Longform

Thomas Kramer's South Beach Story Ends With $200 Million Court Judgment

Red-eyed with exhaustion, Thomas Kramer slumped behind his empty desk. The real estate tycoon had been up all night worrying about how to break the news to his employees. As they filed in, he reached across the desk and grabbed a bottle of pills. Behind him, green lights blinked on an oversize map, indicating the dozens of exotic locales he'd visited. But the shell-shocked look on his face made the towering, blond German look less a glamorous entrepreneur than the general of a defeated army.

It was a Thursday morning in early March, and Kramer had called an emergency staff meeting in his "war room," as he referred to the office in his opulent Star Island mansion. The seven-member team that gathered around him had known for months their boss was facing money problems. He was so short of cash, in fact, he'd borrowed money from friends and sold off his extensive watch collection to meet payroll. Until we marched into his office, though, no one knew just how dire the situation had become.

"I can no longer afford to keep you guys," Kramer said softly as he began to cry. "There are only so many watches I can sell. I feel like I have failed you all."

In the 12 months I'd worked for Kramer as his in-house writer, I'd witnessed firsthand his crippling mood swings, but I'd never seen him this depressed. "I see no other option," he sobbed.

That morning marked a new low in one of the most incredible rise-and-fall stories in Miami Beach's storied history of booms and busts. In the 1990s, Kramer was SoBe royalty, the man who'd spearheaded the South of Fifth revival and ruled from a waterfront mansion where wild shindigs sometimes turned into outright orgies. More than anyone, he symbolized an era of glamour, decadence, and carefree excess.

Now it was all over thanks to a Swiss court ruling in January that Kramer had to repay nearly $200 million to a German currency-printing dynasty. His appeals were up. Everything had to go — the house, the staff, the jewelry, the extensive cellar of vintage wine, even the taxidermied giraffe that greeted visitors in the hallway. Because of my job in Kramer's mansion, I had a unique front-row seat for his last days in Miami Beach. I saw one man's desperate efforts to salvage his name and his livelihood, afraid but hopeful that some last-minute opportunity would save him from financial ruin.

In fact, by the time he dismissed his staff, Kramer had already found the man he believed could be his long-shot savior: a scandal-tarred Pakistani plutocrat named Malik Riaz who wanted a partner to build a $20 billion island city in Karachi. Riaz, Kramer said that morning between sobs, was his last best hope.

"This is a once-in-a-lifetime chance to bring Pakistan back on the map of the leading nations in the world," Kramer later said of the project.

If he succeeds in Karachi, Kramer could pull off the ultimate coup in a career full of remarkable comebacks. If he fails, though, it's anyone's guess how low he could fall.

"I don't see any possibility of the island project materializing," says Amir Mateen, a Pakistani reporter who wrote a ten-part series about Malik Riaz for the Pakistani newspaper the Spokesman. "It has all the ingredients of a scam."


Thomas Kramer was a notorious figure even as a teenager. He was born April 27, 1957, in Frankfurt, Germany, and by the age of 13 he was making waves with a rabidly right-wing student newspaper he founded called Pausenzeichen, the German word for "recess" or "break."

As student protests raged against the Vietnam War, young Thomas watched cars burning in the street and police battling protesters, he recalled in interviews for his unpublished memoirs. Even though he had yet to visit the country, Kramer loved America, or at least the idea of America. To him it represented freedom and democracy, while the student protesters represented the opposite: the tyranny of East German-style socialism.

After his home was graffitied with threats tied to his newspaper, his father, a stockbroker named Willi Kramer, and his mother, Ingeborg, shipped Thomas off to Salem Boarding School, a posh private academy housed in a castle. Suddenly surrounded by students and teachers who agreed with his right-wing views, Kramer grew bored with politics. It was a move he'd repeat throughout his life. He thrived on conflict.

Instead, the teenager turned his energies to making money in the stock market just like his father. The fact that Willi's son wasn't old enough to trade didn't stop him. Kramer often told a story about changing his age on his passport, opening an account with 500 Deutschmarks, and then trading on the school pay phone. By the end of high school, he claimed, he made his first million Deutschmarks. (Though he also admitted he just as quickly lost it on bad investments — another recurring pattern.)

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Lera Gavin