Genteel, once-sleepy Naples now appears to have claimed the dubious distinction as the playing field of choice for high-profile scamsters. In the latest fleece to blanket the affluent community of mostly Midwestern retirees and snowbirds, a 43-year-old former Jeep assembly worker from Toledo, Ohio, named David Mobley took rich Neapolitans for an estimated $59 million, federal securities regulators say. Eight months earlier, another Naples newcomer -- Brooklyn-born Anthony Marchiano -- was indicted for orchestrating a securities fraud that cost investors $100 million.
As you leave Interstate 75 and drive west toward Naples, it doesn't take long to see why investment scam artists might see the area as fertile ground. Symbols of affluence abound. Naples -- whose 77% growth rate in the 1980s made it the fastest-growing community in the country that decade -- already has more golf courses than any other city in the world, and new, gated golf-course enclaves continue to sprout. Mercedes sedans are more common than Chevrolets. Naples, with 20,000 residents in its city limits, has some 50 banks and trust companies -- including top-drawer names such as Northern Trust and U.S. Trust -- catering to the wealthy.
Shopkeepers like Harmon-Meek Gallery owner Bill Meek say sales of high-priced art have never been better, and the influx of wealth has sent property values soaring in recent years. Newcomers buy older homes, tear them down or move them and build opulent mansions in their place.
Susan McCurry, whose Coralville, Iowa, family sold its seed business to Monsanto, recently turned heads when she paid a record $18.1 million for a 21,000-sq.-ft. beachfront estate that was still under construction. Just down Gordon Drive -- Naples' most exclusive address --Alan Gerry is building a home even bigger than Bill Gates' 40,000-sq.-ft. mega-mansion. Gerry's 50,000-sq.-ft. colossus covers three lots overlooking the Gulf of Mexico. He hit it big after selling his Cablevision Industries Corp. to Time Warner for $2.7 billion in 1996.
Long a winter retreat for wealthy Midwestern business owners and corporate chiefs, Naples in recent years has also begun to attract younger part-time residents who've made fortunes in the new economy of technology and dot-com companies. Longtime residents -- in Naples, 10 years qualifies you as an old-timer -- mourn the loss of the good old days, when CEOs of Fortune 500 companies strolled the streets in relaxed, well-worn outfits. Today, the newcomers tend to wear their wealth. "This used to be a friendly hometown," says Doris Reynolds, who moved to Naples in 1952 as manager of the Chamber of Commerce and now writes a weekly food column for the local newspaper. "Now it's an upscale carbon-copy of Palm Beach. It's lost its individuality."
The road to riches
The modern growth of Naples can be traced to three major developments. The extension of I-75 south to Naples in the late 1970s allowed easier and quicker access to the area by car. Then, a major expansion of Southwest Florida International Airport in Fort Myers opened the region to foreign visitors. (It's common to overhear conversations in German as you stroll along 5th Avenue, Naples' main shopping and dining strip.)
Third, the opening of a 463-room beachfront Ritz-Carlton Hotel in 1985 exposed the city to large numbers of business travelers who came to town for conferences. A second, inland Ritz-Carlton is scheduled to open late next year, making Naples the only city in the world with two Ritz-Carltons on the same street.
Through it all, however, Naples has mostly managed to maintain a more sober, small-town feel than other fast-growing Florida cities. Residents may be wealthy, but they're also trusting: Some think nothing of leaving their front doors unlocked or their keys in the car. The community also has retained a kind of probity not found elsewhere: There are, for example, no nude bars in town.
David Mobley drove into town in 1991 in a battered, 12-year-old Mercedes. He joined a local church and got involved in several charities, including Quest for Kids, an outfit that had former President Bush and Gulf War hero Gen. Norman Schwarzkopf in town for speeches.
Mobley told a personal story crafted to appeal to hard-working, self-made Midwestern millionaires: He'd grown up poor in a working-class family in the inner city of Toledo and had become a successful real estate developer before moving to Naples, the tale went. His audience, mostly fellow Midwesterners, took him at his word. Apparently, no one bothered with so much as a cursory background check, which would have revealed that Mobley had filed for personal bankruptcy back in Ohio and had been arrested twice for writing bad checks. A grand jury indictment for theft was later dropped after Mobley agreed to return $20,000 to a fellow church member.
As he established himself in the good graces of Naples' citizenry, Mobley set up a small investment fund called Maricopa and promptly began turning out spectacular results, claiming returns of 50% a year after expenses.
Word of the new investment wizard spread through Naples' tight-knit social circles. And by the time Mobley confessed to the scam in late February, after it was first exposed in Barron's, the national financial weekly, some 170 investors had given him $140 million.
Where did the money go? Investigators say Mobley bought himself a $98,000 Porsche, a $1.7-million chalet on a mountain in Colorado, and a $1-million home in a gated golf course community in Naples. He also bought homes for his sister and daughter. He gave his wife, Gwen, a $40,000 diamond ring. He also used his investors' money to start several businesses in Naples, including a cigar bar called Heaven, and to invest in a golf stadium venture called Stadium Naples that never got off the ground.
Hal Arnett, a retired dentist, is among the trusting souls who believed Mobley and is now paying the price. Arnett, whose son, Bryan, worked in Maricopa's marketing department but was not implicated in the scam, invested a large sum of money with Mobley. He won't say how much. He's too embarrassed. After Maricopa collapsed, his son sold his house and left the area, his father said. A For Sale sign now sits in the front yard of the elder Arnett's home as well. The asking price: $3.7 million.
Mark Raymond, a Miami attorney representing several Maricopa investors, characterizes Mobley's scam as an "affinity fraud." That is, he targeted those he had something in common with -- most Maricopa investors were Midwesterners. Raymond says it's no coincidence that there were few New Yorkers who put money in Mobley's fund. "It's a Midwestern sensibility," Raymond says. "A man's word is his bond."
Confession
On a Sunday in late March, Mobley traveled to Washington, D.C. There, without a lawyer, he met with investigators from the Securities and Exchange Commission, tearfully confessing to defrauding investors of $59 million. He admitted he'd used investors' money to buy the homes, cars and businesses. He also said he used investor funds to contribute $3.5 million to Naples-area charities.
A court-appointed receiver is now trying to collect as many assets as possible to repay investors. Attorneys representing Maricopa investors are exploring legal action against others -- among them, Morgan Stanley Dean Witter, the New York brokerage that handled Mobley's trades. Meanwhile, the U.S. Attorney is investigating Mobley and Maricopa for possible criminal violations.
Unlike Mobley, Marchiano presided over an established operation when he moved to Naples. A.S. Goldmen -- founded by brothers Anthony and Salvatore, the "men of gold" -- opened in 1988 in Iselin, N.J. Prosecutors allege the firm was a classic boiler-room operation, where mostly young, inexperienced salesmen were trained in the art of the hard-sell, cold-calling prospects promising a chance to buy into young companies whose stocks were destined to climb.
What the brokers neglected to tell investors, prosecutors say, was that most of the stock the brokers were pushing was owned by A.S. Goldmen. Typically, A.S. Goldmen would take a small company public, with most of its stock owned by A.S. Goldmen officials or associates. If the price rose high enough, the firm unloaded its holdings for huge profits. In the securities industry it's known as "pump and dump."
And it was lucrative. After moving to Naples in 1995, Anthony Marchiano bought a $3.3-million beachfront mansion in Port Royal. He owned more than a dozen sports cars, including Ferraris, a Lamborghini, a Porsche, Corvettes and Mercedes. These days, Anthony Marchiano, who continues to live in Naples, spends most of his time preparing for his criminal trial in New York, expected later this year.
While regulators eventually closed down Maricopa and A.S. Goldmen, Naples securities lawyers complain that officials were as sleepy as the rest of the community when it came to having their antennae out for investment scams.
Maybe they have a point. State Attorney Joe D'Alessandro, a blunt-spoken, tobacco-dipping Fort Myers native, is an avid dabbler in penny stocks who sometimes tunes into the CNBC financial shows in his office. It turns out that D'Alessandro owned stock in the company that tried unsuccessfully to build a golf course stadium in Naples.
Several years ago, D'Alessandro says, he got a cold call from an A.S. Goldmen broker pushing shares in a New Jersey company called Skyland Park. D'Alessandro bought about 750 shares for $1,500. Skyland Park subsequently changed its named to Millennium Sports Management.
The project -- coincidentally -- also included Mobley and Marchiano. A.S. Goldmen, using Millennium as the investment vehicle, signed on to raise money for the Stadium Naples project. Separately, Mobley invested several million dollars of Maricopa investors' money in the stadium deal.
At the same time, the group hired Collier Commissioner John Norris as a consultant, offering him a $7.5-million share of Stadium Naples if the project went through.
D'Alessandro investigated whether Norris violated any state corruption laws but decided not to prosecute. After the Naples Daily News reported that D'Alessandro owned Millennium shares, the ensuing outrage prompted Gov. Jeb Bush to ask the Florida Department of Law Enforcement to review D'Alessandro's investigation. The FDLE eventually cleared D'Alessandro.
In early May, Norris settled charges leveled by the Florida Commission on Ethics, admitting he had accepted unauthorized compensation, misused his office and accepted an illegal gift from a lobbyist. He agreed to pay a $5,000 fine and $30,000 in restitution. A federal investigation of Norris is still open, D'Alessandro says.
D'Alessandro defends criticism of his office. In the Maricopa and A.S. Goldmen cases, he says, nobody came forward to complain. "I need a complaint," he says. "I can't go around investigating people based on hunch." Nor did anybody complain to the Florida Office of the Comptroller, the state agency responsible for regulating and investigating banks and financial-services firms.
Now, as the dust settles, D'Alessandro says he's holding onto his shares of Millennium Sports -- just in case they jump in value.
Who got taken?
It's unlikely that state and local authorities will make it a big priority to protect millionaire investors lusting for above-market returns, but they acknowledge the need to be vigilant against scamsters. The state Comptroller's Office recently established a regional office in Fort Myers to oversee the growing area. Robert Pappas, the new regional director, is a take-charge retired Marine pilot who won praise for convening a consumer education forum for investors in Naples. Panelists included the U.S. Attorney in Fort Myers, securities attorneys from the area -- and D'Alessandro, who has put together an economic-crimes task force, housed in the State Attorney's Office, comprised of two financial analysts from the FDLE and members of area police departments.
Meanwhile, back in Naples, Mobley and Maricopa continue to be the talk of the town. The question on everyone's lips: Who got taken? Many victims of Mobley seem to prefer remaining as low-key now as they were when they were investing. But by early May, at least one Maricopa investor had filed a lawsuit against Mobley. Mike Beaver, who moved to Naples after selling his Houston-area auto dealership, says he lost $1 million after investing with Maricopa in February.
Town wags speculate that Mobley must have millions of dollars stashed away in overseas bank accounts. His tearful confession, thought to be a ploy to buy time --or reduce any eventual prison time -- has come to be known as the Maricopa Mea Culpa.
Gossip aside, authorities and locals alike agree on one thing: It'll happen again. There are simply too many with too much money who are too eager to believe a good story. "I think if you want to catch fish, you go where the fish are," says City Councilman Fred Tarrant. "This is a fishing hole for the wealthy."
Rooted in Riches
Southwest Florida has a long history of attracting the wealthy. In the early 1900s, Barron Collier, a Memphis businessman who made a fortune off the bright idea of plastering advertisements on streetcars, traveled to the area to fish for tarpon. He was so taken with what he saw that he began buying land. By the time he finished, he owned about 2,000 square miles, or what is today Collier County.
Initially, Everglades City, south of Naples, was the county seat, a thriving town that even had streetcars. After Hurricane Donna devastated Everglades City in the early 1960s, the county seat was moved to Naples.
According to Gary Mormino, professor of history at the University of South Florida in Tampa, one of Barron Collier's great contributions to Florida was his assistance in completing the Tamiami Trail roadway that runs between Tampa and Miami. Construction of the road had stalled just south of Fort Myers until Collier intervened. Using his wealth and political pull in Tallahassee, he got the project back on track. As part of the deal, Collier got the Tamiami Trail, or Highway 41, redirected through Naples. "Naples was really isolated until the Tamiami Trail was completed," Mormino says.
In one of Florida's great missed opportunities to preserve land, Collier offered to sell Marco Island to the state for $1 million, Mormino says. The state declined the offer, and the island was subsequently developed by Deltona Corp., which also developed Key Biscayne. Today, oceanfront condos on Marco fetch $1 million apiece.