By Jeff Balke
By Ben DuBose
By Ben DuBose
By Sean Pendergast
By Sean Pendergast
By Calvin TerBeek
By Jeff Balke
By Jeff Balke
Like many people who have intersected with Al Johnson, Ranly says she felt sorry for him at first. Introduced by a mutual friend in 1990, she was immediately taken by Johnson's charm and intelligence and his story, which at that time consisted of little more than a family court judge conspiring with his ex-wife to take most of his property and keep him from his two children.
Born on the 4th of July, 1951, Johnson earned two degrees from Arizona State and worked as a police officer in Phoenix, including a stint with the SWAT-team equivalent, the Special Assignments Unit. In late 1988, he was fired for driving his pickup truck with an illegal license plate. (He says he was set up because of his involvement in a high-level drug bust.)
Johnson moved his family to Houston, but the change of scenery didn't improve his circumstances his wife soon filed for divorce, which became final in November 1989. (Johnson says his ex bribed the judge so she would get the bulk of their estate.) Johnson had no place to stay and no money to support himself. "He was broke," Ranly says. "He was cold, hungry."
So Ranly, a real estate broker who also ran a small ad agency, put him up at her home. She fed him. She paid his $800-a-month child support.
She also gave the unemployed Johnson an office in her suite on the Southwest Freeway. "He said, 'Look, all I'm asking is, if you'll give me a telephone and a corner of a desk, I'm a survivor,'" she recalls.
Johnson soon parlayed the desk and phone into a network of foreign and domestic corporations registered in Colombia, Panama, Guatemala, the Cayman Islands, Texas, Arizona. Each had one or two bank accounts, stocked modestly by Ranly, an address, and little else. On September 18, 1990, the two signed a partnership agreement that split all joint investments 50-50.
Her new partner had an ambitious, if somewhat nebulous, business plan. They would try to broker deals for multi-million dollar construction and manufacturing projects, mostly in Central and South America. Johnson's qualifications as a business executive were hardly clear, but Ranly was convinced that big bucks awaited. "I believed this was a great opportunity," she says.
Still, Ranly has a hard time defining the strategic focus. "The business venture was to make money in any legitimate way possible in any country," she says.
Johnson had an objective that was easier to conceptualize: peddling machine guns and semi-automatic weapons to law enforcement agencies and security groups in the United States and Third World countries. He could do it legally, using a federal firearms license he'd gotten as a Phoenix cop. With a $10,000 loan obtained by Ranly from West University Bank, Johnson bought a few dozen "dealer samples" from several manufacturers and put together an impressive catalog that included guns as well as helicopters, grenade launchers and other heavy hardware.
To enhance their prospects, Johnson induced Phoenix Police patrol sergeant Harvey Miller (his former supervisor) to take early retirement and move to Houston. As incentive, Johnson promised Miller a $50,000 annual salary as well as a hands-on introduction to the freewheeling world of global capitalism. In particular, Miller would provide tactical training for police departments in Latin America.
When Miller arrived in 1990, he learned that the $50,000 salary figure was overstated by $50,000. "They told me that I had misunderstood, that it was straight commission," Miller says. Johnson claims Ranly promised the salary but reneged; Ranly says she never knew of Miller's existence until he showed up in the office one day.
They also teamed with Bob Ellis, a small-time commodities broker with family connections in Guatemala. "I was actively trying to develop more import-export business with Central and South America," Ellis says.
Johnson worked feverishly, spending weeks putting together proposals and flying to Mexico, Guatemala and Colombia to meet with potential investors and government officials. He suggested building wind turbines in Argentina and Ecuador. He pitched a trucking company in Russia. He drafted a plan to distribute diesel fuel in Guatemala.
He concentrated efforts in Mexico, where he and Ranly developed proposals to build a $16.7-million factory to produce juice concentrates in Oaxaca; a $24-million housing project in Puebla; a $63-million pier and resort in Cozumel; a $54-million regional bus operation complete with 220 luxury coaches and seven terminals; a $131-million polystyrene plant in Matamoros; and a $327-million resort complex in Bahia del Carmen featuring a "fantasy village" with restaurants, nightclubs, meeting and commercial space.
In addition, Johnson and Ranly tried to leverage loans or letters of credit by manipulating a complex chain of banking transactions. Several involved a series of negotiable, government-backed GNMA securities obtained from a Panamanian investor. The biggest of the securities had a value of $51.7 million, although a recent check with Bloomberg Information Services indicates that it may be fraudulent. No one but Ranly and Johnson seemed to understand how the financing was supposed to work. "It sounded like a something-for-nothing scheme to me," Miller, the former Phoenix patrolman, says.
The weapons offered another market niche with excellent profit potential. A "company history" of the firm Al Johnson International states that "it became a major supplier of police weapons to personnel of numerous law enforcement agencies in the southwest United States. Since its start it has expanded to supply police supplies, training, security consultation and construction of security facilities throughout the world."