Omahan fraud probe broadens

Omaha businessman Stephen E. Bowman offered condolences and asked for cash in the same conversation.

Bowman called the son of retired Omaha investment banker Joe Haller within days of the banker's death, the son recalls. Haller, Bowman said, had agreed to invest more than $100,000 just hours before he died.

Could he send that money, Bowman asked?

The son refused and now, four years later, still is trying to get the estate repaid for his father's previous investments.

“I'd like to see some sort of justice done,” said the son, also named Joe Haller.

Haller came forward after The World-Herald reported that the U.S. Securities and Exchange Commission froze Bowman's assets in June, alleging that he and three others orchestrated an $11 million international scam.

The investigation continues to broaden as more investors and allegations surface locally and internationally. Two of Bowman's alleged accomplices were arrested this month in Sri Lanka after skipping a U.S. court hearing.

Fraud investigations sometimes uncover a network of well-connected players and deals, said Polly Atkinson, the SEC's trial counsel on this case.

“It seems like there is this little black book of fraudsters,” she said.

The SEC has accused Bowman, 61, of persuading more than 150 investors nationwide to send money in 2006 and 2007 to be used in a nonexistent “trade bank” investment. Investors were guaranteed their money back, along with monthly profits up to 70 percent, the SEC says.

Bowman, reached at his home near 114th and Pacific Streets, declined again last week to comment on the case. But in court documents he has denied breaking laws and requested a trial, which is scheduled for May. He also said his statements to investors were only repetitions of what he had been told.

A Bowman Marketing Group binder of purported investments given to the elder Haller in 2005 includes documents related to a separate multimillion-dollar scam involving a former New York Giants football player. In a brief interview last week, Bowman said he looked into but never pursued that investment.

The SEC wants to review that binder of information.

“We certainly would be very interested in seeing that,” Atkinson said.

* * *

The late Joe Haller was an educated investor.

He retired as a senior vice president at Kirkpatrick Pettis Smith Polian Inc. investment company and was inducted into the Omaha Commercial Real Estate Hall of Fame for helping finance prominent subdivisions such as Regency, Old Mill, Oak View Mall and Barrington Park.

A man who rooted for the underdog, Haller had a soft spot for entrepreneurs trying to start businesses, said his son, Joe Haller, president of an industrial tire company in Mead, Colo. Knowing startup businesses carry a higher failure rate, his father skimped on how much he put into those propositions, but they sometimes paid off for him.

“He was always trying to hit that home run,” his son said.

Haller had lost $400,000 that he had loaned to Global Connections, an Internet marketing company in which Bowman served as chief executive officer until 2000, according to e-mails between the Hallers and Bowman.

Bowman offered to help recoup his money through other ventures, the e-mails say.

“I basically said work with me and one way or another we'll come out on top,” Bowman wrote.

Haller invested $145,000 in Nation's Benefit Group, a prescription marketing company that Bowman said never started, and a “two-year trade program” that pitched a profit of 75 percent a year, the e-mails say.

Haller, 76, died in 2005 before seeing a dime.

While trying to retrieve his dad's initial investment for the estate, the younger Haller has received e-mails from Bowman promising money soon, like many investors in the SEC case. In them, Bowman said:

Dec. 30, 2005: One company will get “a sizable income within the next few days.”

Feb. 6, 2006: On a forwarded e-mail from a CEO, “We loaned him a million bucks a year and a month ago. Depending on the transaction completion, we receive between 2.5 to 4.5 million.”

March 15, 2006: He may be able to pay this week with money from “later” programs.

Meanwhile, he was gathering millions from investors for the trade bank fraud alleged by the SEC, according to Bowman's own records submitted in court

* * *

Shortly before the trade bank program started, Bowman circulated documents for other investments that involved a man convicted this year of defrauding people out of $5 million, the Bowman Marketing binder indicates.

Clyde “Peter” Hall briefly played for the New York Giants in the 1960s, but prosecutors say he spent recent years duping investors through the fictitious but grandly named Gramercy International Investment Trust.

In a brief interview, Bowman said he considered but did not complete a deal with Hall.

The Bowman binder included letters and unsigned agreements listing the same company, addresses and signatures that the FBI has proved to be fraudulent in Hall's case. According to U.S. District Court records in New York:

Hall persuaded businesspeople to give him substantial upfront fees, promising “standby letters of credit” and bank guarantees. Profits, he said, soared as high as 140 percent a month.

“It is a gift from God, if you get in!” he told an undercover agent posing as a potential investor.

Similar to the SEC allegations against Bowman, Hall promised that investors' money would be safe in an escrow account while producing huge profits.

When an undercover agent asked if she could lose her money, Hall told her, “Oh, no, no, no, that never happens.”

Like the SEC claims against Bowman and his associates, Hall e-mailed investors, sometimes for years, that riches were right around the corner, spewing excuses to explain delays.

“If you don't have the stomach to exercise that control and that level of patience, don't go into this business,” Hall told an undercover agent.

Victims included a Staten Island real estate developer, a Denver real estate agent, owners of Memphis treatment clinics and an Alabama sock manufacturer.

They lost $5.1 million, which the FBI says Hall parceled out to friends and associates and used to pay for expensive apartments, jewelry, clothing and legal fees for his son's murder case. Hall is awaiting sentencing.

Documents involving Hall were presented as part of potential investment opportunities for two of Bowman's Nebraska companies, Silicon Group and Z Picasso, in the Bowman Marketing binder. Bowman said last week that the Z Picasso deal never materialized.

Silicon Group, however, provided a $1 million bridge loan to a Maryland company that was supposed to pay a 500 percent return within 15 days, according to a signed agreement in the binder.

Bowman said with a laugh that he thought it was a large reinsurance company but it turned out to be a small one.

He said that he repaid most of the principal to investors but that there were no profits.

* * *

As the New York investigation involving Hall wound down, Bowman's case heated up.

In the SEC civil action, Bowman is accused of forwarding most of the investors' money to John S. and Marian I. Morgan of Sarasota, Fla., to invest through their Danish company, Morgan European Holdings. The SEC alleges that the three spent some of the money on themselves.

When the judge ordered them to provide investor names, Bowman's list submitted in court did not include Haller or any other Nebraskans.

Another unlisted investor is Bowman's late sister, Jan, said her widower, Bob Bright of Hawaii.

When Bowman approached the couple with investment proposals with high returns, Bright cautioned his wife, “I'm afraid this is some sort of scheme. Don't get involved.”

After his wife died last year of a cerebral hemorrhage, Bright said he found e-mails that appear to show she invested about $10,000.

An e-mail from Bowman shows a chart of compound growth: a $5,000 investment would have turned into $2 million. “This is so ridiculous,” said the widower, who is involved in a lawsuit over his wife's share of Bowman Enterprises, an Iowa corporation for the family farm near Red Oak.

Bowman at least responded to court orders to provide information in the SEC case.

The Morgans, who have declined to comment, ignored the orders, even boasting in e-mails to investors that the money was out of the government's reach.

“We are back in Europe to continue our mission with laser focus on having all MEH wires go out yesterday!” one e-mail said.

When SEC attorneys asked a judge to hold the couple in contempt, the Morgans skipped the hearing in mid-July.

U.S. marshals discovered that the couple had flown to Switzerland. The two were arrested this month in Sri Lanka, an island nation off India's coast.

They have been jailed there on suspicion of attempted bank fraud, accused of trying to cash a bad check, the SEC's Atkinson said. The Sarasota Herald-Tribune reported that the check was for $1.6 million.

Canadian police officials also are investigating the Morgans in relation to a separate trade bank scam in Canada that used two Alberta men to recruit investors. Two people separately have filed a lawsuit and a lien in that case.

In the U.S., SEC attorneys are waiting to see if Department of Justice officials will file criminal charges to extradite the couple.

Two months before the SEC action, Bowman had e-mailed Haller's son, floating hope that the estate soon would be repaid.

“It's been a long haul, but we are getting there,” Bowman wrote. “Hang on for another month.”

Contact the writer:

444-1208, karyn.spencer@owh.com

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