubin. More about Shubin below.
I was told that the profit from that Cessna Citation was converted to personal use by Levin. That would be, as established above, a no-no, perhaps one that could land the millionaire in hot water. So I called Levin's public relations firm in New York, Sunshine Sachs, for answers. "George never took any money personally from the sale of the airplane at all," one of Levin's reps told me.
So what did he do with the money then?
"It's in one of the Banyon entities," the rep said.
It's in one of the Banyon entities. Well, good. Just as long as we all know where it is, then we're all on the same page. I asked the rep why the sale went down in Barbados, and he told me didn't know if the transaction took place there.
Shubin, the buyer, is based at Fort Lauderdale Executive Airport, where he has run his own company, Sky Bus, and is affiliated with World Jet, a firm owned by Don Whittington. Whittington was a race-car driver who owned the famed Blue Thunder Racing Team and pleaded guilty to laundering drug money in 1986. His brother Bill went to prison at the same time for smuggling marijuana and tax evasion. You see, the brothers financed their little car-racing hobby with drug-smuggling proceeds. Isn't that special? (I wrote briefly about Whittington when I learned that Sheriff Al Lamberti had accepted campaign contributions from the felon he might have helped investigate once upon a time.)
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Levin's Citation buyer, Shubin, might have an even more colorful past. He's allegedly a Russian-born former CIA pilot with a cloak-and-dagger life from the get-go. Here's what underground Florida writer Daniel Hopsicker wrote about Shubin in his 2006 book, Welcome to Terrorland:
In his office in a hangar at the Fort Lauderdale Executive Airport, Mark Shubin came across as a pleasant and highly intelligent man in his later fifties, who carried, or so it seemed to us, an aura of authority. The first thing we noted when we arrived was that the offices of his company, Sky Bus, Inc., were located in the same hangar as the Whittington Brothers' company, World Jet.
Somehow it seemed prudent not to mention it. At least, not right off the bat. We told him what we'd heard about him. He smiled a little in bemusement as we spoke. Then he nodded, and said, "You know more about me than the FBI."
The true story was that Shubin's father was indeed a KGB Colonel imprisoned after being caught by his own government spying for the United States. He and his family, including young Mark, had been 'traded out' of Russia in the spy exchange involving Francis Gary Powers, the pilot of a U-2 shot down over Russia in a famous incident in 1960.
After settling in America, the KGB Colonel's son grew up to become a CIA pilot flying U-2's over Russia, where his native Russian language skills proved useful.
We were already well into spy lore, and we'd barely sat down.
That's just the beginning; Hopsicker can take you deep into a rabbit hole. I'll leave the more adventurous of you to go further with that. My attempts to reach Shubin to confirm the rather far-fetched stories about him were unsuccessful, but I promise you that you'll hear more about him.
As for Levin, I hear the questions feds and bankruptcy attorneys are asking is whether he's a net winner -- if he personally got more money out of the Ponzi than he put into it (not including hundreds of millions he received from other sources to put into the scheme). And there are a lot of suspicions that the answer is yes.