Long before leaving a string of broken families in his wake, long beforeco-founding a company that froze the investments of 12,000 stockholders andlong before being accused of leading a cult in the suburbs of Carroll County,Scott A. Caruthers took aside a business associate to deliver the inside storyon himself: He was a space alien who communicated to the mother ship throughhis cats.
The year was 1992, the occasion was an after-dinner conversation atCaruthers' home, and the business associate was Bob Bonnell III, who wastrying to market a Caruthers idea that would eventually cost backers more than$2.7 million.
"He said that the mother ship was waiting for the right time," Bonnellrecalled, "and that his role was to prepare the world, because everyone whowas allied with him would be rescued before any calamity hit. ... All of thatprecipitated my saying, `Well, you know, Scott, some people believe JesusChrist is going to return to the world and save people.' And he said, `Who doyou think I am? Jesus Christ was great, but who do you think I am? And what doyou think the mother ship is? Doesn't it say in the Bible, "When I return, itwill come in the clouds"?' And then he winked at me and said again, `Who doyou think I am?' "
Who, indeed. It is the question at the heart of a vast and troubling riddleconcerning Caruthers, 54, who until now has largely escaped public scrutiny,even while enriching himself with ventures that have led others to personal orfinancial ruin. Only recently have a handful of court cases and privateinquiries begun prying open his past, and the bizarre disclosures have caughtthe attention of authorities including the Maryland State Police and theSecurities and Exchange Commission.
The record shows that Caruthers is a high school dropout and an Armywashout, a rather ordinary-looking fellow who lives in a ratherordinary-looking home.
Beyond that the truth is elusive: Since age 17, Caruthers has fashioned afar more exotic version of himself. According to dozens of people who've methim over the years, he has posed as an astronaut, a war hero, an Air Forcetest pilot, a CIA agent, a clairvoyant and a space alien. By doing so, and byhaving a few creative business ideas along the way, he has displayed acharismatic, if unlikely, knack for attracting lovers, investors, admirers andvaluable business connections around the world.
As a result, he controls offshore accounts, foundations and trusts thatenable him to spend lavishly. In June, he threw a party costing more than$500,000 to launch his newest career -- as a cyberartist depicting aliens andtheir spaceships. He has hired a limousine to transport an ailing cat to aPhiladelphia veterinarian. Excess also marks his personal life. Twice he hasbeen married at the same time to two women, unbeknown to them. According topurported journal entries fished from his garbage by a private detective, hehas five women devoted to his every need.
They are among a group of eight adults and four teen-agers said bydetractors to be at Caruthers' command as part of a cult in Carroll County.Three of the adults live with him in a two-story brick colonial on acul-de-sac north of Westminster; the others live nearby, and all but two methim through his dealings with an Owings Mills law firm, Gershberg andAssociates.
Their motivation, according to their journal entries, is survival itself:In the coming years, the super-alien Caruthers will safely lead them throughcataclysmic "Earth changes" to a reordered future.
The journals and other documents depict an existence dominated by themesthat have long characterized Caruthers' life -- controlling behavior,extravagant spending, womanizing, a fascination with cats and, draped acrossit all, a lavish cloak of mythology. It is a fantasy world in which Caruthersis the dashing leading man, keeping a tight rein on followers while recruitingother prospects through the Internet; building up finances while scouting realestate listings for future compound sites.
The group's journal entries -- covering seven months and filling more than2,000 pages -- prompted Carroll County Circuit Judge Luke K. Burns Jr. in Juneto remove four children, ages 4 to 9, from the custody of two mothers in thegroup, including a 9-year-old girl who was living at Caruthers' home.
The emotional stakes of becoming one of his followers might best bedescribed by Elaine Gershberg, the wife of lawyer Richard Gershberg. On July4, 1998, she wrote in a journal entry she sent to Caruthers:
"I didn't want to pull out of my conventional life at first. It wascomfortable and fun ... What started out for me as guilt and sadness and grieffor something special that was lost, is now something I know to be necessaryand even appreciated, for now I live the Truth. The most important thing isthere will be no marriage or family unit like what currently exists ... I usedto feel bad for my children because they are not leading a `Normal' life liketheir friends, even though they still can have fun and enjoy themselves forthe most part. I'm not sure what they think of my relationship with theirfather, but [I] have come to understand that they will appreciate andunderstand when the time is right. After all, it's for their survival and myown and that's what it's all about. I am teaching them and you are teaching meabout following Command, and duty."
Caruthers says that he and the group's writings have been misinterpreted,and in December he invited two reporters to his home to talk about it. Flankedby three of his supporters and a favorite cat, he sat by a computer screenduring a three-hour interview, speaking in a soft voice.
After decades of exercising and weightlifting, he is trim and muscular. Butthe first thing one notices are his eyes. A glittering gray-blue, they neverseem to waver during conversation, widening with a sudden flash whenever hedrives home a point.
The "journal entries" are anything but, he said: Some are forgeriesconcocted by his enemies, who wish to blame him for failed investments orbroken marriages; others are the fruits of elaborate role-playing. He said thegroup members are his employees, and they send him their jottings as part ofan effort to write science fiction.
Caruthers said he has never told anyone that he works for the government;nor has he ever claimed to be an astronaut, a CIA agent or a space alien, hesaid. He also claimed that he has been married only twice, although whenconfronted with evidence of three other marriages, he said he had simplyforgotten about the rest, unable to remember events "that have no significancenow."
As for the allegation that he leads a cult, he said: "To my understanding,cults are usually well-financed. They are usually effective in what they do,and they usually deal with problems, situations or issues -- whatever you wantto call them -- in a different manner than we deal with things. Well, weobviously don't have deep pockets. We certainly don't have the power to doanything to anyone, nor do I desire to. And the reason for that is there is nocult. There never was."
Caruthers first publicly laid out his version of events in June, inresponse to the child-custody cases initiated by two men whose wives areCaruthers' followers. He enlisted the help of syndicated columnist andlongtime acquaintance Jack Anderson, who signed an affidavit ridiculing theidea that Caruthers led a cult. Anderson, 74, said in the document that he andCaruthers were "collaborating on a science fiction novel."
But in a recent telephone interview, Anderson said that he only glanced atthe affidavit before signing it. He said he doesn't recall Caruthersmentioning collaborating on a science fiction novel until the day he signedthe document, June 25. That was 10 days after Caruthers learned that a privatedetective had obtained the journal entries from a fax machine cartridge leftin Caruthers' garbage.
In addition, three people have verified that the journal entries describeactual events. One is a man who severed contact with the group last summer,Lewis Dardick. He said Caruthers encouraged his followers to type up importantdaily thoughts and fax the entries to his house. Dardick's wife, Amy, is stillin the group, and Dardick has custody of their three children.
But the information that most contradicts Caruthers comes from more than 40people who know him, some since childhood. Their descriptions map the strangeand circuitous path that led Caruthers to his current status, portraying himas a free-spending charmer with a quick mind and expansive imagination;someone who manipulates by flattering one second and threatening the next, andwhose stories about himself grow ever more fabulous.
"Like the great impostor, that's what he's like," said his second wife, UnaCrothers, who only recently learned that Caruthers was twice married to otherwomen while married to her.
"He could get you to drink orange juice with arsenic in it. He just had away of pushing people's buttons," said investor David Squier, whom Carutherspersuaded to kick in nearly $200,000 on a venture that went broke.
"Very intense and very controlling," said Hollywood promoter Bob Williams,who was once sure Caruthers would become a million-dollar client, only to fallshort by $950,000. "You've got [suicidal cult leader] Jim Jones all over againif you gave him the opportunity."
Those people, too, have misunderstood him, Caruthers maintains.
"I have shared my views openly and naively with a lot of people," he said,"and I guess that can get you in a lot of hot water if you don't know whattheir opinions are going to be."
Janja Lalich, head of the Center for Research on Influence and Control inAlameda, Calif., and co-author of "Cults In Our Midst," has neither met norheard of Caruthers, but she described a typical cult leader this way:
"They are people who are very cunning, charming; they are very quick ontheir feet. They're very skillful in knowing how to flatter you or turn thescrews. They are persuasive. They are able to gather a little band offollowers around them. It only takes one or two. And they go out and get thenext batch, and the next batch. ... Often they lie and fabricate andembellish. And they seem to get away with it."
The embellishments of Scott A. Caruthers begin with his name. He was bornArthur Brook Crothers and grew up in Anne Arundel County on rural Tick NeckRoad near Pasadena, the youngest of three boys packed into one bedroom in themodest home of B&O Railroad worker John Crothers.
Mom was "Doll," because that's what his father called her, and she alwayshad cats, as many as 20 in later years. Dad was most often the source oftension for Caruthers, known then as Art.
"I guess it was a test of wills," said older brother Joe Crothers, 56, whohasn't seen Caruthers in more than 30 years.
His other brother, John Crothers, 58, who hasn't seen Caruthers since 1966,said Art "tested very high, 138 intelligence. He was into everything. He wasjust a go-getter."
When Caruthers was 12, the family moved to Oak Court in Catonsville. By hishigh school years, his older brothers were in the Air Force, a role he wouldlater adopt for himself, complete with a blue uniform. But in reality, hismilitary career was short and unsuccessful.
Dropping out of school after 10th grade, Caruthers enlisted in the Army onhis 17th birthday. A month after reporting for basic training at Fort Gordon,Ga., the Army discharged him. The Army won't release the reason, butCaruthers' first wife, the former Kathleen E. Wimbley, said she saw thepaperwork: "He got discharged as unfit for military service."
Caruthers' explanation is more mysterious. He said the Army gave him aspecial battery of tests before offering him a discharge, "pending `specialcircumstances' recall."
Wimbley, now Kathleen Mitulinski, began dating Caruthers the next spring,when she was 16 and he was 17. They met at the Seton High School prom, and heswept her off her feet with a patter smoother than any she'd ever heard,although sometimes it was frightening: "He said he was from another planet.[He] was very, very convincing, at least to a 16-year-old, that he had thisspaceship parked on the hill in Catonsville somewhere. He picked up a glassyrock with gold on it. He said it was something left behind by the creaturethat was chasing him."
They were married in the summer of 1963. Eight months later they had adaughter, Fawn, who died at 4 months. To save money, the couple moved in withCaruthers' parents on Oak Court, but when his father died of a heart attack in1966, the household went downhill fast. "The house reeked of urine, caturine," Mitulinski said. The cats "were pretty much allowed to run free. Thefurniture was torn and dirty."
His mother collected her husband's fingernail clippings and kept them in ajar. "She just loved to show them off," Mitulinski said. "Art never saidanything."
The couple moved to Essex, but the marriage deteriorated. Mitulinski saidshe looked out a window on a spring night in 1967 and saw Caruthers dressed ina tux, standing next to a limousine. It was prom season again, but his datewasn't with her.
The next spring, Caruthers took a 17-year-old named Una to her prom.
Although Mitulinski wouldn't divorce him for 19 months, Caruthers, then 23,eloped with Una that summer, just after her 18th birthday. He told her hisfirst wife was dead.
Three years later, Una found Caruthers in a parked car with another promdate, 16-year-old Billi Gardner. Billi also waited for her 18th birthdaybefore eloping with Caruthers, then 27. Billi divorced him two years later. Bythat time, he'd had a son with Una; six years later she divorced him, too. Bythen, he was 35 and had been living for five years with Rachelle Kern, 21.
When not changing women and homes, Caruthers was changing jobs. He was asalesman, florist, milkman, truck driver and security guard, and he alwaysseemed to live beyond his means. "Art's the type, when he has $100 he spends$150," Una Crothers said. "He was bouncing checks left and right." He was alsoworking out a lot, lifting weights and spending spare hours at health clubs.
Each wife suspected at times that Caruthers lived in a dream world. Theysaid he wore an Air Force uniform and talked of doing top-secret work for thegovernment. Often he traveled to Florida, telling Una that he was going toflight school and Billi that he was quitting his job as a government assassinto become a pilot with the Blue Angels. He rigged a car with extra antennas sopeople would think he was an undercover cop.
"It's like anybody who puts on a show -- deep down they're very insecure. Idon't know how he keeps it straight," said Una Crothers, who one night foundhim sunk deep in depression.
"The house was pitch black," she said. "He couldn't talk. It lasted aboutthree days. He didn't dress. He didn't shave." She said he promised to see apsychiatrist but never went. Somewhere along the way, he began calling himselfScott.
Caruthers told Billi, now known as Billi Equi, that he "came over here fromScotland when he was a young boy, and he missed the land so he wanted everyoneto call him Scott."
He had a third child, a son, with Rachelle Kern in July 1983, according toher brother.
Kenny Kern said his sister discovered in 1984 that Caruthers was involvedwith a 23-year-old woman named Paula. Caruthers eloped with Paula that June,and their son was born a month later. But Caruthers was often absent, sayinghe was going on secret missions. Instead he was living in Glen Burnie withRandi Baverman, a 24-year-old teacher. Pushing 40 and still working atlow-paying jobs, Caruthers seemed stuck on the same restless track.
In reality, he had reached a turning point. He was about to meet the peoplewho would become the nucleus of his group in Carroll County. They would launchhim on a focused journey toward wealth and leadership in which millions ofdollars would change hands, at least three families would break apart, andCaruthers would become known as the Commander, with a woman once known asIrmina Dzambo as his Queen.
Irmina Dzambo and Robert Kuhn had been married three years when sheintroduced him in 1985 to her new friend at the Holiday Health Spa in GlenBurnie. His name was Scott Caruthers.
Kuhn and Dzambo were 25. She was born in Germany, where her father wasstationed in the Army, and had moved to Maryland at age 3. He was studying atTowson State University to be a teacher; she was a nurse's aide. Their newfriend Scott was something else altogether.
"He was passing himself off as being in the Air Force, even as far as tosay he was an astronaut," Kuhn said. "He seemed like a decent guy, veryfriendly."
It wasn't long before Kuhn felt a twinge of worry. Caruthers had a prettygirlfriend, Baverman, but he seemed to be getting a little too interested inDzambo. Sometimes he drove her home from work. Once he dropped by their placefor a few laughs and sat on the patio playing footsie with her, all the moreawkward because the couple lived with Kuhn's parents.
But Caruthers also elicited sympathy, such as the night he came to theirdoorstep in tears.
"They were doing a test mission and he had accidentally shot down one ofhis partners," Kuhn said. "I can still see him, sitting there at the tabletalking about it, dropping his head and his eyes filling up with tears,saying, `The missiles weren't supposed to fire, but they did.' "
Kuhn's mother, Virginia, didn't buy it. Dzambo's sister scoffed, too,saying, "Astronauts don't live in Glen Burnie." But Dzambo believed it, andKuhn's uneasiness peaked one evening at their friend's apartment whenCaruthers put on some music, dimmed the lights and gazed at Dzambo. "This isgetting strange," Kuhn thought. "I said, `Let's go.' "
His wife's reply floored him:
"I'm not going. I'm not strong enough to tell you what's happening rightnow, but I will."
Soon after, Virginia Kuhn recalled: "She went off to exercise one morning,and she never came back. All she took with her was a pillow and a cat."
Dzambo moved into Caruthers' apartment near Glen Burnie. Kuhn got a lettertwo months later. "It said, `Don't try to find me. I don't love you anymore,and I hate what all of you have done to me.' And that's the statement I'llalways remember," Kuhn said, "because I had no idea what it meant."
From then on, he knew her whereabouts only by charge card receipts thattrickled in before he could cancel their accounts. The bills came to nearly$10,000 for clothes and housewares -- the makings of a new life withCaruthers. Baverman was also using her credit cards then on Caruthers' behalf,according to her father, Noel, who has barely spoken with her since. Suchhabits landed her in U.S. Bankruptcy Court in 1986 with debts of more than$31,000.
Dzambo's family wouldn't see her again until 1998. But they heard from hersoon enough. In gaining her trust, Caruthers had helped Dzambo confront themost painful ordeal of her past after she told him she had been sexuallyabused by her father from age 12 to 17.
Anne Arundel County police detective Wayne M. Marshall reported how Dzamboconfronted her father: "During the week of 5/26/85 the victim contacted herfather by telephone with a Mr. Scott Caruthers overhearing the conversation inwhich the defendant admitted to said abuse."
Another family member verified the allegations, and a county grand juryindicted Dzambo's father on seven counts of sexual assault. The familyprepared for a wrenching trial, but without warning Dzambo dropped thecharges. By then she had a new name, Dashielle Lashra.
She also had a new life story, courtesy of Caruthers, who told people thatshe, too, worked for the government. Caruthers began boasting of living in athreesome, acquaintances say. He, Lashra and Baverman "were joined at thehip," said E. David Gable, who sold them a car while a sales manager at MotionDodge in Bel Air. Meeting Gable was pivotal, too. He would become a valuedbusiness partner, cutting the deal that would make Caruthers a millionaire.
As for Paula Crothers, left alone in Towson with an infant, the few visitsfrom her husband were often unpleasant. When she laughed at him for implyingthat he was from another world, she said, he shoved her head into a window.Although they wouldn't divorce until 1995, she generally only heard fromCaruthers through Lashra, who would telephone as an employee. "She would sayScott was on a mission, and she was depositing money into my account,"Crothers said.
That, at least, was a change from earlier marriages, when the wives saidthey paid most of the bills. Caruthers, it seemed, was beginning to make somemoney.
It was only a sketch, a crude drawing on a restaurant napkin, and itlooked a bit like a snail shell. But for Scott Caruthers it was a blueprintfor success. His idea was to build a dumbbell that could be raised withoutgripping. He said he thought of it in 1984, two years after injuring his lefthand in a climbing accident, although acquaintances don't recall any suchaccident.
The sketch on the napkin was of a weighted, curling chamber. One could slipa hand inside and lift, not needing to grip -- a more efficient way to liftweights. He called the idea Strongput, but he needed money to make and marketit. Soon, the smooth patter that had attracted all those prom dates beganwooing investors.
Caruthers came to the attention of attorney Richard Gershberg in June 1985when a client who had invested in Strongput asked him to check the paperwork.The paperwork was lousy, Gershberg told him. Word made its way back toCaruthers, who asked Gershberg in early 1986 to help.
The idea was intriguing, Gershberg said, and so was its inventor. "He wasvery eccentric," he said of Caruthers. "He struck me as being brilliant."
Law partner David Pearl was impressed, too: "He is probably the smartestman I've ever met in my life."
Gershberg and Pearl were 31 then, former classmates from Milford Mill High,nurturing a young law practice and even younger families. They were active intheir community and synagogues, and friends knew them as devoted husbands andloving fathers. So, when Pearl began telling neighbors about a greatinvestment opportunity, they often responded with cash.
Some were wowed by Caruthers. Prince George's County businessman DavidSquier poured nearly $200,000 into Strongput, which incorporated in 1987 withCaruthers as chairman, Baverman as president and Lashra as executive director.The three principals also had leading roles in DAR Products, the company setup to hold Strongput's patents.
Squier found this was no ordinary corporate hierarchy when he went to theirhome for Thanksgiving dinner. "He would brag that they were his and hisalone," Squier said. "Dashielle worshiped him."
Squier, too, fell under Caruthers' spell: "I believed in him, in hisability to make things happen. Partly by the way he presented himself and theway he talked about his connections."
The connections supposedly included the CIA, and investors who asked aboutthe "climbing accident" were treated to stories of a mission gone bad.Caruthers also told investors that he'd met Lashra as a young orphan inGermany when he was in the Air Force, that he took her in and raised her untilshe came of age and they fell in love. Sometimes he told the story with Lashrapresent. She would nod in affirmation.
Bob Bonnell III was a marketing man looking for a new project when he heardabout Strongput in 1988. Almost from the beginning, he said, Caruthers talkedof his connections to the CIA's "Black Ops division [in] the Lens Program. ...He said they had 160 operatives worldwide and that he was the Babe Ruth, theHall of Famer, of all operatives. ... I was thinking he might be real and hemight not be. But I was impressed with the product."
In 1991, the company enlisted the help of Richard E. Matz, who replacedBaverman as president. An engineer, he knew enough about business to beshocked by what he found.
Investors, some of whom wrote checks payable to Baverman, had pitched inabout $1 million, Matz said. "There was no business plan. They had no list ofwho put the money in. ... No stock certificates," he said. "I spent a monthtrying to get a list of what they spent money on."
Matz said Caruthers and Pearl traveled at company expense but that he"never even saw the bills." He wrote a business plan but said Caruthers"changed all the numbers to make it bigger and better."
The public launch of Strongput came at the 1992 Super Show in Atlanta, oneof the world's largest trade shows. Along the way, Caruthers made anothercontact for his inner circle when a Glen Burnie man, Steve Rainess, printedT-shirts for Strongput. Rainess is now a bodyguard living at Caruthers' home.
Strongput was the hit of the Super Show, attracting favorable publicity inpublications including the New York Times and GQ. "CBS This Morning" co-hostHarry Smith gushed, "The gyms all over the world are going to be filled withthese things."
Not long afterward, Caruthers invited Bonnell and Camille Easley, who wouldbecome Bonnell's wife, to his house. After dinner, Caruthers and Lashra tookthem to an office, quickly shuffling some papers marked "Eyes Only" that hesaid were their CIA files. And then:
"He said, `You know, Dashielle and I, we're not from this planet. In fact,we have our own language.' And as I stood there," Bonnell recalled, "theybegan to speak in, as best as I can describe it, something like Swahili. Therewere nicks and knocks, clicking noises. ... They were supposed to be hooked upto the mother ship, connected through the cats."
That was when Caruthers stated that the mother ship would rescue the worldfrom "Earth changes" and that he, like Jesus, would come "in the clouds,"Bonnell said. Caruthers then described Strongput's role in this plan, sayingthe product was "a commercial design for a futuristic device called theinertia-less lever, which would be used by NASA."
Bonnell and Easley left, wondering what to do next. Having put so much timeand money into Strongput, they decided to stick it out.
For lawyers Pearl and Gershberg, Caruthers seemed to inspire only loyalty.Pearl, who'd begun working for Strongput, wrote in a company newsletter in1992 that "our fearless inventor" had "constantly challenged me to spread mywings to see a larger landscape. Like a commander on the Starship Enterprise,when faced with overwhelming circumstances, he would repeat the challenge,`Make it so' ... He said, in so many words, `David, you will soar to a wholenew understanding of purpose.' "
Squier noticed that Pearl "started to act like Scott." Investor GeorgeRobinson detected an unnerving level of hero worship when he and Pearl visitedthe York Barbell Co. to pitch a manufacturing deal. Pearl "was preaching like[Caruthers] is Jesus or God or something," he said. "And I came back and saidto my wife, `You know, it sounds like this guy could be a cult leader.' "
About that time, Gershberg's sister, Debra Hackerman, went to work forStrongput as a fitness consultant. Tim Hackerman, then her husband, said shebegan leaving the house several nights a week to meet the boss.
Caruthers continued to make important contacts, including Jack Anderson,whom he met at a Washington speakers forum. Caruthers claims the columnist asa close friend; Anderson said recently that he doesn't know Caruthers "allthat well." Anderson also said he had heard the CIA stories, so he checked hisagency sources, finding "they hadn't heard of him."
Anderson's son-in-law, Peter Bruch, introduced Caruthers to Barry Marvell,a corporate matchmaker in offshore-manufacturing deals. Strongput sought acheaper work force to lower its price, so Marvell hooked the company up withMcDonnell Douglas Helicopter Co., which was looking for a product to make inSouth America. In August 1992, the Caruthers entourage traveled to thecompany's headquarters in Arizona, then toasted an agreement at a receptionattended by oil sheiks and international businessmen.
Soon, Hollywood entered the mix. Bob Williams, vice president of marketingfor Premiere Entertainment, placed Strongput into scenes in TV shows andmovies. Tickling Caruthers most was an appearance in a "Star Trek" movie.
Caruthers made grandiose plans for $1 million worth of business withPremiere, Williams said, but paid only $50,000. Williams also heard CIAstories; he says he has a fax Caruthers sent with the logo "United StatesConfidential Assignment." Caruthers denies sending it.
The McDonnell Douglas deal fell through. So did other manufacturing plans.Bonnell was nearly broke, but he said Caruthers kept him working by promisingriches and by warning cryptically that, if he quit, "The black van could showup at any time."
By then, Caruthers had called on an old acquaintance for help -- car dealerE. David Gable, who tried engineering a string of deals to infuse Strongputwith cash by placing it in a publicly held company. One arrangement afteranother collapsed until May 1996, when Gable, Caruthers and others formed anew publicly traded company, Carnegie International Corp. Within a few yearsit would have 12,000 shareholders and be listed on the American StockExchange.
Strongput and most of its 224 investors were left in the cold. Carnegiepicked up DAR Products, the holder of Strongput patents, but not Strongputitself. DAR's few owners -- Caruthers and Pearl among them -- got $3 millionworth of Carnegie stock as part of the agreement. A handful of Strongputinvestors also got Carnegie stock, but most got only a plea for more moneyfrom Pearl on Nov. 24, 1997. Nineteen days later, Strongput folded.
Bonnell and Easley lost their homes in the fallout. Other investorsrefinanced loans and took their children out of college. Pearl, Caruthers,Lashra and Gershberg say they lost plenty, too, but the Carnegie deal easedtheir pain.
Caruthers became a founding director, and a financial statement to the SECon Oct. 28, 1998, showed that he held 792,500 shares. Pearl, who becameCarnegie's corporate secretary, had 645,000 shares. At $6.88, the last priceper share before the SEC halted trading April 29, the worth of their totalholdings was $9.89 million. Gable, Carnegie's chairman, had 1,748,000 shares,or about $12 million at the last traded price. His brother Lawrence, who hadalso sold cars to Caruthers, became a Carnegie vice president with 50,000shares ($344,000).
With money no longer a worry, Caruthers was free to turn his full attentionto his circle of followers, and by late 1997 their friends and relativesnoticed worrisome signs of withdrawal from old loyalties and passions.
Tomorrow: The spiral of loyalty tightens.