By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
By Michael Roberts
By Melanie Asmar
The reason he and his girlfriend couldn't keep their court appointments? Sometime in 1987, they had fled to New Zealand.
It was to be the first time that the Colorado attorney general's office had ever tried to extradite someone from another country -- and it would show.
The first step was to locate as many of the victims as possible and send their affidavits to the U.S. Department of Justice in Washington, D.C., which turned them over to the U.S. State Department, which then sent them to the equivalent agency in New Zealand. For an affidavit to be valid in Colorado, it must be signed on the last page by the witness and by a judge, which is exactly how Oldham, who is now a deputy district attorney in Jefferson County, prepared them. But under New Zealand law, each page of an affidavit must be initialed in blue ink by the witness and labeled as an exhibit, then signed on the last page by both the judge and a clerk.
When the prosecutor in New Zealand -- called a crown solicitor -- saw in 1989 that the exhibit notes were missing, he sent them back to the Colorado attorney general's office to be redone.
After the witnesses were called back in to initial their affidavits and the exhibit notes were affixed to the papers, the bundle -- literally a foot tall, tied with a red ribbon and sealed with a heavy gold stamp -- was sent back through the chain of command in Washington and then on to New Zealand.
In December 1989, when the judge in New Zealand discovered that the bundle had been sent back to the United States without his approval, he dismissed the case without prejudice, leaving the door open for future litigation but slamming it shut for the moment.
But Oldham left the attorney general's office in early 1990, and later that year, the office itself had to relocate because its seventh-floor space at 1525 Sherman Street was laden with asbestos. During a temporary move to the Petroleum Building, at 110 16th Street, some of the boxes that contained the actual checks and original statements from Schlaks's accounts were inadvertently thrown out. "There are 175 lawyers in the attorney general's office, and the case was six years old at that point. No one was paying attention to it," says senior assistant attorney general Reichman.
Since banks often only keep records for a maximum of seven years, most of their copies also had been destroyed. (Schlaks's financial trail would have to be pieced back together several years later.)
At the time, Reichman was district attorney for the City of Durango; he wouldn't learn about any of this until December 1992, when he started his new job at the state attorney general's office. "I am painfully anal, and when I was given the office and file drawers and I saw this bundle of papers, I said 'What's this?'" he remembers. "Turns out it's an extradition case, and I have to reinvent all of this and make contacts in Washington. I had never done an international extradition case, and I soon realized how overwhelming it was. And the only one there to work on it was me, me, me. It had a lot of dust on it, but it wasn't going to go away. Phil Feigin was impassioned about it. He was always reminding me to do something about it and reminding me that Jay was still out there."
Reichman spent his spare time over the next three years trying to understand securities fraud and familiarizing himself with the case. Then, in the fall of 1995, he got a call from an FBI agent bearing bad news. Schlaks and his wife had applied to be residents in New Zealand. Before the country grants residency, however, it contacts the courts in the immigrant's country of origin "to see if they're a Ted Bundy or a Mother Teresa," Reichman says. New Zealand officials found that there were federal "unlawful flight to avoid prosecution" warrants out for the Schlakses. But before the warrants could be enforced, the FBI needed to obtain the warrants in the state from which the fugitives had fled. The FBI agent could not find the warrants in Colorado, even though a Colorado judge had issued them years before.
Reichman found that, in fact, the warrants had been quashed two years earlier during a routine housecleaning. Every year, judges in Denver District Court hold a "docket day," in which old cases are reviewed to determine whether they should remain active. Since more than 90 percent of the state's criminal cases go through the district attorney's office, the judge who came across the nine-year-old file in 1993 must have assumed it was one of those, Reichman guesses. And when no one from the DA's office responded to the judge's inquiry, it must have been dismissed, and whatever arrest warrants were associated with it disappeared as well.
"We're not trying to blame anyone," Reichman says. "That's just what we think happened. All we know is that the case never made it back here, and so it was dismissed."