Octopus

by Guy Lawson

  He is living in a fantastic, grotesque world which resembles the real one so closely he cannot distinguish the difference. He is the victim of a confidence game.”

  Such was the fate that seemed to have befallen Samuel Israel III. The con man was being conned. It was the Hollywood-worthy twist of the tale. Sam’s years of running his own long con had evidently made him extremely susceptible to being conned. The son of privilege, Sam truly did consider himself to be a talented trader: a natural, born to the business, hardened by years of experience on Wall Street. The inability to build his own hedge fund in an honest fashion had engendered in Sam a poor appreciation of the skill and diligence needed to become a true success—which in turn led him to believe that there were shortcuts available in life. Freddy Graber had taught Sam to treat the world like a ship of fools. Only the dim-witted lived by the straight and narrow. The smart set swapped inside information, ate caviar by the spoonful, and stashed their winnings in Swiss bank accounts. Sam had learned to play the game, because that was what it all was: a game—until you were being played yourself.

  If Nichols and his circle were cast as con artists, the swirl of events surrounding Sam suddenly made sense. All of the elements of a classic con were present. Sam had been expertly roped into the secret market scam. Cassidy and Finch were able and experienced “shills”—bit players who populated the world of the con and provided texture and nuance to add credibility. The demand for secrecy was always part of the con. So was the dubious legality of what they were doing. Danger and intrigue and urgency created the hothouse atmosphere that separated the mark from his senses—and his money.

  The “big store” was the setting for the con—the sound stage created for the performers to put on the show. Thus the private trading room at Barclays. Like the gambling parlor in the movie The Sting, or the trading room in Bayou’s boathouse, it had the trappings of the real thing—#ickering computer screens, security guards, oak-paneled walls. Sam did not know that at that time Barclays was in the process of moving its Lombard Street headquarters to new buildings in the Canary Wharf section of London. Nichols and his crew could easily have slipped a night security guard a few pounds to look the other way. But there was no way to prove the suspicion—had Sam suspected.

  Con men know which cities are “right”—where it is safe to function because the law is corrupt, or incompetent, or indi"erent to their presence. For a white-collar criminal operating a high-yield scam there has long been no better city than London. As a global !nancial capital, London has always been the Wild West, a teeming metropolis populated by rich Europeans, Arabs, Asians, and South Americans unschooled in the black arts of international !nance. These legions of the super-rich were drawn to London by an extraordinary loophole that allowed resident foreigners to pay tax only on income earned in the United Kingdom, e"ectively rendering money made in their homelands tax-free. It was a situation that perversely made the money-obsessed, tax-evading expatriates only more likely to fall for a con.

  Then there was London’s history. Capitalism was invented there—and so was its evil twin, !nancial fraud. When the !rst-ever securities were issued in London in 1694—Exchequer Bills devised to pay for the national debt run up by war—fraudulent forgeries began to appear immediately. The new profession of stock jobber found its counterpart in London’s “alley men,” well-dressed slicksters o"ering the timeless promise of fantastic profits.

  By far the most important role of the long con was the star—the “inside man.” As the master of ceremonies, the inside man “told the tale.” He was the mark’s handler and con!dant. He had to hold the whole production together. In this part stood the once movie star–handsome Robert Booth Nichols. He’d sold Sam the idea of the shadow market and all of its associated conspiratorial counter-realities. From the !rst moment in the taxi outside the Dorchester, deftly teasing Sam with the payout sheet, Nichols had pulled Sam into his fantasy world. The fact that Sam was himself an accomplished con artist was unknown to Nichols. But the irony might not have shocked the NSA operative. Living a life of arti!ce made con men prime targets for other con men. The larceny, the greed, the belief in their own cunning—cons were perfect marks, a fact widely appreciated by the best con men.

  The scam Nichols was working might be called the Big Lie. It was like the old-school cons, in essence, but with a postmodern twist. Instead of running a !xed horse race or stock market manipulation, Nichols appealed to Sam’s deepest beliefs—and doubts. In an age of rampant distrust in government and social institutions, conspiracy theories have become an entire industry. Millions believe that powerful people control world events through devious machinations. The Illuminati, the Trilateral Commission, the Bilderberg Group—the list of groups who secretly run the world is virtually endless.

  Despite the Byzantine complexity of Nichols’s tale, at its heart it was radically simple.

  Thirteen families control the world. There were no coincidences. Nothing was the way it seemed. The logic preyed on Sam’s long experience on Wall Street. If Sam was sure of one thing and one thing only, it was that the world was constructed on a tissue of lies.

  Fortunes were built on lies. Wars were started with lies. Goldman Sachs, the Federal Reserve, they all lied and cheated—just as Sam lied and cheated.

  “I kept asking myself if it was all a con,” Israel said. “I was with Bob all the time. I saw everything that he saw. I knew how hard it was to keep up a fraud. It was extremely di$cult. I could see that there were too many people involved in London.

  There were too many moving parts. He would get drunk and talk all night about the shadow market, but he never slipped up and made a mistake. I watched very carefully.

  There was no way Bob could have constructed the whole thing. Bob was the real deal.”

  WHO WAS THE REAL Robert Booth Nichols? Was the man Sam was dealing with in London really the online conspiracy theory superstar, or an impostor who’d inhabited the role to defraud Israel? Claiming to be a CIA asset provided the perfect front for a con man: American intelligence agencies refuse to con!rm or deny any association with their organizations. The policy has the perverse e"ect of creating a universe of impostors.

  As the weeks passed, Nichols gradually narrated his life story to Sam. As they sat together in the Royal Club Lounge at the Grosvenor Hotel, played blackjack at the Ritz casino, or drank at the World’s End or one of the other London pubs favored by Nichols, a self-portrait of the supersleuth emerged. In Sam’s eyes, Nichols really was like Clint Eastwood in one of his spaghetti westerns: Uomo senza nome, the Man with No Name.

  “The boys” had battered, betrayed, and nearly killed Nichols on every continent of the earth for decades, Sam believed. The only reason Nichols was alive was that he kept the secrets of the world—like the existence of the shadow market.

  The countless deceptions and myths that constituted Nichols’s life made it impossible to distinguish between actual events and his own self-mythologizing—perhaps even for Nichols. He claimed he’d been apprenticed into a tiny elite of national security operatives who called themselves “the Chosen.” The men were CIA and NSA operatives who carried out the covert policies of the United States—like the Phoenix assassination program in Cambodia. Nichols said he was a “facilitator”—spook-speak for jack-of-all-trades.

  What could be established about Nichols’s life story was limited, partly because of his dissembling, partly because of the veil of national security. Over the decades, he had left a footprint, however faint and open to multiple interpretations.* The son of a wealthy Los Angeles surgeon, Nichols had attended Hollywood Professional High in Los Angeles, a school speci!cally established to cater to movie stars. Nichols didn’t become a professional actor like many of his classmates. But he did master the most American of all performing arts: self-invention.

  By his early twenties, Nichols was a grifter in Hawaii, apprenticed to a vending-machine dealer associated with the Japanese organized crime group Yakuza. One evening at the
Surfrider Hotel in Waikiki, a man who introduced himself as “Ken” asked Nichols if he’d be willing to pick up a woman sitting at the far end of the bar. Find out what she’s doing, Ken said. Nichols’s pay was $50. Ken said that he worked for the CIA.

  Nichols was soon going undercover for Ken regularly. It was easy for the young hustler: He created and discarded identities like a snake shedding its skin.

  In 1978, a secret FBI report stated that Nichols was a professional con!dence man—but with some unde!ned association with intelligence agencies. He lived in Los Angeles for three months of the year, spending the rest of the time traveling the world. The FBI said Nichols used a series of aliases: Robert Nelson, Robert Nioon, Robert Bert Nichols.

  He also had code names: “Mongoose” was one, “Eel” was another. Nichols was licensed to carry a concealed weapon—a 9 mm Walther semiautomatic. He’d also been issued a license to manufacture the G-77 submachine gun.† According to the FBI, Nichols claimed he’d been sent to Switzerland for three years to be taught the secrets of high !nance for intelligence agencies—the intricacies of how the CIA and NSA secretly funded black ops using billions of o"-the-books dollars hidden in numbered Swiss accounts. The FBI report ended on an ominous note: “Nichols should be considered armed and dangerous.”

  By the mideighties Nichols was based in Zurich. He’d married Ellen Hopko, his third wife. He’d also acquired an undergraduate degree and a doctorate—both from a mail-order college in the United Kingdom. He had no visible means of support, but the list of homes he claimed as residences included a multi-million-dollar villa in the Italian resort of Acqui Terme and a chateau on the Côte d’Azur. He also had a #at on Half Moon Street in London’s Mayfair District, and a house in the exclusive suburb of St.

  Lucia in Queensland, Australia. From these locales, Nichols claimed he controlled billions of dollars on behalf of the U.S. intelligence apparatus. It was in this role that he participated in covertly funding Nicaraguan rebels and Phalangist extremists in Lebanon—illegal ventures supported by extremist elements in the American military-industrial complex.

  When the Iran-Contra scandal broke in 1986, Nichols claimed he’d been disowned by the CIA, like many others involved in Oliver North’s dirty-tricks campaigns. Cut adrift, Nichols moved back to America and turned himself into the ultimate desperado: Hollywood screenwriter. Acceptable Casualty was the name of Nichols’s !rst !lm treatment. It depicts the HIV/AIDS plague as a genetically engineered bio-weapon deployed by rogue elements in the CIA to wipe out the homosexual population.

  Decision of Conscience involved a massive !nancial fraud, with the Soviets printing large amounts of counterfeit American money to destabilize the Federal Reserve.

  The stories were based on real CIA operations, Nichols claimed. A master at inveigling meetings with important people, he was soon associating with legendary Hollywood lobbyist Jack Valenti and Howard Hughes’s right-hand man (and former CIA operative) Robert Maheu. Frank Carlucci, former deputy director of the CIA and founder of the multi-billion-dollar investment !rm the Carlyle Group, was another associate, Nichols claimed. Nichols held himself out as someone with access to sensitive information from the uppermost reaches of the government—“above the NSA,” Nichols said.

  Working on a secret investigation into links between organized crime and the MCA studio, the FBI watched in amazement as Nichols walked into a branch of the Union Bank in L.A. and opened an account, declaring he was expecting a wire transfer of $25

  billion. The money was from a Swiss charitable organization, Nichols told the clerk. The funds never materialized. But what was he up to? Was he trying to scam the bank? Was he for real?

  “Everyone we talked to in Hollywood thought Nichols was a CIA undercover hit man,” FBI Special Agent Thomas Gates recalled. “In the entertainment business everyone was a name-dropper. But Nichols took it to a whole new level. He was a very convincing braggart. He was very astute. He also had a mean streak. Nichols alluded to his murder victims, but there were no bodies. He talked about disappearing people. But his stories were discombobulated. We talked to people he’d name-dropped from the White House. They all said Nichols was full of bullshit. They had maybe met him once.

  They didn’t have dealings with him. It was all part of his con man persona. We !nally subpoenaed all of his corporate records. There was no money in his company. We discovered that he was selling stock that was basically valueless.”

  By the early nineties, Nichols had managed to talk himself into the role of munitions expert advising the producers of the Steven Seagal !lm Under Siege. Nichols’s credentials in weaponry were !ctional, in all likelihood, making him the perfect foil for a fantasist like Seagal. Nichols turned up on the set carrying a primitive version of a satellite telephone—the !rst anyone had seen, so it wound up as a prop in the movie.

  As a lark, Nichols was given a tiny part, playing an NSA-like o$cer sitting in the Pentagon situation room as Tomahawk missiles closed in on Honolulu.

  “What are we going to do?” a panicked general asked.

  The camera panned to Nichols dressed in formal military regalia, looking like an alumnus of Hollywood High pretending to be a soldier.

  “Approximately one million people will reach one thousand degrees Fahrenheit in less than a second,” Nichols said. It was his only line.

  “The secret spy shit Nichols talked about on the set was ridiculous,” said a former Special Forces soldier who was actually a munitions expert and who also worked on the !lm. “He would say things like ‘I can’t tell you what I did, or else I will have to kill you.’ He claimed he’d killed all these people. But none of his stories could be confirmed.

  Steven Seagal was swept up by Nichols. It was like Seagal was taking Nichols’s stories and turning them into his own mythology—the martial arts, the tough-guy act, the connections to the underworld. No one who had really done what Nichols claimed to have done would act the way Nichols acted.”

  When a lawsuit Nichols brought against the City of Los Angeles came to trial, court reporters sat slack-jawed as Nichols testi!ed. Nichols had sued because his gun license had been revoked after he got in a drunken dispute with the police in a seedy bar in West Hollywood. Nichols demanded $20 million, claiming the loss of the license had forced the Swiss !nanciers behind a proposed arms-manufacturing company to back out.

  “Trial Offers Murky Peek into World of Intrigue,” the headline in the L.A. Times said.

  “During four days of frequently heated testimony, Nichols presented himself as a dashing, globe-trotting businessman and intelligence operative,” the Times reported.

  “Armed with letters on White House stationery and snapshots of himself posing with foreign political and military dignitaries, Nichols told jurors that he had toiled quietly and sel#essly for nearly two decades on behalf of shadowy CIA keepers from Central America to Southeast Asia.”

  “Are you sure the CIA was paying you all these years?” Nichols was asked on cross-examination.

  “I’m not sure, no,” Nichols replied.

  AS APRIL TURNED TO MAY, Sam gave himself completely over to Robert Booth Nichols and the denizens of the Royal Club Lounge in the Grosvenor Park Hotel. Like a character out of Alice in Wonderland, the dissipated, chain-smoking #im#am man led Sam down the rabbit hole, always holding the golden key just out of reach. Nichols’s associates were also Lewis Carroll characters—the Queen of Hearts, the Cheshire Cat, Tweedledee and Tweedledum. To Sam, Nigel Finch really was a smooth-talking English antiques dealer who carried his MI6 background with the grace of a gentleman. The eerie-looking John Cassidy had been part of a secret assassination team exiled from the United States by a rival faction. The Humanitarian Coalition was going to rid Africa of AIDS. Sam took the miracle zinc drops every day, certain that the minerals were strengthening his sex drive.

  “I was the moneyman to Bob’s people,” Israel recalled. “While we were waiting for the trades to happen, I met a lot of folks in his circle. At night d
i"erent guys would turn up with di"erent deals to pitch to me. One was a guy who looked like he hadn’t had a bath in a month. He was wearing a motorcycle jacket, he hadn’t shaved, he had stringy hair. He reached into a courier bag and pulled out a rock and put it on the table—wham. It was one of the largest uncut sapphires in the world, he said. Jewelers were afraid to cut the stone because it might crack. He wanted three million for it.”

  To encourage a sense of paranoia, Nichols impressed on Sam the need to be vigilant.

  Danger lurked everywhere. Any passerby could be an assassin. Nichols had done the same thing to Danny Casolaro before his death—told him his life was in peril, encouraged fearful thoughts, uttered threats as if they were warnings.

  “When you were trading, there were a lot of people coming after you,” Israel said.

  “Other factions were trying to stop me from trading. The other factions were pursuing their own agendas. There were groups who used cutout corporations to funnel cash to the Taliban, for example. There were factions who were not friendly to the United States. The program wasn’t only for the United States. It was a global trading program.

  The undertaking was very secretive. The di"erent groups were funding black ops, or covert government projects. The danger would arise if we were found out to be making the trades. I couldn’t divulge the existence of the program to anyone—and that meant anyone.”

  Nichols often used public places for meetings with Sam, spots where it would be difficult for their enemies to hear and record their conversation—such was the classified nature of what they were discussing. Israel was instructed to take evasive measures en route to their encounters, to shake anyone tailing him. The second bench south of the American embassy on Grosvenor Square was a favorite point of rendezvous. On the way to meet Nichols one overcast May afternoon, Israel stopped at a McDonald’s on Regent Street to use the bathroom. As he entered the restaurant he stopped and turned to check if he was being followed, as Nichols had instructed him to do. Sam caught the eye of a man who seemed, perhaps, to be watching him. When Sam came back out a minute later, into the bustle of shoppers streaming along the sidewalk, he recognized the man still lingering. Sam caught his eye, but the man averted his gaze, conspicuously, it seemed to Israel.