My story was a harbinger of the destruction of the American capital system as it’s been known since the Reform Acts of 1933. Local and trade magazines have profiled my overnight descent from pillar of the community to toxic asset when the banking crisis imploded last year.
I owned a fast-grown chain of high-end jewelry shops in the Virginia Beach area, with the civic status and awards expected of a high-profile entrepreneur, and then some. In 2006, I was Virginia Business Magazine’s Success Story of the Year and I had grown my company from one to six stores in three years. Wachovia, America’s quickest-growing bank in 2007, pitched me to replace our prior bank, with an offer no reasonable man could refuse, enabling and encouraging further expansion—even to an overseas factory—with a five year note.
My personal banker faced a failed engagement and demanded a full $15,000 refund on a custom ring we made for him some 18 months before, “or else…” In April 2008, months before the rest of the country would become aware of the self-destruction of the American banking system, Wachovia invoked what is known as a “nervous clause” to retroactively place my loans into default the prior July, despite the fact they were current. A meeting with their “closeout” men took ten minutes, and I was suddenly standing at the edge of an abyss. My house and personal finances were tied to those notes.
I hired an industry liquidation company to raise cash, and closed two stores, but I was cutting off fingers to save the hand. In June, Wachovia requested a “collateral inspection” as a means to seize $1.7 million still in inventory, though they failed to do it properly by all accounts. All our accounts were frozen, hard assets locked up, and my chain was extinct. We had been named the 5th “Best Place to Work,” in our region, but were unable to make final payroll for some 35 employees. I became persona non grata in the highly sequestered worldwide diamond chain—much of my inventory was “mine” on credit, and the dealers had no recourse to their goods. One did try—hiring a hit man who threatened me and my family, and placing us on the FBI Victim Assistance list. I injured my back carrying out records and saw my office of seven years for the last time on an ambulance-stretcher.
Wachovia, Wells Fargo, placed my home into foreclosure, and the local media reported the auction last August. No bidder showed up—temporary limbo—though federal TARP money did enable Wachovia to pay off my first mortgage and acquired my home in early June this year; they then sold it in a “closed door deal” to the prime suspect in our embezzlement case, dubbed the “largest jewel heist in Virginia Beach history,” by the local NBC affiliate.
This blog is in part the story behind the story reported by the local and trade press. It is the story of survival and how God can use the most difficult challenges to grow our character. I’m writing a book but in the meantime, enjoy the blog. Don’t worry, I’ll add some other things too.