Cut & Run

He made millions sculpting the figures of Houston women while dodging one of the largest malpractice judgments in Texas history. But after botching another surgery, can Dr. Gerald Johnson continue to operate?

A few months later, Bond arranged a $10,000 deposit from Caribbean Investment to a bank in Vicksburg, Mississippi. The certificate of deposit was used to collateralize a loan in that amount to Johnson's brother-in-law, Rex Eley, to buy Johnson's motor home, which was worth $30,000. It was pointed out to Bond during his testimony in Johnson's bankruptcy proceedings that Caribbean Investment's only transactions involved the purchase of the surgeon's assets by his relatives.

"I don't know if that's coincidental," Bond replied. "It may have been that the funding source from this was from a contact with, or somebody that knew, Dr. Johnson."

Bond testified that, as far as he knew, Irene Martin had never made any of the $15,000 annual installments on the loan, and he couldn't recall whether he received the maturity on the certificate of deposit when Eley repaid his loan. Bond also acknowledged that he didn't attempt to recoup the $10,000 that Caribbean Investment put into E. J. International, an Amway distributorship shared by Eley and Johnson. The venture eventually failed, and Johnson later testified that he lost $150,000 on the deal.

There was nothing illegal about the Caribbean Investment transactions, but their dissection in court exposed Johnson's reported insolvency as a lie. With his credibility a shambles, Johnson decided to go for broke and spin a tale that his own lawyer described as "almost too bizarre to be reasonable."

According to the surgeon's testimony, it was late 1980 or early '81 when he met Harry Bradmore in the bar of the Holiday Inn on Grand Cayman. As it often does in the Caymans, the conversation turned to business, and Bradmore told his new friend that there was a wonderful opportunity in Venezuelan oil. An investment could return as much as five times the original amount in a few years. Bradmore gave Johnson a business card with his Houston address, Two Shell Plaza downtown.

Johnson testified that by June 1981 he managed to save $210,000 in a briefcase in his closet. Without calling or visiting Bradmore's Houston office, he took the briefcase to the bar at the Holiday Inn and gave the money, in bundles of $100 bills, to Bradmore. A month later, Johnson returned to Grand Cayman with another $30,000. According to Johnson, it was another eight months, in March 1982 -- a month after the Newsome judgment put him $11 million in debt -- when he returned with another $180,000, which he again parted with at the Holiday Inn bar.

"First of all," Johnson would later testify, "let me say, a lot of the way I do business is the same as I did with Harry Bradmore. [I] meet somebody I like and I think I like and go on their advice."

Johnson said that all $430,000 in cash changed hands at a secluded place at the edge of the bar "where there was some bushes and a tree." Bradmore would bring along his own briefcase, and they'd step just out of view of the rest of the room. After the transfer was made, they would adjourn to the Holiday Inn's business office, where they borrowed a typewriter to make a receipt.

"Well," asked Bobbie Bayless, the Newsomes' attorney, at Johnson's bankruptcy trial, "if you were able to use the office to type up this receipt, why did you transfer the money behind a tree and bush?"

"Because," Johnson answered, "we transferred the money before we typed the receipt."

"Well if you knew that you could go into the office, why didn't you say, 'Let's go into the office up here to do it?' "

"That's just the way we did it," Johnson replied.
According to Bayless, by the time Johnson described his meager attempt to find Bradmore, whom he claimed had "defrauded" him, the testimony had turned laughable. Johnson said that in pursuit of his $430,000 investment, he wrote two letters to Bradmore in care of the Holiday Inn on Grand Cayman. He also paid one visit to his Houston office -- which, he discovered, was the parking garage at Two Shell Plaza.

On November 13, 1985, U.S. Bankruptcy Judge Edward J. Ryan ruled that Johnson had "failed to satisfactorily explain the loss and sudden diminution of his assets" and threw out his discharge attempt. Ryan found that the Cayman Island transactions, as well as the sale of several pension fund and real estate interests to Elaine Martin and brother-in-law Rex Eley, were "the clumsy effort of a desperate man seeking to avoid in any way the payment of his just debts ....

"The badges of fraud were shown to be present here coupled with perjury and forgery."

In his defense, Johnson insisted that the assets he set loose were his wife's, as the result of several divisions of assets the couple executed between 1977 and 1981. But Ryan blew that explanation apart by ruling that since the partition documents, for some unexplained reason, weren't legally recorded until a week after the Newsome lawsuit went to trial, they obviously had been backdated.

In a memorandum accompanying his verdict, Ryan was most eloquent in writing about what he called Johnson's "fanciful account of his imaginary friend ... Harry Bradmore, phantom agent for the non-existent Venezuelan International Oil Corporation." Ryan concluded that Johnson's story of "investing well over $400,000 by passing cash to this barroom acquaintance on several occasions is utterly incredible. It would bring a blush to the cheek of Baron Munchausen and qualify for high rank in the Ananias Club. It smacks of Lewis Carroll."

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