Science Fair Project Encyclopedia
Robert Vesco took over a small New Jersey industrial company called International Controls Corporation and grew it rapidly through hostile, debt-financed takeovers of other businesses. By 1968 the company owned an airline and several manufacturing plants and Vesco held shares totalling $50 million. Although outwardly a family man, he spent most of his time in gambling.
In 1970 Vesco emerged as a possible savior of the failing Swiss investment firm Investors Overseas Services (IOS), a firm that invested funds for overseas Americans (and Americans looking to avoid U.S. scrutiny or taxes) in a variety of mutual funds. The founder of IOS, a man named Bernie Cornfeld, had run into trouble with the Securities and Exchange Commission and when his firm ran into financial difficulty, no large, reputable 'white knight' was willing to get involved.
Vesco saw his chance, and entered in a protracted battle to assume control of the company, opposed by Cornfeld and others. The battle quickly got nasty; Cornfeld was thrown in jail in Switzerland and Vesco was accused of looting the company of hundreds of millions of dollars. Many prominent figures in global business, finance, and royalty were tied to the mess, receiving money from one party or the other for support. Among the accusations again Vesco were that he parked funds belonging to IOS's investors in a series of dummy corporations , one of which had an Amsterdam address that was later linked to Prince Bernhard of the Netherlands, and that he broke into a Swiss bank vault to obtain shares. He also befriended Donald Nixon , nephew of US president Richard Nixon. These charges will likely never be proven, as Vesco went on the lam, fleeing to Latin America and spending the next fifteen years hopping between countries that lacked extradition treaties with the United States.
In hopes of shutting off the SEC investigation into his activities, Vesco routed illegal contributions to Richard Nixon through his nephew, Donald Nixon. The story was soon revealed and Vesco was in bigger trouble than before. Among the charges that emerged in the years after Watergate, the SEC accused him of embezzling $220 million from 4 different mutual funds and he was accused of cocaine trafficking. Vesco fled to Costa Rica.
In Costa Rica, Vesco donated $2.1 million to company of president Jose Figueres . Figueres even passed a law to guarantee that Vesco would not be extradited. Vesco still hired a number of bodyguards.
In 1978 Figueres was ousted and the "Vesco Law" was repealed. Vesco moved first to Nassau and then to Antigua. Costa Rican government blocked his attempt to return. For a while, he lived in Nicaragua, while the democratically-elected people's movement of the Sandinista Government was in power which the CIA for years tried desperately to overthrow. Each of these countries accepted him in the hopes that his great wealth would finance local development projects (or significant bribes to those in charge). However, this worked poorly for everybody involved. Though Vesco was reputed to have stolen over $200,000,000, and appeared several times in Forbes Magazine's list of the wealthiest people in the world (job title: "Felon"), it seems likely in hindsight that the amount he stole was much, much smaller. By 1980, he was probably broke and attempting drug running and other ventures to keep himself afloat. In 1982 he moved to Cuba, a country that could provide him with treatment for his painful urinary tract infections, and which would not extradite him to the U.S. Cuban authorities accepted him in condition that he would not get involved in any financial deals. He also married Lidia Alfonsa Llauger.
- Arthur Herzog - Vesco, His Rise, Fall and Flight (1987)
- Arthur Hetzog - Vesco: From Wall Street to Castro's Cuba (2003) ISBN 0595272096
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