“I was scared of the way he was talking to us, as our lawyer, that something bad was going to happen…”

The day was balmy and clouds were scarce. A light breeze attenuated the routine humidity that besets Maryland’s Eastern shore during summer’s waning days. But outside a quaint office front at 19 Bay Street in the town of Easton, the climate gave no quarter. As passions rose, temperature was yanked in tandem.

It was the afternoon of August 25, 2005 and a vocal dispute began to simmer. John C. Dodd III, chairman of the board of directors at the defunct private security firm S2i, better known by its earlier name, Beckett Brown International (BBI), was confronting his legal counsel after the lawsuit brought on his behalf, as well as that of the company, against former BBI management had just drawn to a close. Earlier that day in court, Dodd‘s hopes of recuperating a lost fortune were dashed by the court’s judgment.

Dodd was shocked that his attorney, James Johnson, a partner at the blue-ribbon corporate law firm Semmes, Bowen & Semmes, displayed no evidence of criminality by the defendants at trial. While most lawyers would strike a conciliatory note upon losing a suit that had cost their client over $2 million and allegedly failing to admit evidence as promised, Johnson’s demeanor was suspiciously vacant.

Knowledge of criminal behavior by the defendants was certainly not news to Johnson. As Dodd’s attorney, Johnson was privy to the mountains of evidence that Dodd accumulated from within BBI. Yet hundreds of file boxes sat undisturbed in the back of the courtroom during the four-week trial containing details of BBI’s sordid trade: former government security officials engaging in burglary, wiretapping and illegal espionage on behalf of wealthy clients and major corporations.

Though Dodd’s lawsuit was limited mainly to claims of fraud, mismanagement and misrepresentation against his former colleagues, he alleges that Johnson’s trial strategy, as relayed to him, was to include the criminal evidence as a display of the defendants’ character. With that tactic surprisingly deep-sixed and the case over, Dodd threatened to go to the FBI and press with every incriminating document in tow.

Johnson warned that if Dodd followed through on his ultimatum, he would “suffer severe consequences,” according to the sworn affidavit of a witness to the quarrel. When Dodd inquired what Johnson was implying, Johnson wouldn’t divulge. He then allegedly instructed Dodd to make believe none of it ever happened.

“I can’t talk to you about that,” Johnson replied when questioned about the conversation, citing his duty to Dodd as a former client. But four days following the alleged threat, Johnson sent Dodd a terse yet formal letter “to follow up on our conversation” in which he recommended “that neither [BBI] nor John personally bring the complaints to the press or to the criminal authorities. I see no possible benefit to the company nor to John, and I see great potential risks.”

“I was scared to death,” recalls Lisa Andrew, the above-mentioned affiant. A trusted accountant brought into BBI following mounting suspicions of fraud, Andrew testified at trial for Dodd and served as president of the company from 2001–2005.

“[Johnson] told us not to do anything: don’t contact, don’t say anything to anybody…I was scared of the way he was talking to us, as our lawyer, that something bad was going to happen if we ever [did],” she says. In fear, Andrew tendered her resignation shortly thereafter.

It wasn’t until this menacing colloquy that Dodd began to suspect BBI’s tentacles extended farther than he ever imagined. While preparing for trial, Dodd had sifted through enough BBI documents to know that the company was guilty of far more than just defrauding him and their customers.

In light of Johnson’s threat, was his legal ineptitude part of a broader design? What was BBI hiding and how did Semmes fit into all of it?

Dodd knew that he had to meticulously pore over the backlog of documents seized from BBI and search for clues. Deep within, he found a tangled web of lawyers, spies, bankers and lobbyists all with one desire — to bury the story.

It’s been two decades since the residents of Lake Charles, Louisiana first learned of a mammoth ethylene dichloride (EDC) spill that leaked from a pipeline connecting the nearby Condea Vista chemical plant and Conoco oil refinery. In the intervening time, the familiar dance that follows industrial accidents and environmental disasters has ensued — court battles waged; damages paid; victims dead or bought-off.

Like the toxins now settled deep in earth, public anger over the episode has receded under layers of compounding health crises as the oil, gas and chemical industries continue to expand in what residents refer to as “the Lake Area.” But the secondary effects of the disaster remain, as does outrage at measures taken by Condea Vista to mitigate the damage caused. In the years following the spill, activists and lawyers fighting for the rights of the poisoned were subjected to infiltration and illegal surveillance by BBI on behalf of Condea Vista, now known as Sasol North America.

On September 9, 2014, a Louisiana state district court judge ruled that lawsuits filed against Sasol North America on behalf of environmental activist Laura Cox, as well as her father’s law firm, Cox, Cox & Filo, would be allowed to proceed. The civil complaint alleges that from 1997–2001, Condea Vista paid BBI operatives to wiretap and burglarize the offices of lawyers representing poisoned clean up workers, including a state senator, as well as hack their emails and steal private information.

“During the time I knew I was being sometimes tailed,” Laura Cox says. But it wasn’t until John Dodd made his documents public in 2008 that Cox became aware of the depths of BBI’s subterfuge. At one point, she claims her car with all of her keys was stolen, including those to a number of law firms involved in the clean up workers’ suit as well as her own home. An internal BBI job ledger report shows the price it took to copy those keys. Several invoices sent to Condea Vista over the course of 1999 confirm the chemical company’s collusion in what BBI’s documents termed the “Lake Charles Project”.

“It was no surprise that we got targeted,” says Michael Tritico, a longtime environmental activist in the region and another of BBI’s surveillance targets. “We had replaced several entrenched politicians that were supposed to be unbeatable. The EPA [Environmental Protection Agency] had to agree to come here four times a year and meet with the citizens. Things were moving and it had to be stopped.”

The espionage that followed the EDC spill may have faded from memory in the broader Lake Charles community, but it remains extremely close to the heart of Sasol. Under Louisiana torts law, the potential liability they currently face reaches into the billions of dollars.

Though BBI has long since disbanded, the original justification for their employment endures. In March of this year, Laura Cox returned to her home in Austin, Texas from a public meeting in Lake Charles she had been filming regarding the planned expansion of Sasol’s chemical facility. There, she experienced an ominous déjà vu.

“I parked my car in a gated community, where I live,” she says. “They somehow got into my locked car and got my camera equipment with all of my memory cards.”

There were no signs of a break-in.

***

Industrial espionage is big business.

According to a 2014 study by PriceWaterhouseCoopers, “estimates of trade secret theft” — conducted by both foreign and domestic actors — “range from one to three percent” of GDP annually. Using World Bank data for 2013, that puts last year’s low estimate at $168 billion in losses to U.S. companies from corporate espionage.

But corporate surveillance and theft isn’t always a battle for intelligence between Coke and Pepsi. As evidenced by the case of Lake Charles, it can involve reconnaissance and even sabotage against groups or individuals that in any way impact a business’s bottom line.

“Most corporate espionage is basically competitors trying to get information by devious means. So it’s usually a one-on-one competitive situation,” says Norm Bowie, a business ethics professor at the University of Minnesota who has viewed some of Dodd’s company files. But BBI was different, he holds. “[They were] in the business of spying. You hired them to do it.”

BBI’s malice wasn’t reserved solely for law firms and activist organizations; anyone who crossed a BBI client could be targeted. In a tawdry scandal befitting a daytime soap, BBI operatives instigated a sabotage campaign against a senior saleswoman for Mary Kay Cosmetics. As it happened, an internal competitor of the target was having a relationship with a BBI principal. The two are now married and live in New York.

BBI’s clientele ran the full gamut of industry. Some included the waste management company Allied Waste; the D.C.-based private equity firm The Carlyle Group; the National Rifle Association; the Louis Dreyfus Group, a commodities firm; Halliburton, the oil/gas and defense contractor formerly run by Dick Cheney; as well as Wal-Mart and Monsanto, the agribusiness-chemical giant.

Their targets had similar variety. Among them were a host of environmental organizations; Hebrew Home Advocacy Group; Children’s Hospital in Boston; an employee of the law firm formerly known as LeBoeuf, Lamb, Greene & MacRae; the anti-GE food network, a coalition of groups opposed to genetically-modified foods; and one of the Koch brothers, just to name a few.

“I know that the company had a somewhat unsavory reputation,” says Phil Giraldi, a former counter-terrorism specialist with military intelligence and the CIA who briefly worked with the firm. Giraldi edited a company newsletter during the late 1990’s and was terminated, he believes, because he refused to do espionage or bodyguard work for the company. “They didn’t know if they were supposed to be cops and robbers or intel and tried to be both,” he says. It was “a strange company with a lot of strange players in it.”

Giraldi isn’t the only former spook to work with BBI. Their ranks boasted a who’s who of ex-security officials who could repurpose their skills and cover their tracks for a handsome paycheck. Among them were veterans of the Secret Service, Maryland State Police, and the Navy’s elite Special Warfare Command. One consultant was even a confidant of Oliver North during the CIA’s secret wars in Central America and the Iran-Contra scandal. He told this reporter he only conducted “due diligence” for BBI.

“This culture of corruption goes back to that Beckett Brown business plan,” John Dodd says. “The plan that I was shown initially came out of Secret Service financial crimes headquarters, by their regional supervisor, and a number of people from the Secret Service came into the company.” Indeed, the business plan delivered to him by former president of the firm Richard Beckett in 1994 is labeled as originating in “USSS FCD/FORGERY”.

Yet industrial espionage rarely makes waves even when uncovered. Often times there’s a mutual interest between parties to keep the story under wraps, especially in cases involving corporate competitors that are likely both involved in the game. Or when, as Dodd believes occurred in his case, a nexus of law firms connected to clients of the spy enterprise wish to sweep as many details as possible under a rug.

Dodd was sure that the illegal activities of former government officers in BBI would ignite a scandal after he went public in 2008. But aside from a few BBI victims who filed lawsuits and a handful of articles detailing specific clients and targets, the story became more-or-less subsumed in the 24-hour news cycle.

It’s an odd turn of events considering how lurid BBI’s tale is. Unlike the black and white characters of a John Le Carré novel, personas in this libretto occupy the grey — mixing equal parts dash and smut. Yet genre tropes remain: wires tapped, witnesses threatened, documents shredded, computers hacked and sex filmed.

For the first time, using billing records and stolen documents, this article will detail BBI’s burglary of one Maryland bank as well as the prominent Baltimore businessman who commissioned them to commit the crime. It will also reveal how Dodd’s quest for justice was scotched by a toxic blend of legal careerism, media negligence and lack of accountability that reeks of conspiracy yet amounts to little more than bad fortune.

This is the full story of how the public got a brief glimpse into the dark world of corporate espionage — and the sacrifices made by the man who showed them the light.

Whistleblower or Resentful Investor?

“John has no money. He’s lost his house and this has become a crusade for him.”

It was in the picturesque colonial town of Easton, about an hour and a half ride from Washington D.C. along the shore of the Delmarva Peninsula, where John Dodd spent his entire life. It remains his home, and also the resting place of BBI’s secrets.

Along a georgic tract of Route 50 sits the modest storage facility where Dodd’s BBI files are kept. Stacked from floor to ceiling are hundreds of thousands of documents piled up in boxes, as well as computer hard drives and other reams of information.

Dodd came into possession of the document heap during the twilight of his firm. On a winter Friday in 2001, he was alerted by Chief Operating Officer Brad Andrew (no relation to Lisa) that two company executives were hauling 30-gallon trash bags full of documents out to the company shredder. An email from one BBI executive in Saudi Arabia a few months prior discusses “sterilizing the office.”

“There were so many items being shredded that the shredder was actually smoking,” Dodd recalls Andrew saying. The following day and into Sunday, Dodd and some trusted lieutenants seized every piece of paper they could from the office. His bounty now sits gathering dust along the Arcadian stretch of Maryland highway.

Dodd’s carriage strikes one as atypical of an investor. An unassuming man with the congenial demeanor of a grandfather, he prefers a tucked in t-shirt and baseball cap to a suit. Years of conveying his trauma to lawyers, reporters and investigators has given his delivery a mechanical air to it, though seething indignation can be seen stewing just beneath his eyes.

A mien of paranoia also overshadows his small town charm. Dodd avows that he’s been followed and bugged. He’s convinced that Semmes torpedoed his lawsuit because of the law firm’s connections to BBI clients. With each passing year, his belief in a conspiracy against him jells.

Dodd’s motive in implicating his legal counsel as part of a broader campaign evokes some skepticism. “John has no money. He’s lost his house and this has become a crusade for him,” Norm Bowie says. “He will pursue this until he dies.”

Some of those involved with BBI are cautiously forthcoming. Richard Beckett, a managing partner at the executive recruiting firm Beckett-McLaughlin International who left his post as BBI’s president in 1999, admits that the company was engaged in criminality but asserts that Dodd was aware of it throughout. “[Dodd] had a falling out with [the other managers] after I left, and he turned on them,” Beckett says. “He knew everything that was going on.”

Seemingly unaware of the contradiction, Beckett also claims that much of the criminal evidence accumulated by Dodd is fabricated. “A lot of the documents that I’ve seen never existed while I was there,” he contends. But creating many thousands of consistent documents, a great deal of which include multiple signatures by BBI personnel, is quite the feat for a man in his late sixties. Especially when, as of 2013, Dodd still preferred faxing hand-written notes instead of email due to his limited typing skills.

“I can recall that the first time I went through documents, I found a document… And I know on there, somebody was suspicioning that BBI would be charged with jury tampering,” Lisa Andrew says. “Right there that sets the tone for what kind of company you’re dealing with.”

Andrew is referring to a memo dated July 7, 2000 to a representative of the PR firm Nichols-Dezenhall. The memo displays the name of a Dallas attorney who was then serving as the jury foreman in the case Pizza Hut, Inc. v. Papa John’s. It proceeds to list his address, date of birth, social security number, his wife’s information, and the metadata of all calls he made between January 27 and March 13. When this reporter contacted the attorney, it was the first he had ever heard of being a BBI target.

“I know that you will use great care with this report,” it reads. “There is the possibility of jury tampering on our part.”

***

At the core of this story are two separate claims made by Dodd. The first is that BBI was engaged in a criminal espionage racket from its inception in 1995 until Dodd seized control of the company’s files in 2001. Several authorities — journalists, courts, former FBI agents — have verified this aspect of the story since Dodd first began contacting victims of BBI in 2005. The second assertion is that attorneys from Semmes torpedoed Dodd’s 2002 lawsuit in an effort to keep the full details of BBI’s work from public view as part of a cover-up for former clients implicated in the espionage.

This second declaration is far murkier; few involved with the fraud lawsuit will talk. But after reviewing details of the case, many red flags support his belief.

James Johnson, Dodd’s lead attorney, was pursuing a judiciary position at the time of trial that required approval by political figures close to those directly implicated in one major BBI operation. Throughout the firm’s representation of Dodd, Semmes’ lobbying division was headed by a close friend of one of the defendants. Initial trial strategies were scrapped by Johnson without notice. Lead attorneys were perplexingly removed from the case at critical junctures. Important financial figures, prepared by Semmes and expert witnesses, were botched at trial in a manner that would make a first-year law student blush. Key evidence of tax fraud by senior members of BBI was never utilized. Chief witnesses to the fraud were never deposed or called to testify. In a sworn statement, Johnson claimed that the evidence of corporate espionage provided by Dodd was not “convincing” — a belief shared by no one who has given the documents even a cursory glance. When Dodd received back the documents shipped to Semmes before trial, some were missing; others showed clear signs of tampering.

It isn’t easy to discern the exact role played by Dodd in the story of BBI. He maintains that he was seduced into investing in the firm by con men eager to rip off an inexperienced, small-town businessman. He’s avowed that he was unaware of the espionage racket until just before trial. He also claims that he did not discover the fraud perpetrated against him and BBI clients until late in his tenure. If true, business experts consulted for this article consider this evidence of, at best, a willful abdication of his oversight responsibilities as chairman of the board.

But Dodd’s backstory lends credence to his claims of naiveté. As detailed in an 88-page timeline of company events prepared by Semmes in 2003, at nearly every turn Dodd’s recollections are supported by documents intended for use as exhibits in his lawsuit.

In 1994, while sitting on a small fortune from the sale of his father’s beer distribution company, John Dodd was enjoying the quiet life of early retirement in Easton. He enjoyed trading stories with patrons at the town’s various waterholes. Soon enough, he became acquainted with Richard Beckett, an executive recruiter who claimed prior work for the National Security Agency (NSA) and Naval Special Warfare Command.

At first Dodd wasn’t too impressed. Bars have always been salons of self-aggrandizement, and he had encountered enough people to know that a trickle of booze too often unchains their inner charlatan. But Beckett’s alleged past intrigued him. When it became clear to Beckett that Dodd was sitting on cash to spend, Dodd claims that Beckett began to speak grandiosely of plans to build a diverse company, combining executive search and private security, from the Rolodex of security officials and corporate contacts he maintained.

Eventually Beckett arranged a meeting between Dodd and two security officials who would become crucial operators in BBI: Paul Rakowski and Joe Masonis. Rakowski was a veteran of the Secret Service and a regional supervisor for its financial crimes division. Masonis was a member of the Service’s technical security division, and at the time was still serving in that capacity.

Over the course of a year, several attempts to woo Dodd were made by Beckett and his cohort, including several private tours of the White House. During one, Dodd alleges he was able to view the Secret Service’s “war room,” including a radar station tailored to detect the possibility of a foreign agent parachuting onto the White House roof.

Dodd’s solicitors had more than impressive toys at their disposal — they also had famous investors and clients in waiting. Paul Rakowski allegedly told Dodd that he had gone through National Guard basic training with multimillionaire publisher and Republican political candidate Steve Forbes, and the two developed a bond. Correspondence between Rakowski and Forbes confirms an amicable relationship.

Dodd was also informed that Dan D’aniello, Beckett’s acquaintance and chairman of the George H.W. Bush-connected private equity powerhouse The Carlyle Group, would be putting up 50% of the start up capital. Dodd was taken on multiple visits to Carlyle headquarters, putting him in proximity to some of the capital’s more famous powerbrokers, including former Reagan Defense Secretary Frank Carlucci and former Bush I Secretary of State James Baker. It was a Washington sycophant’s perfect wine-and-dine.

As negotiations continued in July of 1995, Dodd was invited to a garish party at Richard Beckett’s waterfront home, complete with a handful of Secret Service agents as well as two men that would become key players in the company and the drama yet to unfold: Tim Ward and Jim Kerr. Ward was a 10-year veteran of the Maryland State Police. Kerr was a certified accountant and friend of Beckett, later to become the company’s “independent” accountant. Dodd now believes that the house was rented solely for that gathering.

It worked. BBI would be incorporated in Maryland the following month.

***

All of the men who were to run the company checked out to Dodd’s lawyers except one: Richard Beckett. Dodd had surveyed the resumes of proposed company principals but says he never received his. When Dodd would inquire, he claims he was repeatedly told that Beckett was an accredited accountant, auditor, and successful executive recruiter. In a July 21, 1995 meeting, Dodd asked Rakowski for more information on Beckett’s background. Rakowski allegedly brushed Dodd off with assurances that he had done due diligence on Beckett while still at the Secret Service, using the agency’s “extraordinary capabilities” to perform background checks, as Dodd recalls the language employed. Dodd claims Rakowski also threatened that the company would lose a contract for Steve Forbes’s 1996 presidential run and a big deal with CSX Railroad, both supposedly in the pipeline, if he dragged his feet any longer.

As each tightened screw ground him down, more discouraging news reached Dodd’s desk: D’aniello would no longer be participating. (Correspondence from D’aniello to Forbes reveals that he had precluded a Carlyle investment in BBI as early as December 1994.) But by then much time and energy had been invested in the company’s prospects and the clock was ticking.

On August 16, 1995, BBI was incorporated in Maryland with Masonis, Rakowski, Dodd and Beckett as initial directors.

A week later, a harbinger occurred during the signing of the stockholder’s agreement. According to the contract, Masonis and Rakowski were in charge of operations, with Rakowski implementing securities controls due to his extensive work solving financial crimes with the Secret Service. Beckett would be named president and chief of marketing, thanks to his valuable list of potential clientele. Though each of the four stockholders was to present a $10,000 check upon signing, Beckett didn’t cough up his ante. Sam Brown, the attorney overseeing the agreement and from whom the Brown in Beckett Brown is derived, quickly drew up a promissory note to give him an extension. When it was later discovered that Beckett failed to pay his share by the due date, Dodd was forced to loan an additional $120,000 to the company, accounting for interest.

As it would turn out, Beckett’s inability to summon the cash was just another notch in a long belt. His financial past included federal and state liens, bankruptcies, and civil judgments against him. His history, easily accessible to Rakowski and Kerr, should have aroused suspicion — although neither reported to Dodd having any knowledge of the matter, claiming quite the contrary. But as Dodd belatedly recognized, allowing Beckett to pick company staff provided little in the way of checks and balances.

Just six years later, Dodd was left picking up the pieces of a firm crushed under the weight of top-heavy corruption and fraud.

The Rip-Off

“He told me he was just trying to shake me down.”

After BBI (by then S2i) filed for bankruptcy in 2001, John Dodd was sure he had a compelling case of fraud against former executives in the firm. Independent auditors concluded in their assessment that “management, which included several of the shareholders, created fraudulent sales in order to borrow additional funds from a bank” to “finance excessive expenses for officer salaries…and commission payments” for the preceding year.

As later accounting would yield, BBI was a ponzi scheme and personal ATM for its managers from the get go. According to Lisa Andrew, BBI’s late bookkeeper, petty fraud was a matter of routine. For example, “[executives] would submit a cash receipt for reimbursement for a meal to the company, and then a few weeks later would submit the same receipt, although it would be a copy, and get reimbursed for it,” she says.

But their most lucrative gambit was the “bank-lapping” scheme, alluded to by the auditor. It was achieved through participation in the Business Manager Program of the local Talbot Bank.

Until enrollment in the program on January 12, 1999, Dodd was receiving financial statements that blamed the company’s cash-flow problems on slow-paying customers. The terms of the deal, as presented to Dodd, were that BBI would send invoices to Talbot Bank who would then reimburse BBI immediately with 80%, eventually to be repaid to the bank by the BBI client. The arrangement offered a useful stopgap measure for the supposed nuisance of tardy remuneration.

BBI executives simply used the deal as another mode of pillaging. Through an oral agreement between BBI and Talbot Bank at time of registration, of which Dodd claims he was kept out of the loop, it was decided that BBI would be responsible for alerting clients as to where and when the money should be repaid, not the bank. Under the scheme, BBI routinely billed clients late or sometimes not at all, often for unfulfilled services, all while receiving cash on demand from Talbot Bank through the submission of fraudulent invoices.

Dodd claims that the fraud was only able to go on for as long as it did because he naively relied on management for information regarding the firm’s day-to-day operations. It was a negligence he would come to regret, but what did the scion of a beer distributor know about running a private security firm?

By late 1999, Dodd says he was distressed with the losses BBI was showing. In his periodic updates from Beckett and Rakowski, he says that each would repeatedly harangue about one another, claiming the other was responsible for the company’s financial woes. On August 12 of that year, Dodd organized a summit to clear the air between the two and discuss the company’s financial position and prospects.

Dodd was told of July’s numbers at that meeting, allegedly showing an inexplicable $70,000 profit for that month alone — a far cry from the losses that BBI had been accruing in the preceding months. Incredulous, Dodd inquired whether all of the revenues had been matched up with expenses. According to Dodd, Rakowski fell silent, while Beckett became enraged at his line of questioning. Beckett allegedly got up and fled the scene, offering his resignation to the board four days later.

That meeting signaled the demise of BBI. Over the next four months, Beckett fought tirelessly to sell his stake in the company and be rid of any liabilities. He also purportedly offered to buy BBI’s executive search division and threatened that if his offer was not accepted he would go public with company improprieties, about which Dodd says he did not elaborate.

With something clearly amiss, Dodd asserts he then alerted Rakowski and Ward that the company’s books required an immediate audit. He was rebuffed, purportedly due to the confidential nature of BBI’s business. Customers would flee in droves if news of an audit broke. He says he was then informed by Rakowski that Beckett “was robbing the company blind,” but that the schemes had been discovered and patched up.

“He told me [Beckett] was just trying to shake me down,” Dodd recalls. To Dodd, a military veteran with respect for authority and government institutions, Rakowski was a man he could trust. As BBI’s treasurer and a former supervisor in the Secret Service’s financial crimes division, Rakowski was in an unparalleled position to know if fraud was afoot and put a stop to it.

But suspicions of Rakowski soon began to mount. In early April of 2000, Dodd received a call from the company accountant, Jim Kerr, with regards to an earlier topic of discussion: Richard Beckett’s W-2 form. According to Dodd, Kerr revealed that the now-departed Beckett had never notified the IRS of thousands of dollars in commission payments, essentially committing tax fraud. Kerr allegedly advised him not to open up that can of worms, noting that other company principals had done so as well and that Dodd was in a compromised position as chairman of the board — a similar warning to the one received from Beckett when Dodd refused to sell him portions of BBI. Dodd claims he asked for specific names, but Kerr demurred.

Over the next few months, the books were reevaluated and gains converted to losses. Turnover plagued the company as executives jumped ship upon seeing the iceberg slowly approach in their scopes. Rakowski and Ward lobbied strenuously to be released from their shares of bank debt and stock, as Beckett had done. New deals were eventually reached limiting their liabilities. To this day, Dodd maintains that he only signed off on the new agreements because he was receiving cooked books indicating that BBI was consecutively showing meager profit, hopeful to turn the company around. Through the lobbying of Rakowski and Ward, Beckett was finally relieved of all of his stock — “to simply be rid of him and get the company going,” as Dodd calls to mind his reasoning.

At the time, Dodd was attempting to bring into the company Brad Andrew, the coalmine canary who would later inform him that documents were being minced. Buying Beckett’s stock seemed like a perfect way to free up some for Andrew. “The releases, as I understood [them]…would apply only if everything was on the up-and-up,” Dodd maintains. “I reluctantly signed the releases thinking if we did discover fraud, those releases would be null-and-void.”

That decision would come to haunt Dodd when he succumbed to dubious and, as he would later allege, duplicitous advice from his attorneys in preparation for trial.

Misplaced Confidence

“He told me to guard that tape with my life.”

By 2001, John Dodd’s auditors had collected much of the evidence necessary to instigate a lawsuit against BBI executives and the company accountant who failed to detect the fraud. He was advised to seek counsel outside of Talbot County, eventually approaching Semmes, Bowen & Semmes, based in Baltimore. Beckett, Rakowski, Ward and Kerr undoubtedly had long lists of skilled legal teams they would contact. Nothing should be left to chance, Dodd was urged by the auditor.

Dodd recalls being excited about his prospects. In an initial conversation with Semmes’ then-chairman, Dodd was told that the entire lawsuit would cost roughly $100,000. Despite the hefty price, it seemed worth it given the approximate $700,000 he had already sunk into the corrupt cesspool of BBI. Dodd believed that with much of the fraud evidence already gathered, Semmes’ legal team didn’t require a lot to get the ball rolling. Assigned a young but capable attorney by the name of Mark Grimes, the two began to prepare.

In 2002, Grimes directed that all but 12 boxes from Dodd’s document pyramid were to be shipped to Semmes’ headquarters for examination. Dodd says he did not see those boxes again until just before trial. Dodd maintains that during this period he was kept incessantly busy by Semmes and had no real incentive to comb through the trove.

But the crown jewel of the case wasn’t to be evidence of corporate espionage. It was an incriminating message left by Richard Beckett. On April 19, 2000, just a few weeks after Dodd had spoken to Kerr regarding Beckett’s tax evasion, Beckett left a menacing communique on Dodd’s answering machine:

“John, this is Richard. I got a call from Jim [Kerr] about this W-2 which I’m very upset about, and Baker Botts [Beckett’s legal counsel] is upset about and you’ll be hearing from them. But you need to remind Tim [Ward] that he received a car allowance of $1,000 a month for three years while he was also reimbursed for his automobile expenses and he better claim that because I’m calling the IRS to report it. Among other things, he received $3,000 in legal fees from us, he received a $4,000 loan that he didn’t repay — it all should be done. If you guys are going to be righteous, it’s got to be across the board. And there’s going to be a lot of other issues with Paul [Rakowski], his expenses, and other things. So, if you guys want to do this, that’s fine with me. But I’m not going to be the only one who suffers. Have a good day.”

As claimed by Dodd, Grimes referred to this as “the smoking gun.” Not only was Beckett admitting to fraudulent practices, he was also alleging — from a knowledgeable position — that Rakowski and Ward similarly scammed the IRS. If Dodd could prove that management had been defrauding the government, it would be easier to convince the jury that he too had been swindled.

“[Grimes] told me to guard that tape with my life,” Dodd says.

Yet Grimes puzzlingly left the case not long after. Following multiple inquiries from Dodd, his new attorneys allegedly relayed that Grimes had been poaching Semmes’ clients and setting up a side-practice, for which he was promptly sacked.

Juanita Hopkins, a lawyer and friend who helped advise Dodd after his lawsuit, says that Grimes explicitly denied the accusation in conversation with her after trial. “You could have heard a pin drop,” she explains. “[Grimes] said, ’that is absolutely false. That is not true at all.’”

When asked about Grimes’s sudden departure, Jim Johnson wouldn’t elaborate except to say that to this day the two maintain good relations. Mark Grimes did not respond to multiple requests for comment.

With Grimes gone, Dodd was ping-ponged from attorney to attorney in quick succession. He eventually landed on James Johnson, a Semmes partner, with junior attorney Guido Porcarelli assisting. (Porcarelli likewise refused to comment on the case.)

Dodd says he was always troubled by Johnson’s lack of confidence in the suit compared to that of his predecessors. From the date it was filed, Johnson told Dodd he would have to find new counsel if he insisted that Beckett be named as a co-defendant. Dodd had already been billed hefty sums by Semmes; new attorneys were out of the question. His legal team concluded there was ultimately enough evidence to sue Rakowski, Ward and Kerr, especially with the “smoking gun” message.

“To get [Beckett’s] stock back, I signed releases. It would have been difficult to win this lawsuit without having to fight that,” Dodd recollected Johnson as advising. “I kept trying to get him to name Beckett as a defendant… But Johnson was totally against that.”

At the very least, Dodd presumed Beckett would be called onto the stand as a witness, if simply a hostile one. Beckett and the other executives had a falling out prior to his departure and no party had a monopoly on accusing the other — sitting back and letting the jury watch sparks fly was bound to work in Dodd’s favor.

But Beckett had a bestial trick up his sleeve.

Mutts, Lies & Videotape

“Mr. Dodd proceeded to have us watch a tape of a dog having sex with a woman.”

On November 4, 2003, attorneys for the plaintiff and defense deposed Richard Beckett. There wasn’t much shock initially. On matters where Beckett was culpable as the former president, he pleaded ignorance or hazy memory. When confronted with his own signature, he questioned the authenticity of many documents — as was done in discussion with this reporter. He stated that he discovered BBI operatives were engaging in “dumpster diving,” claiming to disapprove of it. And he asserted that Dodd was overseeing all of the finances, was intricately involved with management of the company and was thus liable for all of the fraud.

It was an artful defense Dodd had come to expect. But it was Beckett’s proclaimed reason for leaving the company that sent shockwaves through the room. “The straw that broke my back was one day, Mr. Dodd summoned me to the conference room,” Beckett stated calmly. “Mr. Dodd proceeded to have us watch a tape of a dog having sex with a woman.”

Johnson, who was asking the questions at that point in the deposition, quickly proceeded to the next. But the damage was done — especially since the event occurred.

“Rakowski and Beckett told me they and then-current Secret Service agents had heard rumors about the dog-woman sex tape and wanted to see it, if it existed, because Rakowski knew the woman,” Dodd claims. According to Dodd’s description, Beckett and Rakowski begged him to get a copy of the tape because the woman worked at a restaurant that the two frequented in the nearby town of St. Michaels, where Rakowski lived. “Having lived in Talbot County all my life except for college and two years in the Army, I know a lot of people in the area and was able to borrow a copy from a friend of a friend,” Dodd says.

This reporter has been unable to corroborate either version of events.

Johnson now had a plausible excuse not to call Beckett to the stand — protecting Dodd’s image. It didn’t end up helping him; the defense quoted that portion of Beckett’s deposition at trial nonetheless. And Dodd says that Johnson never countered the defense’s claims with evidence that Beckett perjured himself during the deposition.

First, Beckett claimed that he “may have” left the threatening message on Dodd’s answering machine after he “had a couple beers” at “night,” under the assumption that he “thought he was talking to Mr. Dodd.” As the audio linked to above indicates, the message was left in the late morning and there are no breaks in Beckett’s speech for anyone to respond.

As Johnson was questioning him about the litany of former companies he had that went under, Beckett was asked whether he ever heard of a company known as Beckett and Brown International. “I don’t ever remember any Beckett and Brown International,” he answered, before quickly backtracking. “Maybe I’m wrong. I know I’ve been wrong before.”

Indeed he was. On company check #237, showing $2,596 to Richard Beckett for “Payroll”, signed by and endorsed by him, he wrote beneath the endorsement, “pay to the order of Beckett & Brown Int’l”. On company check #243, also written to himself but with the memo section left blank, he likewise had it paid out to his other company. Dodd says the checking numbers on the back didn’t correspond with any of BBI’s accounts. The documents in Dodd’s trove are littered with references to other Beckett companies possibly being run out of BBI, with names like Beckett Brown & Associates and Beckett & Brown Associates.

And what did Beckett know about a company called 207 Associates? “We used [it] to pay our undercover people,” he responded. Did it ever send invoices to customers? “No.”

Yet on May 30, 1997, an invoice for $19,700 was sent to United Payors & United Providers, Inc. from 207 Associates. Though unsigned, it states that payment should be remitted to the attention of “Mellony Beckett,” his wife, and sent to a drop box in Easton. (Melanie’s name [actual spelling] is found on many of Beckett’s own suspicious checks.) The bill cryptically says the services provided ranged from “Market Research” to “Protocol Development for Intake”.

According to the corresponding internal job number (#97–0007), the service provided was actually “Investigation”. Indeed, an after action report written by BBI operative George Ferris discussing his “lessons learned” for that project includes “obtain[ing] a false ID,” securing a “credential card machine” as well as “form generating software” to “assist in ‘office visits.’”

Ferris, who also used the alias “George Cody,” was one of BBI’s top black operators. A U.S. Navy special operations officer specializing in explosives ordinance disposal (EOD), Ferris was unable to be reached for comment on this article. But in a 2006 paper written for the National Defense Intelligence College, he’s listed as a weapons branch chief at the Joint Intelligence Task Force for Combatting Terrorism (JITF-CT). According to knowledgeable sources, he currently works for Imagine One Technologies as a contractor at the Department of Homeland Security.

Ferris’s skills proved valuable for a wide range of projects, especially one contracted out of Baltimore in 1998. Contrary to what Beckett claimed in his deposition about his own role within the company, records from that operation reveal the “executive recruiter” was supervising black bag jobs from the get-go.

The Bank-Robbing Banker

“I don’t think we’ve ever represented Ed Hale.”

A few months before trial commenced, Dodd says he found his first example of hard evidence linking BBI to the criminal espionage he had seen allusions to in some of the paperwork. The documents came from a case file on a job conducted by BBI over the course of March 1998.

Billing records confirm that on May 28, 1998, BBI received payment from the Baltimore law firm Ober, Kaler, Grimes & Shriver for project #625–001–98, described as “Re: Hale 2/19/98–3/12/98”. Performed on behalf of Edwin F. Hale (client #625), then-CEO and chairman of First Mariner Bancorp and its subsidiary, First Mariner Bank, the job was to pilfer proprietary information from the Bank of Glen Burnie related to its financial condition and investors. At the time, Hale was involved in a hostile takeover attempt of the smaller competitor.

Richard Beckett’s work logs for the date before BBI began the project show two and half hours spent driving up to Baltimore for a meeting with Ed Hale and Joseph Cicero, First Mariner Bank’s president at the time (“Meeting – Balto – Hale/Cicero”). Between February 23 and March 16, numerous work logs for George Ferris display several tasks completed for project #625–001–98, including “on-site survey,” “info collection/analysis,” and even the purchase of surgical gloves — all of which were initialed by Beckett. Included in the case file were Tim Ward’s handwritten notes from the job as well as multiple proprietary documents clearly belonging to the Bank of Glen Burnie. These included a Daily Statement of Condition, which contains a bank’s financial position, as well as lists of investor votes from their 1998 annual proxy meeting.

After contacting Ober Kaler’s accounting department to ask about those records, this reporter was passed on to the billing attorney on file for Hale, Frank C. Bonaventure. “I don’t think we’ve ever represented Ed Hale,” Bonaventure replied. In follow up correspondence seeking clarity on that point, Bonaventure added, “we are not at liberty to discuss representation.” SEC filings confirm that Ober Kaler was acting as counsel to Hale in his initial purchase of Glen Burnie Bank stock months before trying to wrest control, as well as during First Mariner Bank’s subsequent legal feud with the petite financial institution.

Messages left with the Bank of Glen Burnie and Hale’s secretary seeking comment were not returned.

Dodd quickly called his counsel. He claims that Johnson told him the documents would be very handy as evidence and would incense a local jury familiar with the target bank. But when he faxed the documents to Johnson about two months before trial, Dodd claims that Johnson never addressed them again.

There was also a distressful aspect to the Glen Burnie documents. A newspaper clipping discussing Hale’s attempts to sway investor votes within the Bank of Glen Burnie was found enclosed. A troubling fax stamp was present — the document had been sent to BBI from Semmes several years before Dodd retained them as counsel.

It was likely that the documents originated from an old friend of Paul Rakowski. “American Joe” Miedusiewski, a former Maryland state senator and Semmes’ public affairs director since 1995, had an intimate relationship with Rakowski. According to Rakowski’s travel and expense logs, the two met over several BBI-sponsored lunches during the company’s existence. A BBI memo to Miedusiewski also indicated that he had been solicited as either an investor or participant in the company before it was even incorporated. Rakowski and Miedusiewski’s ties dated back to high school.

But connections between a law firm’s lobbying division and their legal clients don’t constitute a conflict of interest. “If someone was a friend of somebody else’s and they’re not a lawyer on the case, I’m not sure it would,” James Johnson says. “Not unless [Miedusiewski] was an attorney on the case.”

Dodd’s willingness to believe that these connections accounted for Johnson’s poor performance testifies to a lack of sophistication that has haunted his professional relationships since first meeting Beckett. However, as demonstrated at trial, suspicions about his counsel were not entirely misplaced.

Accounting For Negligence

“That’s about a $800,000 mistake, isn’t it sir?”

Semmes hired two seasoned experts to testify at trial. Forensic accountant Robert Garvey was paid to go through all of BBI’s internal books from the company’s inception as well as evaluate Jim Kerr’s accounting. If BBI was cooking the books, as seemed evident from earlier evaluations, it was Kerr’s duty as the independent accountant to detect any improprieties and alert the board of directors, chaired by Dodd.

Garvey’s report found that Kerr violated no fewer than four tenets of the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct, which governs the professional standards of CPAs. Kerr breached Rule 102, pertaining to “Conflict[s] of Interest” by “prepar[ing] Richard Beckett’s personal income tax returns,” “represent[ing] him before the IRS,” serving as a “vice president of [another] company owned by Beckett,” as well as being listed as “Beckett’s bookkeeper in a bankruptcy filing by Beckett and his wife.” Garvey also found Kerr was “providing [similar] professional services for Masonis and Rakowski.”

The report continued: “Kerr and his staff were aware of the cash collection issues and the [suspect] method used to record invoices. Kerr was also aware that payroll tax reporting forms and W-2 forms filed by his firm on behalf of [BBI], its officers and employees were incorrect,” proceeding to list examples of each. As the coup de grâce, Garvey found Kerr culpable in aiding or abetting tax fraud by Rakowski, Beckett and Masonis.

When Garvey took the stand, Dodd was sure that his testimony would clinch the case. But in a chart that Garvey prepared with substantial input and review by Semmes, calculating the amount of retainer that Kerr recorded as income — which, Garvey alleged, misleadingly inflated BBI’s revenues — a mistake was highlighted upon cross examination.

Using Kerr’s financial statements, Garvey found that BBI lost $868,496 in the month of December 1996 alone. The defense, employing a 12-month statement for that year, deducted the year-to-date November profits from those year-to-date December to calculate the monthly numbers for December.

“Doesn’t that tell us that the company lost in December 1996 somewhere around $70,000?” the defense inquired. “That’s a long way off from $868,000… That’s about a $800,000 mistake, isn’t it sir?”

Garvey maintained that he had used the numbers from the December monthly financial statement. He was provided with time during recess to summon that document, but couldn’t produce it by the time court resumed.

“I looked at the date I have with me and I couldn’t come to a sensible explanation for [the mistake], no, sir,” Garvey resentfully admitted on the stand. Despite the fact that Garvey’s other calculations were correct, and the fraud and conflict of interest he documented extended far beyond the final month of 1996, his credibility had been destroyed.

Dodd paid Garvey’s firm $400,000 for his services. Robert Garvey did not respond to requests for comment on this story.

Turnaround or Runaround?

“Dodd does demonstrate, from time to time, paranoid [beliefs]”

The second expert called to testify by the plaintiffs was John Collard.

A “Certified Turnaround Professional” according to his CV, Collard specializes in “recover[ing] assets [and] restor[ing] value to troubled portfolio companies.” Prior to his current work, Collard served as an executive director and vice president in Computer Sciences Corporation and Martin Marietta, both major defense contractors. (The latter firm merged with the Lockheed Corporation in 1995 to form Lockheed Martin.) Other professional highlights included advising Presidents Bush I, Bush II and Clinton, as well as Russian President Boris Yeltsin. Like many of the spooks that worked for BBI, Collard holds a Top Security clearance.

Collard’s responsibilities to Dodd’s team were outlined in a 2003 agreement signed with then-lead attorney Ken Knuckey. According to the agreement, Collard was to provide consulting services regarding matters related to the litigation but “no specific deliverables” were guaranteed, including expert testimony. In June of that year, after Knuckey had left Semmes, the agreement was modified by Jim Johnson, Dodd’s new attorney, to make clear that Collard “would be taking [his] instruction from Semmes, Bowen & [] Semmes [sic],” according to a summary of facts in the judgment from Collard’s later lawsuit against Dodd for back pay. (During and after trial, Dodd failed to pay Collard his contractually agreed-upon fees. Collard later sued Dodd and won.)

“[Collard’s] specific assignment was to explain to the jury the mismanagement of [BBI], by addressing the management’s shortcomings and explaining what the managers and directors of the company had done improperly,” the judgment reads. Johnson designated Collard as an expert who would testify as a “turnaround professional” at trial and notified the defense. In a deposition, Collard clarified that although he had served as just such an expert witness in a separate case, it was settled before trial and thus he had never actually testified as one.

The defense was able to file a pre-trial motion limiting what Collard could thereby testify to, preventing him from making any legal conclusions about BBI’s mismanagement and misrepresentation. Though hampered in what he could say, Collard was scheduled to take the stand on August 15, 2005. When Johnson finally offered him as an expert “turnaround professional” in court, the defense questioned his qualifications. The judge noted having never heard of a “turnaround professional.” Collard was promptly thrown off the witness stand.

Dodd believes that as part of a cover-up by Semmes, Collard was paid hefty sums for testimony that Semmes should have known would be inadmissible. Collard counters that Dodd is simply distraught the case didn’t go his way. “[Dodd] had his day in court, he was legally represented by one of the better firms in Baltimore. But he lost that case,” Collard says. “If we were Monday morning quarterbacking this, if the question is, ‘could things be different?’ Well then yes they could.”

Collard maintains to this day that Dodd’s case for displaying misrepresentation, mismanagement or fraud was always slim. The only aspect that came close, he says, was when management alleged solvency while signing up for the Talbot Bank Business Manager Program.

“The misrepresentation was between the management of the company and the bank. There was no misrepresentation at that point between management and Dodd, because Dodd didn’t do anything based on it,” Collard avers. Although Dodd disputes Collard’s diagnosis, both concur that in meetings Collard broached the idea of purchasing the bank loan, thus making misrepresentation to the bank a misrepresentation to Dodd.

“I remember something about that vaguely…and [Semmes] said no. They said it wouldn’t help me,” Dodd insists.

Like Johnson would claim after trial, Collard also suspectly believes that Dodd’s allegations of corporate espionage amount to hot air. “Dodd does demonstrate, from time to time, paranoid [beliefs],” he says.

When asked why he was brought to testify for the plaintiff in a case that he believed did not reach the bar for displaying either misrepresentation, mismanagement or fraud, Collard responded, “you’d have to talk to Mr. Johnson.”

Worse Than Incompetence

“[Johnson] couldn’t seem to stay focused”

Many of Johnson’s other trial tactics raised Dodd’s eyebrow. No deposition was ever taken of Talbot Bank, nor were any Talbot Bank representatives ever called to testify despite the fact that the “bank-lapping” scheme was one of the central dimensions of fraud. 64 instances of Rakowski “double-dipping” on expenses were never raised. A deposition of Eric Pikus — Tim Ward’s brother-in-law and head of BBI’s recruiting division — in which he admitted to wiretapping, never entered the court record. (Pikus refused to comment for this story.) And the 200 or so boxes of documents detailing BBI’s criminal espionage sat in the back of the courtroom everyday, untouched.

Luckily Dodd still had the “smoking gun” message from Beckett. Johnson allegedly kept contending it was to be saved for the last round knockout punch. “I took that answering machine into court every day,” Dodd laments. It too never graced the jury’s ears.

The defense was able to argue successfully that Richard Beckett, who wasn’t a co-defendant, perpetrated all of the fraud. They claimed that Dodd was aware or should have been aware of Beckett’s swindling, citing half a dozen meetings between the two. Johnson never disputed their defense with evidence that Rakowski had met with Beckett more than 300 times. Nor did Johnson ever call Beckett to testify.

The judge, Raymond E. Beck, dismissed all of the fraud counts on August 16, 2005, as well as Dodd’s personal claims since they were “derivative” of the company’s claims as he was by then the sole proprietor of BBI. The jury made quick work of what was left nine days later.

“[Johnson] couldn’t seem to stay focused,” says Juanita Hopkins, referring to her impressions at trial. “I don’t know whether he had physical woes or was overwhelmed. It could have been a combination of all kinds of things.”

As it would turn out, it was neither physical woes nor too large a caseload that had Johnson’s mind elsewhere during trial.