Swindle in Swanton, VT
Akerley and the ex-cop invested $100,000 in January 2003, $40,000 in February, $40,000 in March, $40,000 in June, and then, after receiving the first repayment of $10,000, another $30,000 in August. Akerley received two more payments, totaling $22,500, in the fall, but then the money stopped. One reason for the delay, Conant told her, was that a substantial payment from a Middle Eastern customer, wired to a bank in Florida, had been frozen by the U.S. government as suspected terrorist funds. Another reason was lack of working capital to fill all the orders flooding in. Byors was unavailable, Conant said, because he was traveling in China and the Middle East, procuring new orders.Following an interest payment from Byors, Akerley and the ex-cop agreed to invest another $325,000 each in January 2004, and $100,000 more over the next two months. Byors and Conant put up their life-insurance policies as collateral. Akerley waited for her money. And waited. Payment was “just around the corner,” she was told. Then Byors stopped taking her calls, and Conant filed for bankruptcy. In December 2004, she called an old acquaintance, a Gloucester accountant who had been Conant’s bookkeeper.
They met on Christmas Eve. The bookkeeper confided that she and a friend had also invested with Byors and Conant — more than $100,000 — and hadn’t been repaid. Furthermore, a local charitable foundation had sued Conant for misappropriating $10 million, including nearly half a million that had gone to Byors’s marble venture. The bookkeeper told Akerley that Conant would solicit funds from clients who came away from real-estate closings with surplus cash.
Furious, Bonnie Akerley vowed to sue. Her case found its way to Bob Wolfe, a Vietnam-era graduate of Hamilton College who jokes that he takes the cases that other lawyers don’t want. Wolfe had also developed condos in Boston in the 1980s and knew something about marble.
“When I was a developer, I wound up on the mailing list for a stone magazine,” he says. “Every month I would read how the stone industry was getting creamed by cheaper imports from China, Pakistan, India. Now here I have a client who comes to me, having invested all this money, and my first question is: ‘How could this be — how is Byors doing it?'”
Wolfe checked the land records in Vermont and discovered that Byors didn’t even own the Swanton quarry. It belonged to the Barney Marble Company, which was leasing the quarry to Byors.
The president of Barney Marble was Oliver Danforth of Rutland, who had been in the marble business for 40 years. Wolfe called Danforth and identified himself as a lawyer for someone who was thinking of investing in the Swanton quarry. Danforth “gave the impression that Byors was a competent quarry operator,” Wolfe later wrote in an affidavit.
The year before the $130 million appraisal, Wolfe learned, Danforth had purchased the quarry for only $75,000, and then leased it six weeks later to Byors, with an option to buy it for $4 million. Wolfe studied the appraisal that had valued the quarry at $130 million in 2001. The papers supporting the appraisal were suspect. One bore the signature of a man who had died some time ago. Another, from a Boston architect working on a project in South Korea, was only a quote.
The project was never built. The architect told Wolfe that Byors had shown him tiles of Swanton Red and that the marble was of very high quality but too expensive; developers on several projects had rejected the architect’s suggestion to use it. Wolfe unearthed a Vermont business journal article from 1999, quoting Danforth that higher labor costs made Vermont marble more expensive than stone from Europe or the Far East.
In the summer of 2005, Wolfe hired an investigator, who went to Swanton and saw that the quarry was inactive. Wolfe checked with the Canadian processor who was supposed to be holding the marble blocks that Byors had pledged for collateral; the processor hadn’t received any stone from Swanton in nearly three years. The marble blocks weren’t worth what Byors had claimed, Wolfe concluded, and even if they were, they were either fictitious, gone, or pledged as security to other investors. Late in 2005, Akerley sued Byors and some of his associates, including Danforth’s company, charging a massive Ponzi scheme to defraud investors.
Please Note: This article was accurate at the time of publication. When planning a trip, please confirm details by directly contacting any company or establishment you intend to visit.