Quirky Des Moines #14: The Baby Faced Embezzler

 

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Photo from KCCI

 

 

He didn’t look like a man who would go on to commit the largest financial crime in the state of Iowa in the 1980’s. Even his friends and those who worked with him were more shocked than angry about his crimes against them. Gary Lewellyn,  the man with the mop of curly hair and a baby face,  shocked not just Iowa but the nation with just how much of a double life he was secretly living.

Gary Lewellyn  was born in Humboldt, Iowa in 1949. He was an active boy scout as a child and student body president while in high school. He went on to become a successful stockbroker and he and his wife owned a home in West Des Moines, a lakeside condo, multiple sports cars and all of his suits were custom made.  To the outside world, Lewellyn was a success.

But he also had some secrets. One being his mistress. Referred to in the press as his “pampered princess”,  he met her while she worked in a local hotel which she later left to work for him. He bought her diamond rings, Cadillacs, fur coats and gave her access to a joint bank account he used to buy stocks during their four and a half year relationship.

Speaking of stocks, the way Lewellyn was able to pay for his spending habits was stock kiting or the illegal practice of exploiting settlement delays to transfer unavailable funds from one bank account to another. In the brokerage industry, kiting occurs when a securities firm fails to settle buy and sell orders by the proper settlement deadline. He embezzled money from the bank that his father owned based out of Humboldt to make the stock trades.

He was accused in the spring of 1982, at the age of 33, of orchestrating an elaborate $17.7 million stock swindle that resulted in the closing of his father’s bank in Humboldt. Once he caught wind that he was soon to be facing charges, he disappeared with $600,000 in cash, leaving behind his wife, two children, mistress and his favorite copy of the book, “Catch Me if You Can”.   Three weeks later, he surrendered in Cedar Rapids after chartering a plane for $2,000 from Denver.

During his three week disappearance, Lewellyn went to Las Vegas and he admitted to gambling half of the cash he had brought and bought two high end cars as well as entertained a mysterious blonde woman.   Many thought the mystery woman was his mistress from Des Moines since she was the last person to see him before he disappeared when he gave her $20,000 in cash. It never was proven either way if she was the mystery woman or if he happened to meet someone else while in Las Vegas.

His gambling was such a problem, according to his lawyers, that they tried to say he was a pathological gambler in both his stock work and in his personal life and were trying to plead insanity based on his addiction.  The court wasn’t convinced of the insanity plea and he was sentenced to five years in federal prison.

While in prison, he was said to have provided authorities information that helped solve a murder case involving a fellow inmate. He became a confidential FBI informant on a Chicago money laundering scheme after his release from prison in 1987.  He moved to Oklahoma City and  started a business named Performance Nutrition that became immediately popular once a trainer with the Kansas City Chiefs introduced the non steroid performance enhancers to the team.

In 1994, the federal Securities and Exchange Commission filed a complaint against the company for stock manipulation. He was fired from Performance Nutrition by the company’s shareholders in 1996 for “grossly overstating” revenues and was sued by the company.

Lewellyn died at the age of 63 in Oklahoma City in 2012.

 

To read about how Governor Robert Ray helped bring refugees to Iowa in the 1970’s, click here.

 

 

 

 

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