Suits on the Lam.
Corporate Chiefs Wanted by the Law Can Run,
But Can They Hide?
By Krysten Crawford
NEW YORK (CNN/Money) - Maybe it's panic, hubris, guilt -- or a
combination of the three. But every now and again, a corporate chief
accused of breaking the law hightails it rather than face the prospect
of a long time behind bars.
It's happened twice in recent weeks.
There was Herbert Axelrod, a multimillionaire publisher of pet care
books who fled the country in April soon after indictment in a tax fraud
scheme involving a rare collection of violins. He went to Cuba, then
Switzerland, and was arrested last week as he stepped off a plane in
Berlin.
Next came Tomo Razmilovic, the former CEO of bar code scanner maker
Symbol Technologies, who was charged with accounting fraud last month.
He fled first to his native Croatia before surfacing last week in
Sweden, where he told a local newspaper he intends to stay -- if Swedish
authorities let him.
Axelrod and Razmilovic join a long list of corporate suits who have fled
the feds through the decades.
More could soon follow. Criminal defense lawyers say clients are more
anxious than ever now that a post-Enron tightening of the federal
sentencing guidelines has seen jail terms skyrocket to potential life
imprisonment in the worst fraud cases.
"We're going to start seeing sentences come down that are analogous to
what crack dealers are getting because of the kick-up in the sentencing
guidelines," said Douglas McNabb, a Houston criminal defense lawyer and
expert on international extradition.
For example, former Dynegy Inc. executive Jamie Olis last month started
serving more than 24 years for fraud.
McNabb said he's seen a jump in the number of calls he gets from people
who have been indicted and are looking for advice on countries to which
they can escape. For ethical and legal reasons, McNabb said he won't
help them plot a getaway.
But there are other resources, including the web site escapeartist.com,
which addresses such subjects as "Disappear in Six Easy Lessons" and
"Restart Your Life Overseas."
There's also "The International Fugitive," a how-to guide written by
Kenn Abaygo. He also penned "Advanced Fugitive," a sequel to his
"Fugitive: How to Run, Hide, and Survive."
Roger Gallo, the founder of escapeartist.com and anti-government
crusader who prefers "refugee" to "fugitive," said in an article on his
site that Havana tops his list of ideal getaways. He also recommends
Cartagena, Colombia, where the ease of getting lost in the traffic
outweighs an extradition treaty with the U.S.
Gallo warns against hightailing it to Costa Rica, a popular destination.
"Disappearing in Costa Rica is like disappearing in Beverly Hills, and
almost as expensive," wrote Gallo. "No one disappears in Costa Rica,
except perhaps the Costa Ricans that you invest money with."
You can run... But countries have become more cooperative in recent
years about handing over fugitives wanted somewhere else. Today the U.S.
has about 120 extradition treaties with nations that basically establish
that each will hand over fugitives wanted by the other country.
"South Africa used to be a place a lot of people would go to, then it
was Spain," said Clive Stanbrook, a Belgian lawyer and co-author of
"Extradition: Law and Practice." "But these places are all drying up
now. There's not many left."
The remaining options aren't exactly oases, either because they're not
that friendly to westerners or are desolate. They include China, Russia,
and various African and Middle Eastern countries, among them Ethiopia,
Algeria and Yemen.
But wannabe fugitives should take note: Just because a country has an
extradition treaty with the U.S. doesn't mean it's not a safe haven.
Cuba, for example, has had an extradition deal with the U.S. for 100
years. But Fidel Castro, the target of various American-led
assassination and coup attempts, isn't exactly eager to accommodate U.S.
requests.
And extradition treaties themselves can contain loopholes. Razmilovic,
the ex-Symbol Technologies chief, is banking on an exception Sweden,
along with some other countries, carves out for its own citizens. Though
born in Croatia, Razmilovic claims Swedish citizenship.
Some countries won't ship scofflaws back to the U.S. if the crime of
which they're accused isn't also illegal in their own country. The
potential punishment could also be an issue: Some countries, notably in
Europe, won't extradite people who may face the death penalty in the
U.S.
On the flip side, there are risks to fleeing abroad, extradition treaty
or no. The decision on returning a wanted criminal to the U.S. is
basically up to officials in the host country. Diplomacy sometimes
prompts a foreign country to deliver a fugitive, even absent an
extradition treaty.
Extradition law experts say that reality might not bode well for
Razmilovic.
Consider too that U.S. courts have given federal agents broad authority
to "trick, lie and deceive" to lure fugitives to another, more
extradition-friendly country or into international waters, according to
McNabb. They can also kidnap fugitives, the countries' own laws be
damned.
What's more, huge advances in technology have made it far easier for the
feds to trace people through cell phone logs, credit card receipts,
among other electronic trails.
And the post-9/11 clamp down on terrorist financing has given
authorities more power to cut off access to overseas bank accounts,
leaving scofflaws with the option of lugging around suitcases full of
cash.
That means corporate scofflaws on the lam have to watch their backs day
and night.
Still, it can be done. One notorious example is Robert Vesco, the
Nixon-era financier accused of fraud who bounced throughout the 1970s
and 1980s from Costa Rica to the Bahamas to Nicaragua before landing in
Cuba. Vesco's luck ran out when he was accused in the mid-1990s of
marketing a miracle cancer drug without the Cuban government's
knowledge. He's due to be released from a Cuban jail cell in 2009.
Another high-profile deserter is Marc Rich, who fled to Switzerland
following his 1983 indictment in a massive tax fraud and illegal oil
trading scheme. There he successfully fought extradition until Bill
Clinton gave him a presidential pardon before leaving office in early
2001.
|