Wall Street Crime And Punishment: Thomas F. Quinn's Mad, Mad, Mad, Mad World - SPDR S&P 500 (ARCA:SPY)

Does crime pay?

Wall Street Crime and Punishment is a weekly series by Benzinga's Phil Hall chronicling the bankers, brokers and financial ne’er-do-wells whose ambition and greed take them in the wrong direction.

In August 1988, French authorities arrested an American expatriate named Thomas F. Quinn for orchestrating a global securities scheme that defrauded investors out of $500 million.

As an unapologetic financial miscreant with a lifelong penchant for fraud, the French escapade represented something of a career peak for Quinn, whose flair of swindling took on an astonishing level of organizing that left no corner of the world untouched.

Illusory Assets For Sale: Thomas Francis Quinn was born in Brooklyn in 1932; his father drove a cement truck and his mother was a housewife who made extra money selling clothing and jewelry from the family’s garage.

Quinn was an altar boy in his childhood and was the first member of his family to pursue higher education, graduating from St. John’s University Law School and passing the bar in 1962.

Quinn opted to go into business for himself, starting a brokerage firm in New York called Thomas, Williams & Lee. The main focus of this firm became the promotion of Kent Industries, a company that claimed to own Florida property valued at $2 million.

There was a slight problem — Kent Industries didn’t own anything in the Sunshine State, and this inconvenient fact helped to introduce Quinn to the U.S. Securities and Exchange Commission (SEC).

Long story short: Quinn received a lifetime banishment from the SEC in 1966 from doing business with brokers and dealers thanks to what the agency defined as his “flagrant fraudulent practices” related to the Kent Industries assets, which the regulator considered to be “almost completely illusory.”

The U.S. Department of Justice (DOJ) was a bit slower in dealing with Quinn, but by 1970 he was sent to jail for six months and was later permanently disbarred from practicing law.

A Job With The Mob: Prior to losing his law license, Quinn gained a partnership in a New York-based securities law firm that set off several alarms among federal law enforcement agencies. Indeed, an FBI report from 1983 recalled this firm’s chief focus was being responsible for the “funds of hoodlum-controlled companies.”

Quinn was on both the FBI’s and SEC’s respective radars in the early 1980s for his role with two companies, Sundance Gold Mining and Aquarius Gold Exploration, that claimed to have discovered gold in Suriname. The companies created a flurry of excitement among investors, but an investigation into their operations found a hitherto undeclared connection with the Genovese crime family.

The SEC filed a civil complaint against Quinn in 1983, charging him with fraudulently manipulating and promoting the companies’ stocks.

Three years later, he reached a settlement with the regulator by agreeing to permanently stay away from anything related to securities.

The FBI, despite finding Mafia fingerprints in Quinn’s business affairs, declined to press charges against him.

Realizing that he wore out his welcome in his home country, Quinn and his common-law wife Rochelle Rothfleisch decided to relocate to France and to up his game to an unprecedented operation.

Boiler Room Follies: The circumstances and details of how Quinn built his swindling masterpiece are a bit fuzzy, but it is believed that the scheme was first hatched in 1984 and was coordinated out of his $6 million villa in the south of France.

Quinn set up an archipelago of offices in several European countries and in Dubai, Jamaica and the tiny South Pacific island nation of Vanuatu, and he gave them phony names that sounded similar to respectable brokerages.

Each office was staffed with salesmen who were tasked to sell stocks for 20 U.S. corporations to individual investors around the world. The stocks in question were mostly shell companies trading on the over-the-counter exchanges that Quinn picked up for pennies, but they were resold by Quinn’s salesmen at inflated amounts.

The investors were culled from mailing lists sold by publishing companies and professional organizations, as well as from respondents to advertisements placed in newsletters focused on the over-the-counter markets.

Quinn’s henchmen would telephone the investors — nearly all of whom were novices to investing — and do a high-pressure sales spiel that, more often than not, resulted in the separation of the gullible targets from their money.

Quinn’s team aimed at European, Australian, Middle Eastern and Hong Kong neophyte investors. The only country off-limits from this scheme was the U.S. Quinn was already on the FBI’s radar and the last thing he wanted was to give them cause to pursue him anew.

A Temporary Setback: In 1988, Quinn’s arrest in France saw him charged with securities fraud, forgery of administrative documents and the possession of two fake Greek passports. His detention and the subsequent arrest of 20 of his salesmen created a fascinating dilemma for banking and law enforcement agencies in multiple countries.

For starters, no one could easily figure out where the majority of Quinn’s $500 million in ill-gotten gains wound up. Transfers were traced through banks in Switzerland, Luxembourg and Gibraltar, as well as the beleaguered Bank of Credit and Commerce International in Tampa, Florida, which gained national attention as a favored depository for those involved in drug money laundering. But where the money eventually landed was anyone’s guess, and Quinn’s talent for adopting aliases to cover his business tracks confounded investigators.

Also, it was unclear regarding how many people were swindled. A pair of class-action lawsuits brought out a total of 500 people trying to regain their money, but some observers of this case speculated the number could have been higher — some investors might have seen Quinn’s scam as a means of evading local taxes and foreign currency exchanges and would then have to answer to their authorities if this chicanery came to light.

The SEC got into the picture because the stocks being sold in the scheme were all U.S. companies. The agency hosted a meeting in Washington D.C. with law enforcement officers and prosecutors from eight European countries and Australia, with the hopes of sorting out the mess. But since no Americans were defrauded in this elaborate charade, Quinn did not face criminal charges in his own country, although the SEC temporarily froze his U.S. assets.

In France, Quinn was initially released after agreeing to reimburse his French victims but was arrested again when the Swiss government demanded his extradition.

He came to trial in 1991 and was only sentenced to four years in prison, but his sentence was reduced to include time served and he was extradited to Switzerland.

His Alpine detention was brief and by the mid-1990s he returned to the U.S. and rented a luxury home in Greenwich, Connecticut, a swanky suburb of New York City.

An Eventual Stumble: One of Quinn’s neighbors in Greenwich was Martin Frankel, a financier with his own addiction to swindling.

In 1999, the Wall Street Journal used anonymous “people familiar with the matter” to claim Quinn assisted Frankel in his efforts to raise money for a controlled investment fund designed to buy insurance companies — but this turned out to be an embezzlement scam that resulted in Frankel fleeing the U.S. to Germany on a phony passport.

Frankel was eventually extradited and spent nearly two decades in prison, but Quinn was never charged for being a partner in Frankel’s shenanigans.

For most of the 1990s and the 2000s, Quinn kept a very low public profile, although law enforcement tracked his travels to such far-flung places as the Maldives and the United Arab Emirates.

In 2004, he made a rare appearance at the Irish Derby as the co-owner of the winning thoroughbred Grey Swallow. Photographs of Quinn with the winning racehorse marked the only time that he was ever photographed in a public gathering. (Copyright restrictions prevent us from reprinting the photograph here, but this link on the RTE website shows Quinn, standing second from right, at the conclusion of the championship race.)

In November 2009, Quinn’s luck finally ran out. On a trip back from Ireland to New York’s JFK International Airport, he was arrested for his role within a ring of embezzlers that sought to defraud a pair of British telecommunications companies out of more than $60 million. The scheme had the global hallmarks of Quinn’s earlier criminal triumph, with funds being disbursed to seven countries across four continents.

Quinn was immediately jailed upon his arrest and was denied bail because it was feared he would attempt to flee the country. He eventually pleaded guilty to a single count of wire fraud and, despite exhortations to avoid prison due to health problems, he was sentenced in March 2013 to 84 months in prison. He was released in May 2016.

What became of Quinn since his release is unknown. No obituary for him has been published, and he would be 89 years old if he is still alive.

One information-tracking website listed him residing at a Brooklyn address, but the website also listed an accompanying telephone number that is not in service. Any readers who may have information on Quinn’s whereabouts should contact us and we will offer an update on his story.

Quinn rarely spoke to anyone about his criminal activities. During an investigative session after his final arrest, he reportedly would only answer questions through a series of eyelid blinks. When a reporter sought to interview him in 1995, he demanded his privacy.

"Just forget me," Quinn said. "I've got a lot of trouble and a lot of personal grief. I'm just trying to get on with my life. I'm not in the securities business and never will be again."

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