What He Did with the Money

Aside from such money as he may have been able to secrete, he used the money to amuse himself and his family. Over a period of three and a half years, for every $100,000 of earned income, he stole another $500,000 from his company, the banks, and various associates for a total theft of $1.9 million. But that amount was not enough for him—he also went through a half million dollars of his own WILTRON stock that he had received as a stock option.

Sam’s motivation during all these years of thievery must have been “sheer jealousy”. Sam obviously considered himself more important than the founders of WILTRON. Didn’t he go to better restaurants, drink more expensive wines and leave bigger tips, travel in more style, make faster decisions involving large amounts of personal money, have a more important relationship with Merrill Lynch, his stock broker. Wasn’t it only he that got Merrill Lynch’s maximum brokerage fee discount of 50%? Just because Sam had not studied electronics, why should he suffer by comparison with founders of high tech companies? Using this reasoning, Sam could justify his thefts from WILTRON and his use of money for his own advantage.

Sam wanted a lot of leverage. He at first got leverage by playing the stock market. This way he could use the same money over and over. Being a poor analyst, however, he lost in the stock market—that wasn’t any fun. Also, the stock market took too long to pay off. So he tried playing commodities. Of course, only later did these facts come out. Sam kept his “investments” very compartmentalized. It was part of Sam’s matching wits with the world. He was able to use his wits to live separate lives. One time, however, noticing the Wall Street Journal on Sam’s desk at work, I told him better not to keep it at his desk and not to receive calls from his brokers. That wasn’t too hard for Sam to swallow since he had apparently also been losing on commodity trading. Although his trading was a big ego trip at the time, with lots of stroking by the brokers, the whole process of matching wits with commodity traders was just proving to Sam that he was a loser. That must have been hard for him to swallow because when he made deals for WILTRON with my coaching, we always won.

After my admonition against stock trading at work, Sam did become more circumspect about his “investing.” Now he would do it away from work. In fact, gambling was to become his new weekend recreation—a continuous game of matching wits and risk taking. He discovered the underworld of bookies and the real leveraged action—the ultimate experience at churning money, receiving mysterious phone calls at home, speaking in code. On Saturday he would place five dimes on a horse race or another sporting event. If he lost, he would need to place ten dimes on Sunday to recoup, or to lose even more.

A dime, which he claims his clever wife never understood, is booky language for $1,000; so his ten dimes bet would be $10,000. But, alas, Sam was also a loser at gambling—his only consolation was that he lost bigger than those around him. One weekend he lost $200,000, perhaps the high point of his whole career. I’m sure it was an experience he would relate many times at his meetings of Gamblers Anonymous. In spite of his loser’s bravado, obviously the motive for his big bets was to really make it big—to recoup his losses, and to get back in the big time.

Sam wound up as a compulsive gambler, but to accept this pat alibi is to miss the point. It doesn’t explain his visit to Europe in which he took along his babysitter, his extravagant working lunches, and his wife’s visits to posh resorts. Of course, his salary of nearly $100,000 could conceivably have supported his life style, so no great suspicions were aroused, especially when nobody was looking for evil.

Finally, Sam had real trouble—he couldn’t cover his gambling debts. The betting window was closed—no more gambling, just a pile of debts to juggle. With gambling “enforcers” on his case he got careless with his thefts. But then, when Sam was caught red-handed, his first reaction was to seek my indulgence by admitting to only a small fraction of his thefts. Then he did what I advised him to do—get himself an attorney. He dutifully accepted the attorney’s advice to come clean to the FBI.

The high life was coming to an end for Sam; the bubble also burst for his children and for his wife, Diane, who immediately divorced him. In an interview with a reporter Sam confided, “I had a built-in urge to stay in action which means the world to gamblers.” He added, “There was always the possibility that something would go right, that I’d get a lucky streak. I always gambled on credit; so I had already lost it before I ‘borrowed’ it.”
Sam had come full circle. Also he had resigned himself to doing prison time. Said Sam, “I’d say the odds are very high that I’ll be going to prison.” Cox finally had the odds right: on April 30, 1984 he was sentenced to four years in the Federal Penitentiary and wound up serving a full two years.

During Sam’s period of demise I once counted nine different law suits all pending at the same time and all related to his case—creditors suing him, creditors suing one another, even his gambling associates suing WILTRON for the phony stock certificates Sam had given them as collateral. WILTRON finally persevered in all of the suits. The only asset we were able to recover from Sam was his WILTRON stock and stock options, not enough at the time to cover our losses but if you measured the value of the stock only a few years later, WILTRON actually came out ahead.

To this day we have a number of outstanding judgments against any assets Sam might have. However, at the writing of this book it has been over 15 years since Sam went to prison and none of us would dream of bothering him with these claims. If Sam should read this book he’ll know that I have no malice toward him and would love to see him to continue his story hopefully with a happier outcome.


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