Even from his jail cell, convicted financier Tom J. Billman has continued to mastermind an elaborate scheme to conceal millions stolen from his defunct Bethesda-based savings and loan, federal prosecutors said yesterday.
Although Billman's attorneys have portrayed him as "hopelessly insolvent," prosecutors offered startling new evidence that he directed the movement of money in Europe and the United States -- even as he was awaiting sentencing on his April fraud conviction.
Some financial maneuvers apparently were crafted to influence his sentencing -- which could include millions in restitution.
In one handwritten letter cited by prosecutors, Billman asked a friend in Europe to transfer $5 million from an account, adding: "It's atight fit before sentencing and I do not want to perjure myself."
Meanwhile, Billman -- who eluded authorities for four years before being captured in Paris in 1993 -- offered tips for covering up the transactions. "When each written instruction is complete -- destroy it! When all are done, you should have nothing left. Also no computer records," the letter said.
And he already was planning for the day he would be free -- as early as 1995, according to that letter. A key to his plans: millions stashed in Europe, funds that federal and state officials could have sought as restitution for the money he took from Community Savings and Loan.
The developments caused the abrupt postponement of Billman's sentencing, which had been set for yesterday morning.
U.S. District Judge J. Frederick Motz issued a stern message from the bench, saying he learned of the developments after receiving a copy of the prosecutors' brief at his home Tuesday night.
"I'm taking what the government says very seriously," he said before setting a new sentencing hearing for June 7. "Everybody better start taking this case seriously, including the people most affected."
Billman's lawyer, John R. Fornaciari, declined to comment on the accusations, saying he had only learned about them hours earlier. Prosecutors would not say whether new charges were being considered.
Meanwhile, court records revealed that a few days before Billman's conviction, $13.5 million from his European accounts was wired to the Maryland Deposit Insurance Fund in negotiations with his Swiss lawyers. The fund, which insured Community's deposits, is seeking to recover millions from Billman.
Billman, Community's former chairman, was accused of diverting more than $100 million of depositors' money to prop up his failing real estate companies. He fled the United States in late 1988 after the S&L;'s collapse and a civil judgment ordering him and other Community executives to pay $112 million.
For years Billman eluded investigators, traveling in Europe and South America, and using a variety of aliases to acquire bogus passports. His secret life was financed with some of the estimated $22 million of Community money that prosecutors say he had stashed in Swiss bank accounts.
When finally arrested early last year outside his small Paris apartment, he showed a false British passport and identified himself as John Rink. He has remained in jail ever since.
Portrayed as 'insolvent'
As Billman's sentencing neared, his attorneys -- who had planned to argue that Billman should be sentenced to no more than two years in prison -- portrayed him as financially ruined.
In court papers filed this week, Billman claimed a single asset -- reportedly a wine collection worth $80,000 -- and a net worth of minus $149 million. "Speculation regarding Mr. Billman's present financial condition should be put to rest," his lawyers wrote, describing Billman as "hopelessly insolvent."
Defense attorneys also filed letters of support from friends, relatives and business associates. One was from George Lady, a former college roommate whose birth certificate Billman secretly obtained to acquire a phony passport and flee the country.
Billman's son, Charles, also wrote on his behalf: "This is not a schemer out for a quick buck. He should not be punished as if this whole catastrophe . . . was by grand design."
But, in court filings, prosecutors offered a very different picture of Billman yesterday.
Evidence from Vienna
Much of the recent financial maneuvering came to light after a courier claiming to work for Billman was arrested in Vienna last week. Ricardo Diniz Monteiro, 24, a Brazilian citizen and student at the Sorbonne in Paris, was arrested as he attempted a $5 million bank transaction for "Charles Samuel Poehlman," one of Billman's aliases, according to court records.
Prosecutors would not give details of the arrest, which led to the discovery of dozens of pages of memos, instructions and correspondence in which Billman outlined plans to hide the money. Financial records and a number of phony IDs also have been recovered, according to a 200-page brief filed yesterday in U.S. District Court in Baltimore.
The documents link Charles Billman, a University of Richmond law student, to the plan. And they indicate that $250,000 was to be steered from Miami to a Chicago account held by Ross & Hardies, the Washington law firm that is representing Billman.
Mr. Monteiro's arrest also led to the discovery of a 21-page, handwritten letter Billman recently sent Mr. Monteiro through a London attorney, prosecutors said.
It opens with the newly convicted executive describing himself as "down in the dumps." He goes on to give Mr. Monteiro intricate financial instructions as well as the following job: extend the rental of a safe deposit box in London, verify its contents, forward the key to Billman's son in the United States, "then forget this ever occurred."
Prosecutors claim that Billman passed communiques to Europe through his son. Charles Billman would not comment about the allegations yesterday.
Among other transactions, Mr. Monteiro was to transfer $850,000to an account held by Billman's father-in-law and $250,000 to Ross & Hardies, according to the court filing. An additional $3.7 million was to go to the IRS, although Billman's note said that he hoped to recover 60 percent of it in refunds.
Charles Poehlman
Mr. Monteiro told police in Vienna that he'd had a four-year association with Billman, whom he knew only as Charles Poehlman. The two met through Mr. Monteiro's mother, who worked for Billman as an interpreter in Rio de Janeiro beginning in 1990 and later became his traveling companion.
Over the years, Mr. Monteiro's duties included worldwide travel -- opening accounts, ferrying documents to lawyers, maintaining security boxes and bank books. In one instance, he described receiving a large amount of cash from Billman's Swiss lawyers and transporting the money in a briefcase to Vienna.
He never thought he was doing anything illegal, according to the court filing.
However, he said he became aware of his employer's March 1993 arrest almost immediately because a Washington law firm, which he did not identify, notified him and informed him of Billman's true identity.
Evidence seized in connection with Mr. Monteiro's arrest has led to the discovery of numerous bank accounts and security boxes controlled by Billman, prosecutors said. One safe deposit box in London yielded eight savings passbooks for accounts totaling about $940,000. All but one showed activity since Billman's arrest, and one transaction occurred as recently as March 1.
Other records suggested that Billman may own as much as $6 million in jewels and that efforts may be under way to sell them.
His correspondence is spiced with code words for his family in descriptions about plans to transfer money to them: "rats" refers to his children, "her" to his wife, according to the prosecutors' filing.
Tough sentence urged
Assistant U.S. Attorneys Barbara S. Sale and Joyce K. McDonald urged the judge to be tough in deciding Billman's prison term and the amount of restitution he must pay.
"The public could not help but be disillusioned with the criminal justice system if the outcome of this case were that Billman could retain the proceeds of his offense," they wrote.
Billman's lawyers said their client authorized the recent transfer of $13.5 million from Switzerland to MDIF, although a MDIF attorney flatly disputed that Billman was cooperating with the fund.
MDIF, which insured Community depositors and has spent years trying to get Billman's assets, was contacted in late March by three Swiss lawyers who admitted to controlling about $10 million owned by Billman, said fund attorney Neil Dilloff.
Fast money transfer
MDIF promised them confidentiality and assurance that they would not be sued civilly. In exchange, they agreed to turn over the money, and about half of it was transferred within days.
"One reason for moving the money right away was that we were concerned that Billman would find out about the transfer and stop it," Mr. Dilloff said in an affidavit signed Tuesday.
He said Billman apparently did find out just before the transfer. Two of the Swiss attorneys told MDIF that Mr. Fornaciari contacted them and "threatened" them, Mr. Dilloff said. His affidavit also describes a letter, purportedly from Billman, complaining that the transfer was contrary to his instructions.
Nevertheless a MDIF lawyer traveled to Switzerland and on March 28 was given $2.4 million in $100 bills, which he took to a bank to be transferred to the United States. The balance of the money was transferred directly to New York.
"We're aware of other monies Mr. Billman has," Mr. Dilloff said yesterday. "The situation is evolving -- it ain't over yet."