The Best American Crime Reporting 2010 (4 page)

“The thing with Stacy is you look at his record, there’s a bunch of felony convictions, but they’re extremely low-level types of deals,” says his attorney, Crowley. “And it’s his priors, not rocks, that got him.”

Crowley, a onetime federal prosecutor who has been a criminal defense attorney for 11 years, says his client deserved some tough love early on that he never got. “The longest he served, I think, was six years, and he needed about 12 to see if the system could shake some sense into him. Damn, it hurts to watch [Smooth go down]. There’s a little boy in every one of these guys I represent.”

Smooth’s other attorney, Hartfield, a federal public defender who argued on his behalf at sentencing, said that her client didn’t deserve the three-decade term sought by prosecutors, instead asking for 20 years. Though she doesn’t want to discuss the case while it’s on appeal, she notes in court papers that her client was trying to turn his life around. She calls him an “addict, one whose craving for a drug is so strong that he continues to sell to support his habit, heedless of the consequences.”

Hartfield also pointed to the disparity between crack and powder cocaine sentences, arguing that the laws discriminate against African-Americans such as Stith, who, while he’s used and sold powder in the past, was federally charged with holding and distributing crack. The Anti-Drug Abuse Act of 1986 set longer penalties for trafficking in crack than in powder, a disparity that critics say comes down hardest on blacks. (A U.S. Sentencing Commission study found that 82 percent of convicted crack offenders are African-American, while 72 percent of more lightly punished powder-cocaine offenders were white or Hispanic.)

On that issue, prosecutor Colasurdo agrees. “Is there a disparity? Yes,” he says. (In 2007 the U.S. Supreme Court ruled that judges can consider the unevenness of the laws when passing sentences; there are also reform efforts in Congress to balance crack and powder penalties.) But the longer potential sentence had as much to do with Smooth’s criminal history and attitude, says Colasurdo. “The case involved more than 50 grams, and he had more than two priors. By law, that allowed us to go forward with the penalty enhancement. He was never willing to cooperate, never settle, or accept what he did was wrong. Our responsibility is to protect the community.”

Colasurdo says prosecutors could have gone for additional time—a mandatory life term, in fact—but chose not to. The U.S. actually threatened to seek life as part of its plea-bargaining with Smooth, but later withdrew the motion.

On January 12, U.S. District Court Judge James L. Robart sentenced Smooth to federal prison for 24 years, with 10 years supervised release if and when he gets out. On the bench, Robart called Smooth’s record “remarkable.”

Still, notching his 112th conviction, Smooth got a couple final breaks. The two pending county drug charges from 2006 have been dropped now that’s he’s off to a federal pen. The federal court also gave him credit for the time he served awaiting trial. And his case isn’t over yet: His public defender is pursuing a reversal or a reduced sentence through the appellate courts.

Colasurdo hopes Smooth gets drug-abuse treatment in prison, if he’s amenable. “If not,” Colasurdo says, “those services should be reserved for those that are ready and willing to put forth the effort.”

Counting time for good behavior Smooth could earn while locked up, the Federal Bureau of Prisons projects his release date to be July 30, 2028, a month before his 59th birthday. That may not be life, but it will be a late start on having one.

R
ICK
A
NDERSON
is a staff writer at
Seattle Weekly
and former news columnist for the
The Seattle Post-Intelligencer
and
The Seattle Times,
where he won the Haywood Broun award for columns about the underdog. He is the author of
Seattle Vice
and
Home Front: The Government’s War on Soldiers.
His work has appeared in
Mother Jones, The Village Voice,
and
Salon.

Coda

I had just completed a story about a career criminal and frequent cop shooter who had twenty-six felonies to his credit when I began wondering if that was some kind of record. It wasn’t. As I learned reading through the tomelike court files of Stacy Stith, some fellow law breakers might aspire to the throne with 50 or even 100 arrests, but none could come close to Smooth’s 112
convictions.
I am now writing about a local crime boss who notched his first felony, a sex-related charge, when Truman was president, and today faces his ninth felony, a sex-related charge, in the age of Obama. The boss is ninety-two and claims to get laid, or tries to, every day. That’s how it is with the pros. They persevere.

FROM
Details

T
HE
G
IGOLO IS
not an attractive man. Thin-lipped and angular, Helg Sgarbi appears more bookish than rakish, and his blue eyes seem to telegraph a constant message:
vulnerability and need.
When I enter the visiting room at Munich’s Stadelheim prison, he is slouched behind a long wooden table, sandwiched between two other inmates. A little girl plays on the floor while two brothers argue in low tones. Dressed in blue prison jeans and a collared jersey, arms folded high, Sgarbi looks bored, accustomed as he is to the salons of Monte Carlo, the spa resorts of Austria, and the company of sad, doting rich women.

When he sees me approach, followed by a translator, he appears startled. Sgarbi is expecting his lawyer, not a complete stranger. Perhaps I am a hit man, sent by a cuckolded husband. A former Credit Suisse banker, the 44-year-old Sgarbi used to make his living preying on lonely women of means, seducing them, videotaping them having sex with him, and blackmailing them. That is, until the summer of 2007, when he took on three for-profit affairs simultaneously, including the one with his prize catch—Susanne Klatten, the married heiress to the BMW fortune and the richest woman in Germany, worth $12 billion—who became his downfall. Tabloids called him the “Swiss Gigolo,” and he ranks as the most notorious con-man Lothario in the world today, a grifter accused of swindling a half-dozen women (though one eventually dropped the charges) out of more than $38 million in the course of his career.

I assure Sgarbi I am not here to hurt him, that I have met with his lawyer. He cuts me off: “You spoke to
my
lawyer about
my
case?” he says in English. “I did not give permission.” In fact, Sgarbi’s attorney offered to broker an interview—for a few hundred euros—and is looking to cut a deal for the film rights to Sgarbi’s life story. You can see Sgarbi struggling to keep up with who is selling what to whom. “I am sorry you have come all this way,” he says, sounding quite genteel, as he stands. “But there is nothing that I can tell you.”

There is plenty Sgarbi could say but hasn’t. In March, he averted what would surely have been a long and sensational trial by delivering a bombshell five-line confession on his first day in court. It conveniently saved him and the powerful Klatten, or “Lady BMW,” as the press calls her, from having to air in public the lurid details of their affair—which included a videotaped sex romp at a Holiday Inn. Although prosecutors asked that Sgarbi serve nine years in prison for fraud and blackmail, the judges sentenced him to only six after he confessed. Sgarbi, who is fluent in six languages, got to keep his mouth shut—and his ill-gotten millions hidden.

But now comes a noisy sideshow that could threaten Sgarbi’s fortune. This month, Italian prosecutors will put Sgarbi’s alleged puppet-master, a 64-year-old former mechanic, on trial for “criminal association.” Police say Ernano Barretta, an Italian religious-sect leader who claims to be a faith healer and allegedly has used female followers for sex, controlled Sgarbi, helping him target women, videotape them, and spend their money—conveniently enough, by buying resort properties in Egypt and splurging on Ferraris and Lamborghinis. What Barretta couldn’t spend, Italian prosecutors say, he buried on his estate, near a 13th-century village close to the Adriatic coast.

When police raided the compound after Sgarbi’s arrest in early 2008, they found  1.5 million in cash stuffed in vases, a suit of armor, and moldy tin cans buried in the yard. Among seven people arrested that day were Barretta’s wife, his adult son and daughter, several waitresses from a wedding hall Barretta runs, and Sgarbi’s wife, Franziska, who lives in the village with their 3-year-old daughter.

With his wife and friends charged as co-conspirators, Sgarbi receives no visitors. Out of loneliness or curiosity, or perhaps just to practice his gamesmanship, he finally invites me to sit, but he remains suspicious. “There are two stories,” Sgarbi says, “the lies they tell about me and my family and the person who I am. I feel very sorry for me and my friends involved in this case.” The legendary ladies’ man, who bragged he could “read women like a map” and noted that in the female “everything is signposted,” is absorbed in self-pity.

Soon, though, he is peppering me with personal queries (how long have I been a journalist? How was my flight? Do I read the
Economist
?). He shows interest in my responses, what appears to be genuine empathy—a trait that must have helped him gain victims’ trust. “He seemed,” one woman told investigators, “very unthreatening.”

H
ELG
S
GARBI WAS BORN
Helg Russak in Zurich, the son of the deputy director of a machine and diesel-engine factory in the Swiss industrial center of Winterthur. He spent several years of his childhood in Brazil, after his father got work there as an engineer. At 22, he joined the Swiss Army. He later attended law school in Zurich, graduating in 1992 and going to work at Credit Suisse. These are facts Sgarbi is willing to discuss. Other details are murkier.

Sgarbi liked to gain sympathy from women by spinning his middle-class upbringing into a hard-luck story of lost wealth—he had a falling-out with his father over an inheritance, he would tell them, and had raised himself since he was a teen. He would also claim he had the ears of prominent businessmen like Josef Ackermann, the head of Deutsche Bank. There were elements of truth in his tales. Ackermann had served as president of Credit Suisse’s executive board during the four years that Sgarbi worked at the bank, in mergers and acquisitions. “Afterwards,” admits Sgarbi’s lawyer, Egon Geis, “his life is not so well-known.” Sgarbi tells me, with great enthusiasm, that after leaving Credit Suisse he became a corporate consultant, “taking tech companies public.” But he refuses to name any of them. He also boasts of having opened a translation company with 300 employees worldwide, called Technology Business Development. “It no longer exists,” he says.

We’re now sitting across from each other. After 30 minutes, he is more relaxed—and voluble. “I always try to find a niche,” he tells me, “some new element to exploit.”

It’s unclear what Sgarbi was up to after leaving Credit Suisse in 1996, but much of what is known comes from court records. In 2001, he drew the attention of Swiss authorities when his new fiancée, 83-year-old Countess Verena du Pasquier-Guebels, reported that 20 million Swiss francs ($19 million) had gone missing from her bank accounts. Police arrested Sgarbi that September and charged him with extortion and theft. Sgarbi returned the 20 million francs to his dowager bride-to-be. Feeling sorry for him, the countess dropped the charges. She died the next year; by then Sgarbi had sponged from her or otherwise cost her 7 million francs, for which he was never charged.

How many more affairs he had over the next three or four years is unclear. But in 2005, he seduced the 64-year-old wife of a German furniture-maker. By this point his grift had evolved from simple transfers of money into a brilliant two-phase scam. In this case, he told the woman he had struck a child with his car in the United States; if he did not pay  1.2 million, he would face jail time. He persuaded her to put up half the money in cash. Then he turned the screw, saying he had secretly photographed the two of them having sex (“to have something to occupy myself with in between our rendezvous,” he told her) and that his laptop had been stolen. The Mafia had gotten hold of it and was threatening to make the images public unless he paid  1.2 million. The woman borrowed the money from a bank and brought it to Sgarbi, who simply took the bundle of cash from her hands and sped off in a van. She told police, “He didn’t even say thank you.”

But this was only a test run for the con he would work at one of Europe’s toniest spa resorts.

T
HE HOTEL
L
ANSERHOF
is a luxury spa near the Habsburgs’ summer palace in Innsbruck, Austria, the type of retreat bored wealthy women seek out when they want to pay more than $300 for a “deep liver detox” and sip herbal tea in white robes while gazing out on the Alps. In short, it is the perfect hunting ground for a gigolo.

Sgarbi arrived, in the summer of 2007, with a sad story: His wife had run off with a Spaniard and he had come here to heal his soul. He quickly ingratiated himself with the well-heeled matrons: He displayed impeccable manners and an apparent pedigree. They loved that Sgarbi listened, he
understood
—unlike their busy husbands. He was an expert flirt, “more or less the ‘flame’ of women a certain age,” one of his victims that summer later told police. “Women absolutely wanted to know more about him.”

For his first big score, he seduced Monika Sandler, a 49-year-old German divorcée and owner of a textile empire.
Within days of meeting her, Sgarbi was staying at her home in the Austrian ski resort of Kitzbühel. “I realized he had a rather spiritual vein,” Sandler told police. And a physical one—there was lots of sex, “in several hotels, several times, in various cities,” she said, “in Rome, Munich, and my home in Kitzbühel.”

On July 4, 12 days after they met, Sgarbi made his move. He called Sandler in a panic, telling her that his car had struck a motorcyclist in Bologna and had left a child injured. He turned up at her home later with a neck brace, scratches, and a harrowing tale: The Mafia was threatening him over the child and blackmailing him for nearly  3 million. He had been able to raise all but the last  300,000, he told Sandler. “He did not ask me directly for the money,” she said. “But I decided with hesitation to help him.”

Soon he had dropped out of sight, claiming he had been forced into hiding because the Mafia was still threatening him. In fact, he had returned to the Hotel Lanserhof and landed the biggest mark of his life.

S
USANNE
K
LATTEN IS TALL
, shy, and discreet. At 47 years old, she has pretty blue eyes and the short blond hair favored by executive working moms. Despite her wealth, she has maintained a low public profile. For good reason. She is a member of the ultra-guarded and prudent Quandt dynasty, Germany’s wealthiest and most powerful family and one of its most controversial. Her great-grandfather, Gunther Quandt, made equipment for U-boats and for V2 rockets for the Nazis, reportedly with slave labor from concentration camps.

Klatten had been the target of a kidnapping plot when she was 16 years old. She is so protective of her identity that when she met her future husband, Jan, she did not tell him she was heir to an industrial fortune. As she built her career at places like Young & Rubicam, she worked under assumed names. She has an M.B.A., with an emphasis in advertising, and sits on the boards of BMW and the multi-billion-dollar chemical giant Altana, in which she owns an 88 percent stake.

Klatten arrived at the Lanserhof on July 9 for a two-week holiday. According to Sgarbi, he checked in three days later. He sidled up to her as she was reading
The Alchemist
, the inspirational tale of a young shepherd pursuing his dreams. “My favorite book,” he said. Soon they were taking walks in the mountains and having tea together. Klatten told police she found Sgarbi “charming, attentive, and at the same time kind of sad. That stirred a feeling in me that we had something in common.”

After they both left the Lanserhof, Sgarbi continued seducing her with a constant stream of text messages. In August, he turned up at her vacation home in the south of France, proclaiming his love for her. His words apparently touched a nerve: The pair consummated the affair a few days later, on August 21, in a Munich Holiday Inn. Sgarbi chose Room 629—a few steps from the elevator, which led directly to the underground garage—because it offered the most privacy.

But Klatten proved to be a tougher nut than his previous conquests. About a week later, he summoned her to an urgent meeting at a Munich airport hotel, where he told his now well-rehearsed accident story: a little girl left paraplegic. “I said, ‘Stop it now. The responsibility is yours. You have to confront this situation by yourself,’” Klatten told police. “I immediately had the feeling he would ask me for money.”

But Sgarbi did not ask—then or ever. No seasoned con man would be so direct; it made more sense to let Klatten come around on her own—and she did. “I thought he was asking for help from me in an emergency. I reflected again on these facts, feeling bad about how I had treated this man,” she said. “I refused to help a person that really needed it.” Sgarbi had appealed to her noblesse oblige as he surgically set his hook. “You see things much too materialistically,” he said to her. “At the basis of this we are dealing with love. It’s a matter of love.”

Sgarbi told Klatten he had raised  3 million but needed to come up with another  7 million, or $10 million—a third of the total each for the girl’s family, the lawyers, and a fund to help the girl in the future. This last gesture had been Sgarbi’s idea, he told Klatten, who was clearly touched. “I am helping somebody out,” she told an associate. And she came up with a phrase to use when discussing the  7 million. As it was going “for a higher cause,” helping the girl, they would call it “7-Up.”

On September 11, Klatten pulled into the Holiday Inn’s underground garage with a moving box stuffed with  7 million in plastic-wrapped  200 notes. It’s hard to imagine what was going through her mind. “She was in love,” says Thomas Steinkraus-Koch, a German prosecutor who interrogated Klatten. “And Sgarbi is a professional. This is not his first time in this.” Sgarbi checked that the money was inside the box and then drove off.

“A
FTER THE EXCHANGE OF MONEY
, he told me he wanted to have a fixed relationship with me,” Klatten told police, according to a transcript of her interrogation. Sgarbi had rented an apartment near the Holiday Inn. On September 29, Klatten met him there. It was in an ugly building, facing an office complex. “As soon as I entered I was scared, because one could see very well the workers in the offices,” Klatten said. Meaning the workers could see into the apartment too. Also, curiously, there was no furniture (Sgarbi had the gumption to tell Germany’s richest woman that he could pick some up at
IKEA
.)