By Chris Lane
By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
Most disturbing of all, say the kids, were the companies that relentlessly attempted to get their father to sell his future lottery installments in exchange for a lump sum. One of the most persistent, they say, was Stone Street Capital, a company that operates out of Bethesda, Maryland, and specializes in cashing out lottery winners and other people who are to receive large payments spread over several years. And after a couple of years of hemorrhaging money, Billie Bob apparently decided that he could no longer live on his half of the $1.2 million a year. He signed on with Stone Street for a quick infusion of cash. But to get the money, Billie Bob knew that the trust would have to be altered. He once again turned to attorney Karen Gerstner.
After splitting the trust in half, with Barbara Jean and Billie Bob getting equal shares of the lottery winnings, attorney Gerstner assumed she had heard the last of the Harrells.
Instead, she says, things got worse a few weeks later when she began receiving calls from Houston attorney Vic Bonner, who claimed to represent Billie Bob. Gerstner says Bonner told her that he had finally hooked up Billy Bob with Stone Street. Bonner told her that Billie Bob would receive $2.25 million in cash in exchange for ten years' worth of his share of the lottery winnings, worth more than $6 million gross. Gerstner says she immediately knew it was a very bad deal for Billie Bob. She was also concerned about the legality.
"It is not legal in Texas for a lottery winner to assign their stream of payment [to someone else] in order to obtain any kind of loan or purchase anything," says Gerstner. She assumed that after she relayed her concerns to Bonner, that would be the end of it.
It wasn't. Gerstner says Harrell and Bonner then began pestering Barbara Jean about getting in on the deal. Harrell said it somehow involved the acquisition of bonds through a company called H&H Worldwide, and a man named Paul Hulse (who reportedly lives in one of the homes purchased by Harrell). As Billie Bob explained it to Gerstner and Barbara Jean, the bond would service the debt that he would have after doing the loan with Stone Street. That explanation left even a financial expert like Gerstner, as well as Harrell's family, with their heads spinning.
"In talking with him about the deal," says son Ben, "I found he could never actually completely explain to you how the deal would work. Every time it was something different. Something would change, and something off-the-wall would come in."
Despite the warnings of his financial attorney and the misgivings of his family, Gerstner says, Billie Bob still plowed ahead. She still believes the arrangement circumvents the spirit of the state law, if not violates it. According to the contract, Billie Bob's half of the trust was placed in the control of TrustCorp America, Inc. It would receive the annual lottery payments, which would be used to repay the Stone Street loan.
"They are getting around the lottery by creating a second step," says Gerstner. "But I think it's really a distinction without a difference. They're still skirting the lottery rules."
A state lottery spokesman told the Press he was unaware of any complaints filed with the commission regarding Stone Street. Nor, he says, have there been a significant number of complaints about buyout companies in general. Citing confidentiality agreements, a spokesman for Stone Street Capital declined to comment on the company's dealings with Billie Bob Harrell Jr. The Press was unable to contact Hulse or H&H Worldwide.
When the Press reached attorney Vic Bonner by phone at his Houston law office, he first asked, "Do you want me to name names?" When told that was indeed the idea, Bonner said he would like to collect his thoughts before responding to any questions. He is apparently still collecting those thoughts, as he did not return subsequent phone calls.
Financial adviser Steve Drake spoke with Billie Bob Harrell Jr. for the last time in early May 1999. During the phone conversation, Drake urged Harrell not to go through with the deal with Stone Street, but Harrell wouldn't listen.
"He told me he that, at that point, he was in so deep that if backed out, he was afraid they would sue him," recalls Drake. He also encouraged Harrell to take out insurance to cover estate taxes that would be due if he died suddenly.
Three weeks later -- five weeks after he signed the loan agreement with Stone Street -- that unheeded advice would prove to be prophetic.
Since his divorce three months earlier, Harrell hardly had millionaire looks. His children say he'd suffered a drastic loss in weight, dropping from 220 pounds to about 170. He looked at them with a crimson face through which all the veins in his cheeks were visible. Harrell had lapsed into a personality that was moody or outright depressed.