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'History's Greatest Fraud?'
By Janet Leiser
Senior Editor
Eleven years ago, Ronnie D. Fulwood, a former Ruskin strawberry farmer, was in Columbia, S.C., when his 1920s German bonds were confiscated in a FBI sting. Six months later, they were returned.
"Anybody who touched these bonds would get their fingers burned," Fulwood says.
For more than a decade, Fulwood has tried to make the German government pay for gold-backed reconstruction bonds it issued in the United States after World War I. He claims he's owed $935 million for his 750 bonds. Others own thousands more.
In January, Fulwood convinced legal maverick Edward D. Fagan, an international reparations lawyer who has obtained judgments on behalf of Holocaust victims, to join his fight. (See story on page 5.)
"The core issue is real simple," Fagan says. "You issued the bonds, backed the bonds. The bonds weren't paid for. Pay the money."
Fulwood and Fagan, as intervenor plaintiff, brought a federal lawsuit in Tampa against Commerzbank AG, Prince Guilio Bissiri Mekonen Selassie and associated companies, Amdec Worldwide Holdings SA, Etienne Real Estate and Securicor-Mat Securitas Express AG.
They contend Bissiri, acting as an agent for the German government, directed Fulwood to place the bonds in a trust account at Commerzbank, but Bissiri never paid for them as agreed.
Last month, the prince, calling himself Aklile Berhan Makonn Haile Selassi Giulio Bissiri, brought his own local federal lawsuit, also in Tampa, against Fulwood for breach of contract.
Joseph D'Angelo, who says he's a doctor and "confidant to the prince," calls the complaint against Bissiri ludicrous. "They claim the prince went to Commerzbank and cashed them in," D'Angelo says. "That's not the truth. It never happened."
D'Angelo, who says he met Bissiri when the prince hired him to rebuild infrastructure in Ethiopia, says Bissiri is the grandson of the late Ethiopian Emperor Haile Selassie. Fagan says he was told Bissiri was Selassie's great-nephew.
"He looks like something out of central casting in Hollywood," says Fagan, who first met Bissiri in February in Rome. "He's tall, maybe 6-4, 250, 275 pounds, carries a 9-mm automatic on his hip."
Bond history
The $500 and $1,000 Dawes bonds were issued in 1924 and the Young bonds in 1930.
Der Spiegel, a German magazine, reported in November that one of the $1,000 bonds would be worth as much as $840,000 today, with interest. The combined value of the bonds might be as high as $500 billion and would break the German government, according to the report.
Fagan, who once studied to be a rabbi, says the issue "has been kept quiet intentionally by the Germans for many, many years.
"The background to the issuance of the bonds is an enormously sensitive and political issue," Fagan says. "The truth is if Germany had paid the debt service on the bonds, and Hitler hadn't stopped the payment, they wouldn't have had the money to fund the second World War. If we hadn't issued the bonds or helped them sell the bonds, a lot of people would not have suffered the extent to which they suffered in the Great Depression."
After World War II, the London Debt Accord was reached in 1953 to ease Germany's financial burden. Under that agreement, bondholders could trade bonds for new ones of lesser value or wait for three events to occur to be repaid, Fagan says.
"Everybody who took the exchange bonds had to get paid back everything on the exchange bonds," Fagan says. "That was event No. 1."
"Event No. 2 was you had to wait until the expiration of 40 years," Fagan says. "And the third one was you had to wait until Germany reunites.
"If all three things occur, then you, meaning someone like Mr. Fulwood, can make a claim," he adds. "Whoever thought that would happen?"
Not one bondholder has been repaid since 1994 when Chancellor Helmut Kohl announced the final repayment of the exchange bonds, Fagan says.
Becoming a soldier of fortune
Fulwood, who turns 62 on July 26, is a Plant City native who farmed for decades, until 1983. He doesn't shy away from controversy.
"I don't like to fight," Fulwood says. "But I don't like people to tell me I'm wrong when I know I'm right."
In the 1970s, he fought back and hired a Washington, D.C., lawyer when California agricultural officials claimed he was infringing on a strawberry plant patent and they wanted his fields plowed, he says.
His odyssey as a soldier of fortune began nearly 20 years ago when he met "an old fellow over in Plant City" who told him about the reconstruction bonds.
"Once I read what was on the [bond] document, I started collecting them," Fulwood says. "I hunted these things all over the world."
Fulwood paid various prices for the bonds, he says. Then he began his fight to get reimbursed by the German government. "It has been my whole life for 15 years," Fulwood says.
His contacts include a Canadian investor who was arrested in 1977 on conspiracy to commit fraud for using German bonds as collateral on a loan. Ron Stockdale, a former police officer, went to prison after German officials, including a former Nazi officer, testified during his 1979 Ontario trial that the bonds had been stolen by Russians from the Reichsbank in 1945. An appeals court later reversed Stockdale's conviction, citing the officials' testimony as hearsay.
Stockdale's nephew, Scott, wrote "History's Greatest Fraud," which claims the bond heist was cooked up as a way for Germany to get out of repaying its debt. The book, published in December 2002, even briefly mentions a "Dr. D'Angelo."
In 1993, an optimistic Fulwood took his bonds to Berlin for validation and payment. But a German official told him the bonds weren't legitimate "because the coupons were gone from 1940-45," Fulwood says. Germany had passed a law that made bonds invalid if the coupons were missing for those years.
"They can't do that," Fulwood say. "This is a document that was sold to the American people, and it's a document that explains the rules of the game in the document (in English and German), and a German government cannot change what that bond says because if they do, they are violating my rights as an American citizen and not giving me due process in my court."
Help from Rome
Eventually, Fulwood heard through his contacts that Bissiri, an Italian-Ethiopian in Rome could help. "Bissiri says he has a contract with the government, and he can redeem the bonds," Fagan says. "He is the one who is brokering the deal for the German government."
Fulwood and Bissiri exchanged documentation, letters. "Bissiri's job was to go out and find people like Ronnie and whoever and get them to physically give him the bonds," Fagan says.
Bissiri tells Fulwood that Commerzbank will accept the bonds and hold them in trust, according to Fagan. A New York City lawyer for Commerzbank says the bank doesn't comment on pending litigation.
Fulwood says Bissiri arranged the 2003 transfer of three tranches from investors around the world: the first one was for 3,506 bonds at $1.8 billion; the second for 10,600 bonds at $5.6 billion; and the third for 37,900 bonds at about $19 billion.
"Instead of there being a swap, the bonds went, the money didn't come," Fagan says.
D'Angelo says: "Fulwood knows the bonds are in the prince's possession and haven't been redeemed. ... These guys are playing a game that's incredible."
As for the first tranche, Fulwood says, he furnished most of the bonds.
"Legally he owns outright a number of the bonds," Fagan says. "He owns outright a certain percentage of the bonds, and he represents a group that controls another percentage of the bonds."
The Tampa lawsuit, however, only involves the 750 bonds that Fulwood owns, part of which has been transferred to Fagan.
Legal help
Fulwood had tried unsuccessfully in 2004 to get Fagan involved in his fight. "Everyone in Germany knows who Ed Fagan is because of the Holocaust case. I knew he wasn't a quitter, and I wasn't going to give up," Fulwood says.
Fagan responded to Fulwood after he read the Der Spiegel article. But the lawyer says it's the documentation Bissiri gave Fulwood that convinced him there was enough evidence to take the case.
Fagan says he now has "outright interest in 51.2 bonds," while the organization in Europe that finances his legal work owns 512 bonds.
After Fagan filed the Tampa lawsuit in January, he flew to Rome to serve Bissiri, then to Germany to serve officials there. He also filed a lawsuit in New York federal court in an effort to preserve evidence from Commerzbank, he says.
"What we've done in the last six months was we set the legal issues in a way they can properly move through the U.S. court system - win or lose," Fagan says. "The issue is in the United States. The deal was here."
Commerzbank has asked the court to dismiss the Tampa lawsuit, saying the court doesn't have jurisdiction. The court is expected to rule on the issue in August, Fagan says.
In the meantime, Commerzbank officials are asking the court to keep depositions sealed from public view, Fagan says.
"These are incredibly important legal issues," Fagan says, "because if the court decides in our favor and exercises jurisdiction over Commerzbank ... the case stays in Florida and what Commerzbank just did for the entire German industry of bondholders is made bad law they can't get away from. Commerzbank just brought all of them into Florida, into the United States for liability on the bonds."
Then discovery begins.
"The minute there's an order to produce documents or submit to discovery, the case is over," Fagan says. "They have never produced documents. They have never submitted to discovery. ... If they submitted to discovery, can you imagine how bad this issue is for the Germans?
"It could be a case that never gets settled. It could be a case that goes to trial and makes Enron look like a backyard party. I think it is the biggest financial crisis facing Germany since the wars."
As for Fulwood, he looks forward to a trial.
"Bring 'em on," he says. "I would love for this to go to trial because they've been hiding, lying about this for the past 50 years. I'd like for it to come out in the open. I would love for 12 people to see all the documentation that comes from these banks. Let them decide whether they're truthful or not. Believe me, there's no 12 people in this country who would see it any other way. It's too much, too long."
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