By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
By Angelica Leicht
In a one-page letter addressed to "Investors and Brokers," dated August 27, 1997, Melson wrote that Cord had been "dishonest with me and others and I can not [sic] and will not work under such circumstances."
"My duties at Winterhawk were to relay information to you regarding your investment," he wrote. "I only relayed information to you that was diseminated [sic] by Mr. Cord, and [that] I thought were true statements .... Personal friends of my wife and I have invested with Mr. Cord .... We, like them, have been duped."
The federal government didn't catch up to Robert Cord until February 1998. Cord, who was in London with Melson that first week of August 1997, fled to Cancun, then ended up in Belize, where he was finally arrested. On July 30, 1998, Cord agreed to plead guilty to one count of mail fraud and to turn over all assets and property that hadn't been spent or otherwise disposed of. On August 13, 1998, a dozen lawyers, including Assistant U.S. Attorney William Yahner, met at the federal building on Rusk, where a little of the mystery of Robert Cord was revealed.
His real name is Robert Franklin Schoonover, and aside from being 43 years old and an ordained Baptist minister, nothing else he ever told Billy Holcomb, Wayne Melson and the Winterhawk investors was true. Schoonover was, in fact, an escaped federal prisoner when he turned up in the Beaumont area several years ago. He was less than 30 days from completing a sentence for fraudulent use of a social security number when he up and walked away from a halfway house in Spokane.
Schoonover admitted to having been arrested at least two other times for various financial misdeeds. Apparently, though, he really did love Karisa Tinsley, as well as Michelle Crawford and Dorothy Holcomb's stepdaughter, Toni.
Schoonover said he developed much of his financial education, not at a university, but while serving time for theft at Montana State Prison, which had a cache of excess business texts from the local university. Schoonover says he skimmed through 40 or 50 books until he got to the sections on international banking, which he spent months absorbing until he was fluent in the language of the trade.
But Schoonover's real gift as a confidence man is less easily defined. In retrospect, the Holcombs and the Melsons probably view the man who disturbed the delicate equilibrium of their small-town business and social lives as shameless and greedy. But that makes for a bad con artist, Schoonover says. It does, however, make for a good victim.
"Most of them that came to me were either in need or greed, one of the two," Schoonover explained at his August 13 deposition. "And both of them being at the desperation point, they were willing to invest. [But] [a]lmost everybody presents themselves as being benevolent to some cause or someone else. After several phone calls, you end up realizing that most of the money was going into their personal bank accounts ...."
It's likely to be months, or even longer, before the dust clears from the civil forfeiture case against Winterhawk and Texas Coastal Bank that is now rolling through federal court in Houston. The case is a spider's web of claims, cross-claims and third-party plaintiffs and defendants. Some of the investors, while ostensibly fighting the bank and Schoonover, are suing each other.
Meanwhile, Texas Coastal Bank has filed its own claim to recoup approximately $1 million in certificates of deposit that secured bank loans to Robert Cord. The bank's lawyers say they are entitled to the assets because Schoonover never repaid the loans.
Lawyers for investors, however, say Billy Holcomb should have known that purchasing certificates of deposit, only to use them to secure loans, serves no legitimate business purpose. In essence, they say Billy Holcomb was a party to money laundering.
Holcomb denied that in an April 15, 1998 affidavit to the federal court. "At no time," he said, "did I or anyone I know of have any knowledge of any illegal or fraudulent transaction, conduct or activity of Cord, Winterhawk ... or any of their respective agents or representatives."
Yet a review of Winterhawk's account suggests that, while Holcomb may not have known about Schoonover's scam, he certainly helped it along with his banking practices. For example, Winterhawk's account was repeatedly overdrawn, sometimes running six-digit deficits. Yet, even when funds weren't available, Holcomb allowed Schoonover to write checks for cash and transfer money from Winterhawk's account to his personal account. Despite two visits to Winterhawk by the FBI and a federal subpoena, Holcomb continued to allow Schoonover to buy certificates of deposit with investor money, then use it to secure personal loans.
And then there is Dennis Cates, a New York investor. In July 1997, well after the FBI had asked Texas Coastal for Winterhawk's account records, Cates called Billy Holcomb. Holcomb would later say he didn't remember the conversation, but was sure he didn't recommend, one way or the other, that Cates invest in Winterhawk.
Cates recalled his chat with the banker differently. He would later explain that, if Billy Holcomb had told him anything about Robert Cord and Winterhawk --the account deficits, the personal loans, the banker's own business dealings with Cord --he wouldn't have wired $100,000 to Texas Coastal Bank on July 11, 1997.