Take the Money and Run

Page 4 of 7

On December 20, 1984, the Colorado Attorney General's Office filed People v. Jay Schlaks and set about prosecuting him on 29 criminal counts ranging from theft to fraudulent and prohibited practices. Shortly after that, however, Schlaks fled to Florida, where he got into trouble for operating another scam. This time, he was reportedly trying to sell people coins that he claimed were made with gold salvaged during the restoration of the Statue of Liberty (which, incidentally, is cast in bronze). For reasons that are not fully understood by the Colorado prosecutors, Schlaks was never charged in Florida.

For eighteen months, Frank Oldham of the attorney general's office tried to extradite Schlaks back to Colorado to face his criminal trial. Finally, in July 1986, he succeeded. Schlaks was arrested but quickly freed on bond. He waived his right to a preliminary hearing, and the case was turned over to Denver District Court for trial. But on July 14, 1987, the first day Schlaks was to appear in district court to hear the charges against him, he failed to show. Schlaks's girlfriend and co-defendant, Rebecca Romero (who would later become his wife), was also missing.

Schlaks was also scheduled to be in New Mexico, where a Taos jury had found him guilty of fraud in a related case; before coming to Colorado in 1982, Schlaks had applied for credit so he could buy office equipment for another company, First Territorial Mortgage of New Mexico. His reference for the loan was someone named "Becky" at the New Mexico Land Bank. The bank, however, turned out to be a fake set up by Schlaks.

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."

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Julie Jargon
Contact: Julie Jargon