Search

THE BIG BOXING CON: AN ACCOUNT OF THE HAROLD SMITH HUSTLE OF A BANK

Feb. 18, 1985
Feb. 18, 1985

Table of Contents
Feb. 18, 1985

Alpine Championships
Wayne Gretzky
Barry McGuigan
Hoosier Hysteria

THE BIG BOXING CON: AN ACCOUNT OF THE HAROLD SMITH HUSTLE OF A BANK

The essential element of a confidence game, which distinguishes it from mere robbery, is that it can't succeed without the willing participation of the victim. He must, literally, put his money in the con man's pocket. The victim's motivation is greed or some other vision of sugarplums dancing in his head. What we have in Empire of Deceit by Dean Allison and Bruce B. Henderson (Doubleday, $17.95) is an account of probably the biggest confidence game in sports history.

This is an article from the Feb. 18, 1985 issue Original Layout

From the late 1970s through early '81, more than $20 million was embezzled from the Wells Fargo Bank in California. Two Wells Fargo executives, who were high enough in the bank's hierarchy to do so without other authority, put the money in the pocket of boxing promoter Harold Smith (SI, Feb. 9, 1981 et seq.). Smith's "inside" man at the bank gave him more money in one day than Bonnie and Clyde stole in their lifetimes. Nobody else was aware of the scam, and it's entirely possible that the conspirators would have gotten away with it, had it not been for some minor slipups that led to their exposure.

If you can't understand how a con of this magnitude can succeed, do not be embarrassed. When two FBI agents, who spent a day at Wells Fargo for a briefing on how the con was pulled off, sent an explanatory telex to headquarters in Washington, they received the following reply: "Rewrite message. Director does not understand." A lot of others didn't either. Muhammad Ali, who allowed Smith to set up a company using Ali's name in return for payments by means of Wells Fargo cashier's checks, was asked by a reporter what he thought of Smith's dealings. "I saw him with all those beautiful girls, planes, boats," Ali said. "I used to say, 'You sure everything's O.K., Harold?' He always said everything was fine.... I still don't know where he gets his money. I'm still wondering...."

Why wouldn't Smith have said everything was fine? Whenever he wanted a couple of hundred thousand, he called one of his pals at the bank and got it pronto. One time Smith had to wait all of 10 minutes in the bank parking lot for a rush-order check for $223,000 made out to Ali, whose lawyer insisted on the payment before Ali would fly off to Australia on a Smith promotion. (Needless to say, Ali wasn't involved in the embezzlement in any way, though he did receive about $500,000 of Wells Fargo's money.)

How the con was pulled off and how the money was spent—the FBI accounted for all but seven cents of the $21,305,705.18 embezzled—is the subject of Empire of Deceit. If high-rolling white-collar crime is your cup of tea, you'll love this book, because Harold Smith knew how to spend millions. True, he simply gave away a lot of loot to fighters and their agents in his effort to become the godfather of boxing, and the fighters loved him for it: "Looking at Harold, they saw a big dollar sign, which was just the way he wanted it. . . . They were like kids in a neighborhood candy store, and Harold Smith owned the store." Indeed, by January 1981 he had promotional contracts with Ken Norton, Gerry Cooney, Thomas Hearns, Aaron Pryor, Michael Spinks and Wilfred Benitez, among others. Beyond that, his extravagances in his own behalf—luxury junkets, "slinky women," drugs and other forms of amusement—are still being talked about in sporting circles. There is a tantalizing suggestion that Smith pulled off a betting coup with racehorses at two California tracks, but the affair is not pursued by Allison. Otherwise, Empire has all the inside info because Allison was the federal prosecutor in the Wells Fargo case. While writing the book, he had at his fingertips not just the facts, gathered by an army of FBI men and other investigators, but also the results of official inquiries about what nearly everyone involved was thinking, feeling and planning over several years. Rarely has a crime been retold in such overwhelming detail, all of it fascinating.

Allison's status has led to a few comparatively minor annoyances for readers. He has written about himself and his direction of the prosecution in the third person throughout—"Allison was mildly surprised"; "On all three fronts, Allison had problems"; etc. This makes the reader feel he's at the center of what's going on, but it often results in awkward narration. Allison doesn't hesitate to congratulate himself on his investigative strategy and prosecutory cunning and their results, and he feels you should know that he's a pretty good guy, generally. He "never bragged about his undefeated trial record"; he "wasn't afraid to take his best shot and live with the consequences"; he "tried to steer clear of office politics and gossip." A third party might have put some of this differently, if the material was used at all.

Nevertheless, this is Allison's story, and if it sometimes reads like an FBI press release, he's obviously a sincere admirer of the bureau's work in this case and isn't trying to con you. He gives candid accounts of the methods the FBI used, verbatim transcripts of grand jury and trial testimony and a well-organized and well-documented narrative of the intricate effort that finally put the con man and his helpers in jail.