Money Week - UK (2021-10-08)

Profile 37

moneyweek.com 8October 2021 MoneyWeek

Great frauds in history... Rowland Stephenson’spersonal bank

RowlandStephensonwas born

on ashipsailingbetween

Britain andAmerica in 1782. His

father wasamerchantfleeing

Flor idaafter an atta ck by

Spanish troopsduringtheWar

of Independencedestroyedhis

busi ness supplying Briti sh

ships.After attendin gEton,

Stephensonworked for the

familybank,Remington,

Stephenson&Company,rising

fromgentleman clerkto

partner. He became theMPfor

Leominsterin1 827whenthe

candidat ewho haddefeated

himwas controversi ally

disqualified.Anoted

philanthropist, he wasalso

thetreasurerofSt

Bartholomew’s hospital.

Whatwasthe scam?

Followinghis wife’s deathin

1821,Stephensonbegan

splashingout on entertainment

andcollecting art. He invested

in theLondonColosseum, a

building in Regent’s Park,and

gotthe bankto underwrite the

project. With personalfunds

startingto runlow,Stephenson

borrowedfromthe bank in

greaterand greateramounts,

altering thebooksto hide what

he wasdoing .Hedippedinto

theaccounts of clients, taking

moneyfromother clientsto

satis fydemandsfor repayment.

Whathappened next?

Despiteofferingahigherrateof

interest than itscompetitors,

rumoursaboutthehealthof

Remington, Stephenson &

Companyled to itsreserves

beingdepleted. Meanwhile,

Stephenson’spartn erswere

angr ywithhis sl oppy record

keepingand thedecision

to underwritethe Regent’s

Park project. Unable to repay

themoney he had“borrowed”,

andrealising that thebank

wasnow doomed,Stephenson

stole alarge amount of bank

securiti es andcashed them

in,beforefleeing to America.

He waseventually caught

by bounty hunters in New

York,but Americancourts

forced hisrelease andhe

spentthe rest of hislifeinthe

United States.

Whatwasthe aftermath?

It is estimated Step henson’s

fraudsamounte dtoaround

£260,000 (£22.7mintoday’s

money),aquarter ofwhich

came from outstandin g“loans”,

£80,000 from hispersonal

clients, andthe rest s tolen

when he fled,suggestingthat

much pain wouldhavebeen

avertedhad thepartners swiftly

removedhis accessto the

bank’s accounts.One of

Stephenson’scousins,who was

workingasaclerk,admittedhe

haddiscovered discrepancies of

arou nd £1,000 as earlyas1826,

but allowedthemtocontinueas

long as Rowlandeventually

repaid his“loans”,allowing

them to keep growing.

BernardTapie,whohasdiedaged 7 8,wasacolourfulFrenchentrepreneur,starofscreenandstage,

politician,sportsicon,pressbaronandconvictedfelon.Itwasaroller-coasterlife,saysJaneLewis

The man with a thousand lives

Famedforhistanandbouffant
hair,BernardTapie,who
hasdiedaged 78 ,wasbyfar
France’smostglamorous
businesstycoon:admiredeven
bydetractorsforhisderring-
do.“HalfCountofMonte
Cristo,halfJeanValjean”
(heroofVictorHugo’sLes
Misérables),he“wrotehisown
legend”,saysLeFigaro.“No
onecoulddictatehisconduct,”
andhiscareer“mirroredthe
contradictionsandfracturesin
France’sownhistory”.ForLe
Monde,Tapiewassimplythe
man“withathousandlives”.
Shrewdentrepreneur,star
ofscreenandstage,politician,
sportsicon,pressbaron...
“theelephantintheeulogies”
followingTapie’sdeath,saysThe
Guardian,“washisrecurring
relationshipwithFrenchjustice”

• notablyconvictionsforfootball
  match-fixingandtaxfraudthatsawhim
  jailed forseveral monthsinthe mid-1990s.
  But, as he lateradmitted, “the biggest”of
  all the“stupid mistakes”was the“Adidas
  controversy”–acomplex legalbattlethat
  beganin1993, becameanationalobsession
  and“poisonedthe lastdecades” of hislife.

The money years
Tapiehad “a gift forself-promotion andnot
alittlecharm”, says theFinancialTimes.He
made hispost-prison comeback as an actor,
playingapoliceinspectorinthe popularTV
seriesValenceandgetting rave reviewsfor
histheatre debutasthe lead inOne Flew
OvertheCuckoo’sNest.Despite hisleftish
politicalleanings, he becameasymbol of
what theFrenchcall“les années fric”(the

moneyyears)–widelyadmired forpulling

himself outof apoorchildhood to become

oneofthe country’srichest men.

Born in1943,Tapie grewup poorbut

“happy”inaworking-classsuburbof

Paris. OnleavingschoolhesoldTVs,sang

in Parisclubs anddreamed of becoming

apop star or aracingdriver, says The

Guardian.Buthediscoveredanequal talent

forbusiness and,by thetimehewas 30,

hadmadeafortuneacquiringand turning

roundbankruptcompanies.Feted through

the1980s,Tapie spentmillions on status

symbolsthatindulgedhis loveof sport,

saystheDailyMail.Hewas an idolised

club president ofthefootball club Olympic

Marseille from1986 to 1994 andhis

cyclingteamwon twoTours de France.

Onthebackofthatsuccess,

Tapiewentintopolitics,saysthe

FT.His“fearlesstakedown”

ofthefar-rightJean-Marie

LePenin 1989 caughtthe

eyeofPresidentFrançois

Mitterrand,whomadehima

minister.Ridinghigh,Tapiewas

meanwhilestaging“hisgreatest

businesscoup”–revitalising

theGermansportsweargiant

Adidas,whichheacquiredin

1990 .Itbecame“hisbiggest

nightmare”.In 199 3,Tapiesold

outtoCréditLyonnaistoavoid

apoliticalconflictofinterest.

Whenthepart-state-owned

bankthenflippedthecompany

fordoubletheprice,hesued.

“What haveInot done?”

It wasthe startofalegal roller-

coasterthatwouldseehim

triumphin2008, whenawarded

€403mindamages frompublic

funds (causing an outcry) –and then crash

in 2015 when that decisionwas reversed

andhewas orderedtopay themoneyback

–“Iamruined. Ruined.” –amidallegations

of fraud. Tapiewas acquittedofthatin

2019,but thecasecontinues to reverberate

around theFrenchestablishment.

OneofTapie’smostinspiring attributes,

says TheGuardian, washis resilience.

When knockeddown, he gotupagain.

“Hetookthe blows androlledwiththe

criticism.”Monthsbeforehisdeath he was

badlybeatenup during aviolentburglary

at hismanor housenearParis. Heaccepted

that,and thecancerthateventuallykilled

him,philosophically. “WhathaveInot

done?” he said in a2017interview.“Ican’t

sayIhaven’tbeenspoiled rotten by life.”

“He wasawarded €403m in damages

and wasthen ordered to pay it back.

‘I am ruined,’hesaid. ‘Ruined.’”

©G

etty

Images