Doctor Dealer (19 page)

“My concept is that I set up a corporation, and that corporation pays me a salary so I can start putting money in the bank,” said Larry. “Then I could invest in real estate.”

The lawyer stared out the window for nearly a full minute before answering. Larry held his breath. Had he gone too far?

“Maybe I should call someone,” the lawyer said.

“Who?” asked Larry.

As Larry would recall later, the lawyer explained that what he
needed was a tax expert, someone who knew how to avoid “red flags,” things like large jumps in income and other line items on tax returns that IRS accountants were likely to note.

Larry breathed a silent sigh of relief.

The lawyer said that the cash was doubly valuable just then because interest rates were high. He said he would introduce Larry to a fellow named Mark Stewart.

Larry was so relieved.
The man had not even batted an eye!
This was one moment that strongly buttressed Larry’s rationale for dealing cocaine: It was a harmless party drug (like marijuana) that had society’s tacit acceptance, and it was bound to be legal eventually. Here was the managing partner of an eminently respectable law firm; Larry had just confessed that he was dealing hundreds of thousands of dollars in illegal drugs; and the man was as ready to give him advice on how to manage his money as if Larry had made it selling socks!

The lawyer explained that this Mark Stewart had done a lot of real estate development deals in Philadelphia explaining that he had built a Jewish retirement home on Roosevelt Boulevard, and had a lot of wealthy friends in the Jewish community. The lawyer also said that Stewart was financial advisor to a number of professional sports figures. He represented Freddie Shero, the coach who had led the Philadelphia Flyers hockey team to two Stanley Cups in the seventies, had done some work for Larry Bowa, the Phillies’ shortstop, and was into boxing promotions.

“Like I said, Mark knows everybody. He’s had his ups and downs in this town, but he’s always been able to pay people back.”

That was something Larry, especially, could appreciate. He knew from hard experience about the ups and downs of business. He had lost quite a bit himself from time to time, but he took pride in the fact that he, too, had always been able to pay people back.

“I really think he can help you out,” Larry remembered the lawyer saying.

Larry agreed to meet with Stewart, but he was wary. He knew he was getting into things he knew little about. As Larry would later recall, Stewart called the next day. Larry said his schedule was crowded.

“How early do you get up?” asked Stewart.

“I’m usually up by seven a.m.; that’s when my girlfriend goes to work.”

“How about seven-thirty?”

“That early? Where?”

“I’ll come by your place. Where do you live?”

After Marcia left that morning, Stewart sipped fresh orange juice—Larry never drank coffee—in the living room. Larry ate a bowl
of cereal. They chatted about Larry’s new lawyer, then started talking business. Larry said he had a lot of cash he wanted to invest quietly. He mentioned the figure five hundred thousand dollars.

“Where did you get that kind of money?” asked Stewart. It was hard to disguise his astonishment.

“Dealing,” said Larry.

Stewart was going to ask “Dealing what?” but he thought better of it. There was a hint of a smile on Larry’s face, a faintly wicked smile. In that instant the thirty-nine-year-old businessman made a choice. What his business had always lacked was liquidity. Here was more cash than he would ever need. And yet . . . crime was a road he was reluctant to venture too far down.

As Larry later remembered the meeting, he began to candidly explain his predicament. Stewart listened attentively and asked good questions. Larry sensed that he was being sized up. He could see that the financial expert wanted to make sure he wasn’t dealing with an amateur, someone who might drag him down in a drug bust.

Larry explained that the business was handled almost exclusively by others, and that in nearly six years of dealing (and more than a million in profits) he had never even come close to being busted.

Stewart had made his decision. He began by explaining how he might go about converting some of Larry’s cash into mortgages, certificates of deposit, and other financial instruments. He said he often handled large transactions for his friends in the Jewish community, and that he knew people at the Philadelphia branch of Bank Leumi Le-Israel, an Israeli bank. He saw plenty of ways to launder Larry’s cash. The easiest was to begin by selling Larry a half interest in some of his businesses and start paying him a salary. Larry said he would want to start with a somewhat modest salary, something like $15,000 annually, or $290-$300 per week, and gradually increase it over the next few years. Stewart saw no problem with that. Another option was to set up a parent corporation that would own all the businesses and that could periodically issue Larry stock in return for cash payments.

The businessman explained, according to Larry, that every dollar in cash in the current market was worth about two dollars on paper. He said Larry could convert the cash into mortgages and real estate holdings easily, because so many people would prefer to deal in cash.

“You buy the mortgage and maybe give somebody fifty grand under the table. That way you buy something worth two hundred and only a hundred and fifty shows.” He made it sound easy.

He outlined his tax shelter business, his sports promotions efforts, his involvement with a local record company, other things. . . . Stewart
talked fast, looked him straight in the eye, and sounded reassuring and convincing.

“Look, I don’t know that much about business,” said Larry.

“You don’t make a million dollars without knowing something about business,” said Mark.

“Oh, I know about
my
business, but all these other things . . . I think I’d like to stick with real estate.”

Larry said he wanted some time to think about it and check things out. Stewart didn’t seem at all put off.

“Why don’t you stop up at my office in Center City tomorrow and I can show you more?” he said.

Larry was impressed. He was so relieved to have found someone to help him. What if it all really could be arranged so easily? He walked Stewart out to his car and shook hands with him happily.

“Tomorrow afternoon,” he said.

“So, who is this person?” asked Marcia when she saw Larry again that evening.

Larry explained that this was the guy who had been recommended to him; the one who was going to help him legitimize his money.

“That explains why he was so eager to get in here. Couldn’t wait to get his hands on the cash.”

“He’s all right, Marcia.”

“He’s just another one of your sleazeballs. I can smell ’em a mile away.”

“Oh, don’t worry,” said Larry. “He’s fine. He’s fine. My lawyer wouldn’t steer me wrong.”

The next afternoon Larry drove over to Center City, parked, and walked to the front door of the Wellington Building, an imposing building right on Rittenhouse Square, one of Philadelphia’s choicest Center City locations.

A guard asked Larry whom he wanted to see, and made a call to verify the appointment before buzzing him through glass doors into Stewart’s first-floor suite. Larry was impressed. The office furnishings were plush, modern, and colorful. He was screened by two more secretaries before being led into Stewart’s inner sanctum, a broad carpeted office with a giant desk, wood with fancy leather inlays. Larry was most impressed with the telephone on Stewart’s desk; it had about twenty
lines, including extensions in the personal bathroom off to the left! Stewart gladly spent a few minutes showing off his handsomely decorated office, unrolling a soft felt pouch that was filled with unusual, expensive pens, showing off his collection of nearly three hundred pipes, explaining that all the phone lines were WATS lines, displaying an autographed copy of Fred Shero’s biography . . . Larry was like a kid in a candy store.

Stewart spent the next hour laying out on his desk detailed financial statements for each of his companies. It was a confusing assault of facts and figures. Larry did his best to follow the explanations and ask intelligent questions, but there was no way for him to evaluate these things critically. On paper, Stewart looked like a wizard. His long list of investors and clients included doctors and dentists, prominent attorneys, wealthy Philadelphia businessmen, and some well-known local sports figures such as Eagles linebacker Jerry Robinson and running back Reggie Wilkes and Fred Shero. For any questions Larry did ask, Stewart had ready, convincing answers.

Larry noted that several times during their meeting Stewart had picked up the phone and asked impatiently, “Are they here yet?”

Finally, a young man opened the door to the office, walked across to Stewart’s desk, and handed him a box. Stewart leaned across and gave them to Larry.

“These are yours.”

Inside were nearly a thousand business cards, still warm from the printing press. They read, “TEC Records, Inc.,” and listed, “Dr. Lawrence W. Lavin, Vice-President,” underneath. Larry grinned with pleasure. This was the topper. The cards quite literally seemed to place his goal in his hands.

In fact, as Larry would learn much later, at the time Stewart was in financial straits. TEC Records and the property owned by 20th and Penrose Corp. were losing investments, valuable only as tax shelters. Stewart was only a managing partner with no equity in the Wellington Square Apartments, his most impressive asset, and he was close to a hundred thousand dollars in debt to his partners—but Larry had no way of knowing that. This entrepreneur’s eagerness to sell half his assets to a twenty-four-year-old dental student he had never met should have been a clue, but Stewart had, after all, come highly recommended. And besides, Stewart was a bridge. Larry couldn’t expect someone wholly on the up-and-up to help legitimize his drug money.

To Mark Stewart, Larry Lavin was the Golden Goose. For a man who made his living by handling other people’s money, it was a once-in-a-lifetime opportunity.

He named five companies: TEC Records, the Wellington Square Apartments, 20th and Penrose Corp., Sports Management, Inc., and Professional Talent Management, Inc. Larry later recalled that Stewart said if Larry paid five hundred thousand for a 49 percent interest in all five companies, he could start collecting a paycheck on Friday.

“We’ll even backdate a few, so you can start off with seven or eight checks,” he said.

Larry was tempted. But he recalled that he told Stewart that if they made any deal, it would have to be in writing.

“Are you sure that’s a good idea?” Stewart asked.

“Well, there’s a risk, Mark. But suppose I give you half a million and you, God forbid, get run over by a truck. Who is going to believe that I own half interest in these things?”

So Stewart agreed. He would have papers drawn up. Larry said he would come back in two days, on a Friday.

Larry had left the meeting with a sense of relief. The box of business cards was still on Stewart’s desk. He had at least a day or two to think things over.

The following morning, before his clinic hours, Larry went to look at the tangible portion of what Stewart wanted him to buy. He had already seen the Wellington Building and was impressed with that. So he drove out to Twentieth and Penrose. There, he was surprised to find that the building supposedly owned by Stewart was a Quality Inn!

He would later remember that on Friday, when he arrived in Stewart’s office, he confronted Mark with what he had discovered.

“That’s a Quality Inn out there, Mark. You don’t own that.”

“That’s true,” Mark said.

“Why did you represent this to me as yours?”

“Let me explain.”

Stewart’s explanation was swift and convincing. He had borrowed money to build that motel in 1974, but before the project was complete his financial backers had pulled out. Stewart suspected that it had dawned on them that hotel rooms would be at a premium in 1976 when tourists were expected to crowd into Philadelphia for the Bicentennial celebrations. They foreclosed on the hotel and opened it as a Quality Inn. Feeling cheated, Stewart had challenged the foreclosure in court and had won a verdict that forced the lenders to turn over to him a property of equivalent value—which turned out to be a small hotel in Atlanta. The company was still named 20th and Penrose, but the property was in Atlanta. He had documents to back up the story.

“To be honest with you, that Georgia property is not all that valuable,” Larry recalled that Stewart said, “but it makes a terrific tax shelter because it generates so much loss.” Stewart explained that one of his specialties was selling tax shelters.

Larry felt foolish.

Sheepishly, he said, “You wonder what you’re getting for five hundred thousand dollars.”

Stewart was gracious about it. He complimented Larry on his thoroughness.

The papers were simple, just a single sheet with three paragraphs, labeled “Assignment,” and an attachment called “Schedule A.” The Assignment declared that in return for “Five Hundred Thousand, $500,000”—Stewart wrote in the amount thickly with a black felt-tip pen—he was transferring to “Lawrence Lavin . . . forty-nine percent of my right, title, ownership and interest in the companies listed on Schedule A.” Schedule A, which was attached, listed twelve separate companies, including one “Larmark, Inc.,” a parent corporation that he had just invented. After Larry signed, with grand sweeping
Ls
and a tiny elevated
W,
Stewart handed him his first seven paychecks, each, after taxes, worth about $230.

Larry had fifty thousand in cash in his black briefcase. There was another hundred ten thousand in transit to Miami Beach, in the hands of a new runner named Willie Harcourt who had been recruited by David and Ken. They worked out a payment schedule, and Larry left with his box of new business cards.

Larry had converted the first installment of his fortune into “legitimate” earnings. It was one of the happiest moments of his life. That weekend he went out with Marcia and made a down payment on a brand-new black Volvo and an assortment of lenses, big and small, for his 35-mm camera.