A Word to the Wise

Colorado has always been quick to forgive--and forget.
In the midst of the current economic boom, with houses selling within a day for more than their asking price and the daily papers offering cash signing bonuses for new delivery people, it's hard to remember just what a bust Colorado was in the late Eighties, when you couldn't give houses away and building a giant airport 25 miles away from downtown seemed like a dandy public-works project.

But some people still made out like bandits--because that's exactly what they were. The scofflaws who brought us Silverado Banking Savings & Loan, for example. In the time-honored tradition of the Soapy Smiths who conned Coloradans a century before, the Silverado gang took the money, borrowed against it and ran, leaving behind a billion-dollar tab that the taxpayers would ultimately pick up.

The gang included erstwhile developer Bill Walters, at one point such a pillar of the community that he headed the Denver Chamber of Commerce back in the days when a chamber-produced promotional piece compared Denver to Oz--an analogy that was truer than anyone in the audience dreamed at the time. But Walters soon skipped out from behind the curtain, moving himself to California and whatever assets he still possessed under his new wife's name. And there was Silverado boardmember Neil Bush, the dyslexic oilman son of the soon-to-be president, whose name opened doors--and also staved off the feds until the day after Daddy was safely elected, when Silverado was finally seized by the government. (Even after the sins of Silverado became common knowledge, Colorado was quick to forgive. When a TV producer came to town researching a story on Neil Bush's breach of professional ethics, he looked hard to find an independent oilman willing to be critical of little Neil's business dealings--and that interview abruptly ended when the producer discovered that the independent oilman was in the process of becoming an independent oilwoman. That just wasn't going to play on national television, the producer determined.)

But the true ringleader of the Silverado gang was Michael Wise, the director of the S&L who pulled the strings and played Coloradans for the suckers we all were.

In 1988, when the feds finally got around to finishing their politically postponed investigation of Silverado, they accused Wise of bilking investors out of nearly a million dollars, some of which he used to remodel his house and some of which he used to pay off another bank loan. Compared to the billion bucks taxpayers would have to fork over to cover Silverado's bad investments, the charges against Wise were penny-ante. And he was acquitted of even those.

He'd lost the prestigious job and the big house, of course, and after the trial, he'd even had to pay off his lawyers with two sets of sterling silverware. So Wise retired to lick his wounds--in Aspen, naturally, where notoriety of any kind is a valuable commodity. And by 1991, he was back in business, setting up Cornerstone of Aspen Ltd., an investment company specializing in real-estate loans.

Even rich Coloradans are quick to forgive and forget. Soon investors were lining up to entrust Wise with their millions. By 1997, his track record was so impressive that Wise went into business with Aspen millionaire Tom McClosky--after first agreeing to take a test by an industrial psychiatrist (he passed) and to close out his old Cornerstone accounts in favor of the new venture, Cornerstone Private Capital (he didn't).

Unlike other residents of his adopted state, Wise never forgot a trick. As it turned out, he was "overfunding" Cornerstone loans, skimming off the extra cash and stashing it in his own private accounts.

After all, life in Aspen wasn't cheap. Wise was paying $15,000 a month for the home in Starwood that he shared with his children. (His wife had died in 1996, of what was officially "positional asphyxiation" but looked mighty suspicious: Her head was wedged between the bed and the nightstand, which cut off her air supply.) In fact, he met McClosky through their kids' soccer games.

In September 1998, the feds were finally alerted to the fact that Wise was up to his old tricks when an investor searching for her nonexistent account discovered that Wise had put her million bucks into his own account. According to the FBI, Wise was also "soliciting and receiving from investors more money than was needed to make the loans. He then converted the excess funds to his own use."

All told, between May 1995 and the fall of 1998, Wise had embezzled close to $9 million in cash. Finally caught, Wise readily admitted his sins--and even offered to stay on at Cornerstone in an attempt to earn back the money he'd stolen. Cornerstone declined the offer. The U.S. Attorney slapped Wise with two wire-fraud charges.

Ever the dealmaker, Wise kept talking.
And as a result, last Friday the dapper Wise and his lawyer showed up in federal court to offer a guilty plea on both counts in exchange for any potential state or Pitkin County charges being dropped.

When Wise is sentenced in July, he could get up to ten years. But he won't.
He's also supposed to pay back the people he embezzled from. But he won't.
Colorado is quick to forgive--and forget.

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