Pyramid Scheme

Men boasting CIA and FBI ties met in Newport Beach to convince a mysterious billionaire to buy into a secret economy, and nothing was what it seemed

Pyramid Scheme

The third Monday in May 2006 in Newport Beach was a beautiful day, even by Orange County's springtime standards. An occasional, light Pacific Ocean breeze made the 70-degree temperature more pleasant under a royal-blue sky with good visibility. At the Marriott Hotel, eager, college-aged valets huddled near a gurgling water fountain and waited to park arriving luxury vehicles beneath a series of towering palm trees. Vacationing families and couples flocked to the outdoor pool. The big local question of the day: What to do about rowdy sea lions that boarded and almost capsized a sailboat in Newport Harbor?

But not everyone's thoughts inside the swank Fashion Island hotel were on leisure and sea mammal antics. Four outwardly unremarkable, stern-faced men marched down a hallway on their way to a high-stakes drama. Though they controlled hundreds of billions of dollars, you've never seen them on a Forbes list. These men—who'd flown in from different parts of the North American continent—were members of the world's most exclusive club, veiled in secrecy by the CIA, FBI, Federal Reserve, U.S Treasury Department and international banks. They often spoke in code, rarely met in person and only reluctantly told outsiders their names: William Joseph Ferry, John Brent Leiske, Alex Chelak and Paul R. Martin.

Like any truly secret society, details were shared only on a need-to-know basis. There were 18 members: six attorneys, six accountants, five bankers and a mechanical engineer. Half of them worked in the private sector, and half of them worked within the federal government. They had offices in Geneva, New York City, London and Hong Kong.

Jesse Lenz
John Brent Leiske
John Brent Leiske

The organization was established in the early 1990s with two goals. It aimed to protect U.S. financial interests, specifically the strength of the dollar, from malignant foreign forces such as Chinese communists or Middle East terrorists, while exporting the notion of American exceptionalism by funding humanitarian projects around the world. Because of the sensitivity of their work, high-tech eavesdropping equipment on orbiting government satellites and undercover, federal agents on the ground monitored their daily lives.

They were enthusiastic, God-fearing patriots, as well as unapologetic capitalists. As a reward for their services, they took a financial cut—sometimes $100 million or more—from every project, whether it was in Ethiopia, Houston or Southeast Asia. By design, transactions were kept on the other side of a "curtain" from frontline IRS agents, tax-happy federal policymakers and snooping journalists. Members of this organization firmly believed in their righteousness, but they also worried about being exposed on 60 Minutes.

As they walked to the Marriott's Emerald Cove conference room, these men—ages 46 to 64—donned the uniform of businessmen unable to completely relax: blue blazers, button-down shirts and khaki pants. The sweet strumming of a guitar playing Caribbean-style music on hallway speakers didn't soothe anyone's anxiety. They'd told George T. Tarpinski, the man they were meeting for the first time, not to bring his bodyguards because they weren't bringing theirs. They were on the verge of a risky proposition: granting Tarpinski, a mysterious outsider, admittance into their secret world. But there was also substantial potential reward—more than $1 billion in cash was at stake, or, as they liked to say, "One B" or "One bravo."

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Tarpinski looked like Will Ferrell's Saturday Night Live spoof of George W. Bush. In addition to wearing his short, dark-but-graying hair like Bush, the 52-year-old San Francisco native also shared his snort, smile and swagger. Tarpinski wasn't a man who liked intellectual rigor. The fabulously rich investor favored golf over work, a preference evidenced by a deep tan. Whenever business negotiations turned hostile, he'd flash his toothy smile and crack a lame joke to break tension. Like the 43rd U.S. president, he was a cocky trust-fund baby.

At Stanford University in the '70s, Tarpinski studied international affairs (there's no record of his graduation) and, to hear him tell it, later began "aggressively investing" in California and international real-estate projects. Potential business associates couldn't pry details from him, but his success was evident. He worked out of an office on a fashionable section of Pacific Coast Highway in Newport Beach, and though he didn't like boats, his mansion overlooked Lake Tahoe in Nevada.

Tarpinski's life had been carefully kept from public view. A Google search, for example, produced only his ties to a corporation, New MarMesa Group. It wasn't clear, at least in obtainable records, if he was married or single. But based on his rugged face and the size of his wallet, he'd never had a problem getting dates.

Ferry, Leiske, Chelak and Martin knew two other facts. Tarpinski was one of the world's richest men, and he craved more money, especially if future profits evaded tax implications. They'd also discovered that Tarpinski had a blazing temper when annoyed. Worried the group was trying to sucker him, he'd once yelled on the telephone at one of its Florida associates. The incident alienated the men, who toyed with the idea of rejecting his application before Tarpinski apologized.

But concerns lingered. In preparation for the Marriott meeting, the men insisted Tarpinski pass a background check by federal law-enforcement and espionage agencies. To help allay worries about his identity, he shared his American passport (#039620059) and transferred more than $1 billion—$1,000,399,934, to be exact—in cash into a Bank of America account in Los Angeles. When the men insisted on inspecting documentation of the transaction, he provided an official paper trail.

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