Catching the Wolf of Wall Street: More Incredible True Stories of Fortunes, Schemes, Parties, and Prison

CHAPTER 27

THE BUZZWORD IS IRONY

he next morning I was lying in bed watching the Financial News Network, when a blond anchorwoman mentioned something about a severe “down opening” for this morning's NASDAQ. There was a massive order imbalance, apparently, with an unfortunate bias toward the sell side.

No big deal, I thought. The blonde is probably overreacting, and even if she's not, it doesn't matter anyway. After all, markets rise and markets fall, and a savvy trader can make money in any market. My plan was foolproof:

With the quarter million dollars I still had left, I would trade the high-flying NASDAQ with Wolf-like precision and make a small fortune in the process. The NASDAQ had more than doubled over the last twelve months, and who better than the Wolf himself to take advantage of the greatest speculative bubble since 1929? It would be like shooting fish in a barrel.

Alas, fate had different plans.

By 9:30 a.m., the NASDAQ was down more than four percent, and two days later it was down another five. By April Fools’ Day, it had lost more than twenty percent, and the joke was on me. The dot-com bubble had finally burst, and it would continue to deflate (at an unpredictable rate) for the foreseeable future. And, yes, while it was true that a savvy trader could make money in any market, he couldn't do it with limited resources, lest he be wiped out with a single bad trade. So I abandoned my foolproof plan before I started it.

Meanwhile, KGB and I had gotten along fine and dandy while I “sit in jail,” as she so phrased it, but now that I was out, things had become tenuous. Of course, the sex was still great, but the conversation was minimal. By the third week in April, I was certain that we had no future together. It was plainly obvious; in fact, it was so plainly obvious that on April 17—which was KGB's birthday—I got down on one knee and proposed to her. With a sinking heart, I said:

“Will you marry me, maya lubimaya, and be my third lawfully wedded wife?” What I didn't say (but what I knew would be true) was: “And do you promise to torture me and drive me crazy, and to make sure that I remain the most miserable man on the planet until death do us part?”

Not being able to read my internal thoughts, she quickly answered, “Da, maya lubimaya, I will be wife,” to which I slipped a seven-carat, yellow canary diamond in a platinum setting on her slender Soviet ring finger and took a moment to regard it. Oh, it was gorgeous, all right, and it was also very familiar; in fact, it was the Duchess's old engagement ring, which I'd managed to maintain possession of during the split.

Was it bad luck? I wondered. I mean, it wasn't every day a man asked a woman to become his third wife and then slipped the ring from his last failed marriage onto her finger as a sign of his love and affection and commitment to permanence. Still, I had my reasons, not the least of which was that I hadn't been sure what to get her for her birthday. (Not to mention the fact that a birthday present would have set me back a pretty penny, and I was trying to play things close to the financial vest.)

But when I called George and tried to explain all this to him, he blew up at me. “What the fuck is wrong with you?” he sputtered. “You could have sold the thing for a hundred grand, you numbskull!”

Blah, blah, blah! I thought. KGB had stuck with me through thick and thin, so I owed it to her to get married, didn't I? Besides, what about her status as the first, last, and only Miss Soviet Union in that now-defunct nation's history? That counted for something! Then George said, “Anyway, she doesn't even get along with your children, so it'll never work.”

Whatever. Worse came to worst, I would just get divorced again.

Meanwhile, the Duchess was being unusually nice. Within three weeks of the kids leaving New York, she already had them back for another visit. Moreover, she had agreed to let me have them for the entire summer. The only problem was: How could I keep them entertained in a Eurotrash-infested Manhattan apartment building while I was locked up under house arrest with an emotionally disconnected fiancée by my side who couldn't say the word the? It would be difficult. What with no front lawn to run around on or swimming pool to swim in or beach to build sand castles on, they would be bored to death. Not to mention the fact that on the island of Manhattan it would be a hundred ten degrees and a thousand percent humidity! How could the kids survive in that? They would wilt like tiny sunflowers in the Gobi Desert.

The city was no place for children—especially in the summer! Everyone knew that—especially me. All their friends would be in the Hamptons. How could I disappoint them again? I had put them through enough hell as it was. Yet it would be obscenely expensive to rent a place in the Hamptons, and I was trying to conserve funds. If only the NASDAQ hadn't crashed!

Once again, however, George had a solution. He called me from his cell phone while standing in a sand trap on the sixth tee of Shinnecock, and he said, “I got the inside scoop on a fifteen-acre estate in Southampton. The owner is some pint-size German prince who's long on title and short on cash, so he's looking to rent the place cheap.”

“What's the place look like?” asked I, the choosy beggar.

“Well, it's not Meadow Lane,” he replied, “but it's still nice. It's got a pool, a tennis court, a huge backyard. It's perfect for the kids. You've even got deer running through your backyard!”

“How much?” I asked cautiously.

“A hundred and twenty grand,” he answered. “It's a steal, considering. The place looks like a Swiss hunting lodge.”

“I can't afford it,” I said quickly, to which George even more quickly replied, “Don't worry; I'll pay the lease up front for you. You can pay me back when you're rolling again.” Then he said, “You're like a son to me, Jordan, and you could use a break right now. So take it, and don't look a gift horse in the mouth.”

At first, my masculine pride urged me to resist George's generosity, but only for a second. The place would be perfect for the kids, and George was, indeed, like a father to me. Besides, to a man as rich as he (a man as rich as I used to be), a hundred twenty grand was nothing. At that level of wealth, money was merely a book entry on a balance sheet; you got more joy from helping people with it than watching it collect four percent in the Bridgehampton National Bank. All you wanted in return was love and respect and, of course, gratitude, all of which I already felt for George. Besides, one day I would pay him back, after I became rich again.

So I packed my bags and moved back out to the Hamptons. I felt like a fucking Ping-Pong ball! Then I received an astonishing phone call from Magnum. It was early June now, and I took the call in my new sprawling living room, which, as George had indicated, looked like a hunting lodge. Magnum said, “I thought you'd like to know that Dave Beall got indicted today for securities fraud. He was arraigned this afternoon in front of Judge Gleeson.”

With a sinking heart, I sat down on a distressed leather love seat. Above me hung a giant dead moose's head. The dead moose looked outraged. “Indicted?” I muttered. “How could he get indicted, Greg? I thought he was cooperating!”

“Apparently not,” Magnum answered, and then he went about explaining how Dave Beall hadn't actually ratted me out; rather, he had gotten drunk as a skunk and then told one of his buddies about the note. His buddy, as it turned out, was a rat in OCD's ever-expanding rat stable. And the rest, as they say, was history.

The kids spent the summer in Southampton and had a ball, and then, the day they left, Elliot Lavigne was indicted for securities fraud. He blamed it all on me, of course, which was rather ironic, I thought, considering that I had once saved his life in what I now considered a momentary lapse of judgment. In truth, I was still glad that I had saved his life, because for the entire week afterward everyone was calling me a hero, but now, half a decade later, Elliot was facing five years, and I didn't give a shit.

The Chef, however, was a different story; I did give a shit about him.

In what would seem like the greatest irony of all, the Chef decided to defy the conventional logic and wisdom and take his case to trial. But why? With the videotapes, the audiotapes, my testimony, Danny's testimony, James Loo's testimony, and the airtight paper trail of my Swiss cover-up—which was laden with the Chef's slippery fingerprints—as well as his two spectacular renderings of his submarine, the SS Money Launderer, he had absolutely no shot of being acquitted. He would be found guilty as charged and be put away for the better part of a decade.

For my part, I would suffer the public humiliation of having to testify in open court against a man whom I had once called a friend. It would be in the newspaper, in magazines, on the Internet, everywhere. And how ironic it was that what I had done with Dave Beall would go down in history as nothing more than a tiny footnote, a minor offset to a dozen acts of betrayal.

At this moment, I was sitting in the debriefing with Alonso and OCD, laughing inwardly after OCD had just said, “You know what, Alonso? You got the worst case of OCD I've ever seen!”

“What are you talking about?” snapped Alonso. “I'm not OCD! I just want to make sure the transcripts are accurate.”

“They are accurate,” OCD shot back, shaking his head in disbelief. “I mean, do you really think the jury gives a shit whether Gaito said, ‘Badabeep, badabop, badaboop’ or ‘Badabop, badabeep, badabing’? They're both the same, for cryin’ out loud! The jury knows that!”

Alonso, who was sitting to my right, turned his head toward me ever so slightly and flashed me a knowing wink, as if to say, “You and I both know this is important, so pay no mind to the sputterings of this FBI thug!” Then he looked at OCD, who was sitting on the other side of the conference table, and said to him, “Well, Greg, when you go to law school and pass the New York State bar exam, then you can be in charge of the tape recorder!” He let out a single, ironic chuckle. “But, until then, I am!” Then he pressed the rewind button again.

It was close to eleven p.m., and the Gaito trial was less than a month away. For six weeks now, since just after Labor Day, we'd been working into the wee hours of the morning, trying to “nail down” the transcripts. It was a painstaking process, during which the three of us would sit in the subbasement of 26 Federal Plaza and listen to the tapes and make corrections to what were rapidly becoming the most accurate transcripts in the history of law.

Alonso was, indeed, a good man, despite being so tightly wound that I was certain one day he would take one too many deep troubled breaths and simply stop breathing. Everyone called him Alonso. For whatever reason, he was one of those people who were never called by their first name. While I had never had the pleasure of meeting Alonso's parents (wealthy Argentine aristocrats, according to Magnum), I was willing to bet that they'd also called him Alonso since the moment he emerged from his mother's loins.

Alonso hit the stop button and said, “Okay, now turn to page forty-seven of transcript seven-B and tell me what you think of this.”

OCD and I nodded wearily, and we leaned forward and began thumbing through our four-inch-thick transcripts, while Alonso did the same. Finally, when we were all on page forty-seven, Alonso hit the play button.

All I could hear at first was a low hum, then a crackling sound, and then my own voice, which always sounded strange to me when I heard it on tape. “… the risk is of James Loo smuggling my million dollars overseas,” my voice was saying. “What if he gets stopped at Customs?”

Now came the Chef's voice: “Eh, whaddaya whaddaya? Don't worry about it! He's got his ways, James. All you gotta know is that the money's gonna get there. You give it him, he gives it to his people, and badabeep badabop badaboop… schhhwiitttt”—a sharp clap of the Chef's hands!—”it's all done! There's no—”

Alonso hit the stop button and shook his head slowly, as if he were deeply troubled. OCD rolled his eyes, preparing for the pain. I braced myself too. Finally Alonso started muttering, “ Schhhwiitttt—he keeps using this word.” He let out one of his trademark deep, troubled breaths. “I don't get it.”

OCD shook his head and sighed. “We've been through this before, Alonso. It just means ‘that's all she wrote.’ Like, schhhwiitttt! That's all she wrote.” OCD looked at me with desperation in his eyes. “Right?”

“Pretty much,” I said, nodding.

“Ahh, pretty much,” declared Alonso, raising his finger in vindication, “but not always! Depending on the context it could mean something different.” He looked at me and raised his eyebrows. “Right?”

I nodded slowly, wearily. “Yeah, it could. Sometimes he uses it when he's looking to tie up the loose ends of a cover story. Like, he'll say schhhwiitttt to mean: And with that latest phony document we've created, the government will never be able to figure things out!’ But most of the time it means just what Greg said.”

Alonso shrugged noncommittally. “And what about the clapping sound? Does that affect the meaning of the schhhwiitttt?”

OCD sagged visibly, like an animal that'd just taken a bullet. “I gotta take a break,” he said, and without another word he left the debriefing room, closing the door gently behind him, muttering something under his breath.

Alonso looked at me and shrugged. “Tough times,” he said.

I nodded in agreement. “Yeah, especially for Gaito. I still can't believe he's taking this to trial. It makes no sense.”

“Nor to me,” he agreed. “I don't think I've ever seen a more airtight case than this. It's suicide for Gaito. Someone's giving him some very bad advice.”

“Yeah, like Brennan,” I said. “It's gotta be.”

Alonso shrugged again. “He has something to do with it, I'm sure, but it's gotta be more than that. Ron Fischetti is one of the best defense lawyers in the business, and I can't believe he would let Gaito go through with this just because Brennan told him so. I feel like I'm missing something here. You know what I'm saying?”

I nodded slowly, resisting the urge to tell him what I truly thought—that the Blue-eyed Devil was going to try to bribe one of the jurors. And that was all Gaito needed: one juror to hold out, and then Gleeson would be forced to declare a mistrial.

Of course, I had no proof of this, but stories like this had swirled around the Blue-eyed Devil for years—disappearing files, witnesses recanting testimony, judges making surprise rulings in his favor, prosecutors quitting on the eve of trial. But I kept those thoughts to myself and said, “My guess is that Fischetti is gonna try to focus on me, not the facts. Like, if he can get the jury to truly hate me or, better yet, to literally despise me, then they'll acquit on general principles.” I shrugged. “So he's gonna try to paint me as a drug addict, a whoremonger, a compulsive liar, a born cheater— you know, all the good things in life.”

Alonso shook his head. “He won't get the chance, because I'm gonna do it first. And don't take it personally when I do; I'm going to be pretty tough on you when you're up there. I won't pull any punches, especially when it comes to your personal life.” He cocked his head to one side. “You know what I'm referring to?”

I nodded sadly. “Yeah, what happened on the stairs with Nadine.”

He nodded back. “And what happened afterward too, with your daughter. I'm gonna bring up everything—all the dark stuff. And you can't try to minimize it or rationalize it. You just say, ‘Yes, I kicked my wife down the stairs,’ and, ‘Yes, I drove my car through a garage door with my daughter in the front passenger seat, unbuckled,’ because, trust me, if you do try to minimize it, Fischetti will rip you a new asshole during cross-examination. He'll say, ‘Oh, so what you're saying, Mr. Belfort, is that you didn't actually kick your wife down a flight of stairs, because she was only on the third step as opposed to the top. And, wait, forgive me, Mr. Belfort, you didn't actually kick her; you pushed her, which is a whole other story. So, to sum it up, what you're saying is that it's all right for a man to push his wife down three individual steps and then risk his daughter's life by throwing her into the passenger seat of his ninety-thousand-dollar Mercedes and driving through a garage door while high on cocaine and Quaaludes?’” Alonso smiled. “You get the picture?”

“Yeah, I got it, but I don't want it.”

“None of us wants it,” he agreed, “but those are the facts we're stuck with.”

I nodded in resignation. Alonso continued: “But, on the bright side, we'll get to spend some time talking about how you went to rehab and got sober. And then you can also bring up how you go to high schools now and give antidrug lectures to the kids.” He smiled reassuringly. “Believe me, as long as you're honest, it'll work out fine. Drug addiction is a disease, so people will forgive you for it.” He shrugged. “Now, if only whoremongering were a disease too, then we would really be in business!” He started laughing. “Funny, right?”

“Yeah,” I said, smiling—fucking hysterical! I would have to admit, under oath, to banging a thousand hookers of all shapes and sizes. The only question was if it would end up in the news paper. It was just the sort of tawdry gossip that the New York Post lived for.

Alonso reached into his pants pocket and pulled out a fresh pack of Marlboros and a cheap Bic lighter. “You know, I don't make it a habit of breaking the law,” he said, “but in spite of this being a smoke-free building I'm gonna light up anyway.” And he did just that, taking a rather shallow, halfhearted pull that so much as said, “I'm not really a smoker; I just do this when I'm stressed out.”

I remained silent and let him smoke in peace. I understood this was important—to be able to partake in a simple manly pleasure without being interrupted by idle chatter. My father, one of the world's all-time great smokers, had explained this to me on numerous occasions. “Son,” he'd say, “if I want to kill myself with these fucking cancer sticks, then at least let me kill myself in fucking peace, for Chrissake!”

Alonso smiled at me and said, “Sooo… how are you, Jordan?”

I cocked my head to the side and stared at him for a moment. “How am I?” I asked. “Are you being sarcastic, Alonso?”

He turned the corners of his mouth down and shook his head slowly. “No, not at all. I just want to know how you are.”

I shrugged. “Well, it's been a long time since someone's asked me that, so I need to think about it for a second.” I paused for about a tenth of a second, then said, “Uh, I suck! How you doin’, Alonso?”

He ignored my last few words and said, “Things will get better; you just gotta give it some time. After the trial is over, we can make a motion to get your ankle bracelet taken off.” A brief pause, then: “I'm sure Gleeson will approve it once he hears you testify. It definitely comes through how remorseful you are.”

I nodded. “Well, I am remorseful. More than you can imagine.”

He nodded. “I know that; I've been doing this long enough to know when someone's full of shit. But that aside, you still haven't answered my question.”

“About what: How am I?”

“Yeah. How are you?”

I shrugged. “I got problems, Alonso. I'm facing years in jail, I'm engaged to a woman I'm not in love with, I have no career path, my kids live on the other side of the country, I'm wearing a fucking ankle bracelet, I've betrayed my closest friends, they've betrayed me, and, to top it all off, I'm on the verge of running out of money and I don't have a way to make any more right now.”

“You'll be rich again,” he said knowingly. “I don't think anyone in their right mind would bet against it.”

I shrugged. “Yeah, well, you're probably right about that, but I won't be rich for a long time. I'm in the middle of a bad luck streak, and until it runs its course, there's nothing I can do. Anyway, my real goal here is to move out to California to be near my kids. That's it. I swore an oath to my daughter that I would do that, and I'm not going to let her down. I'd like to move out there before I get sentenced. You think that's realistic?”

“Yeah, I think it is. I'll do what I can to help you, but you have to be patient for a while. The next year is going to be hectic; there are trials pending, indictments looming; a lot of things are still up in the air. But there should be a window toward the end. From a logistical standpoint, though, I don't know how much sense it makes to move before you do your time. I mean, what are you going to do: rent a house and then go to jail right after you rent it?”

I smiled and winked. “You bet your ass I am! Before I go to jail, I want my kids to know that I officially moved out to California; this way, they'll know I'll be coming back there when I get out. And I want to spend my last night of freedom with them in a house that's ours, not in a hotel. And we're all gonna sleep in the same bed that night, one of them under each arm.” I paused for a moment, relishing the thought. “That's how I want to spend my last night of freedom.”

Just then the door swung open, and in walked OCD. He took a few suspicious sniffs and then looked at the metal wastepaper basket, where Alonso had tossed his cigarette. Then he looked back at Alonso and said, “So how far did you guys get without me? It's getting kinda late here.”

With great enthusiasm, Alonso said, “No, we're still in the same spot. We got sidetracked.” Alonso compressed his lips, suppressing a cackle.

I suppressed my own cackle as the last traces of color left OCD's face.

Unlike Law & Order, where the excitement is heart-palpitating and the tension is so thick you can literally cut it with a knife, the real-life happenings in a federal courtroom are quite the opposite. Judge Gleeson, for example, sits high on his bench, sometimes looking interested, sometimes looking bored, occasionally looking amused—but always in complete control. There are no outbursts or arguments or people questioning the wisdom of his decisions or anything that might cause him to rise out of his chair and lean forward over his vast desk and point his finger and scream, “You're out of order, Counselor! Now sit back down or I'm holding you in contempt!”

I testified for three days—three unremarkable days—during which I found Fischetti to be fairly competent, but not overly so. Oh, he looked pretty spiffy, in his $2,000 gray silk suit and fancy gray necktie, but that was about it. His lines of questioning seemed boring and long-winded. If I had been sitting in the jury box, I would have fallen asleep.

Alonso, however, had been brilliant: organized, eloquent, persuasive, thorough. He had left Fischetti nowhere to go but in circles, double-talking and triple-talking, and the more he talked, the guiltier his client seemed. Danny testified too, as did a handful of others, although just who and how many I wasn't sure. The less I knew, the better, explained Alonso. I was not on trial, after all; I was only a witness.

A month later, I was sitting in my Swiss hunting lodge beneath the outraged moose's head when a call came in from an even more outraged OCD. “It's a mistrial,” he sputtered. “I can't fucking believe it! How could that jury not convict? It makes no sense.”

“Did you poll the jury afterward?” I asked.

With disgust: “Yeah, why?”

I said, “Well, let me guess, there was only one holdout, right?”

Dead silence at first, then: “How the fuck did you know that?”

“Just a hunch,” I said. “And you want to hear my second hunch?”

“Yeah,” he replied cautiously.

“The holdout was that bastard in the front row, the one with the handlebar mustache, right?”

“It was, actually,” said OCD. “You're just guessing, though, right?”

“Not exactly,” I replied, and I told him my thoughts—namely, that while I had no proof of it, this very mistrial had the Blue-eyed Devil's fingerprints all over it.

“No shit!” he snapped. “You really think so?”

“Yeah, I really do. Again, I have no proof, but, I don't know—I mean, did you see Gaito just sitting there so calm, cool, and collected? He looked almost smug about the whole thing, and Gaito is not a smug man. If anything, he's humble. Maybe I'm crazy, but the whole scene just struck me as odd, especially that juror; he seemed disinterested, like he'd already made up his mind beforehand.”

OCD agreed—as did Alonso when I shared my thoughts with him a few minutes later, via conference call. Still, there was no way to prove it, and Alonso refused to investigate, considering it to be the act of a sore loser. Besides, he hadn't actually lost; a mistrial simply meant that Gaito would have to stand trial again, which he did, precisely six months later.

And during those six months, from December 2000 to May 2001, I burned through most of the cash I had left, as well as what little patience I had with KGB. She, I was certain, held me in as much contempt as I held her. Unfortunately, I'd never been good at getting out of relationships, and, apparently, neither was she. So we remained engaged, passing our days having angry sex and bitter arguments, the latter of which had to do mostly with moon landings and such.

Sadly, Gaito was convicted this time, with the jury reaching a verdict in only a single day. I was home when I got the news, and at that very moment I felt like the lowest scum on earth. I had betrayed a friend, who would now be going to jail for the better part of a decade because he refused to betray one of his friends.

Danny, meanwhile, had already gone to jail; in fact, he never even had a chance to testify at the second trial. He had gotten himself arrested in Florida on an unrelated charge—something about telemarketing fraud with sports memorabilia—and Gleeson remanded him in early April.

When the summer came, I blew what few dollars I still had left on the kids. That was appropriate, I thought, considering they were the only good thing in my life, anyway. And when I kissed them good-bye on Labor Day, I cried inwardly, because I knew I wouldn't be seeing them again for a long time. In spite of Alonso keeping his word—getting me off house arrest and granting me unrestricted travel to California—I could no longer afford to go there.

That, however, was about to change.