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Take the Money and Run 

Rebecca and Terry Solomon face charges of fleecing almost $20 million from investors, but not even the feds know where the couple is hiding.

Wednesday, May 30 2007
Atop one of the tallest points in Tiburon stands a house that could be dubbed Hearst Castle North. Slender stone columns guard the front door of the 14,000-square-foot mansion, its tawny exterior accented by white-frame windows that look upon the Golden Gate Bridge to the west and San Pablo Bay to the east. A swimming pool, tennis court, and two-story guest house fill out the two-acre grounds, garnished with hanging flower gardens and topiary pine trees, their branches swirled like soft-serve ice cream.

The street address identifies the property as 185 Gilmartin Dr. But in what it represents, the estate lies at the intersection of affluence and decadence, the nexus where Rebecca and Terry Solomon feted the swells of the North Bay.

In June 2004, the couple threw the kind of lavish gala common to Jay Gatsby, complete with valet parking, catering tents, and five-piece orchestra. Guests wandered the marble floors of the Mediterranean-style chateau, sipping wine culled from the collection of 3,000 bottles in the cellar. Some enjoyed the indoor spa, relaxing in the Jacuzzi and sauna, while others lounged on the back terrace, soaking up shimmering ocean views.

The Solomons likely spent $25,000 or more to flaunt their wealth that summer afternoon. Yet as ulterior motives drove Gatsby to play the gracious host, their generosity served another purpose beyond plying the neighbors with lamb cutlets. The couple wanted to cast an image of stable prosperity, to reaffirm their standing among Tiburon's elite. For within days, the Solomons would seek to capitalize on the post-party bonhomie, inviting a succession of guests back to the house to discuss a business proposal.

One of those who returned was William Osenton. A semi-retired mortgage broker, he had chatted with the couple at social gatherings since first meeting them a year earlier. As Osenton later related to the FBI, Rebecca Solomon began her pitch by explaining that she and Terry ran an international jewelry brokerage out of their home. Her current venture, she went on, involved the sale of a 138-carat diamond for $68 million. Moving the gem from the seller to a buyer in Japan would require $5 million to cover security and delivery costs.

Solomon asked Osenton to loan her $2 million, vowing to reimburse him in 30 days with 10 percent interest. She offered as collateral two diamond rings that a jeweler had appraised for her at $3 million. Osenton pledged to invest $1.5 million and mentioned that his friend Katherine Vogelheim, a Tiburon marketing consultant, might chip in the difference.

Before parting with his money, court records show, Osenton learned from a second jeweler that Solomon's rings were worth only $328,000. Likewise, a reappraisal of two pieces of jewelry provided to Vogelheim as collateral placed their value at $103,000, or $1.4 million short of what Solomon claimed. But perhaps believing that any couple able to afford $20,000 in monthly house rent must operate a legitimate company, Osenton and Vogelheim were undeterred. They wired a combined $2 million to the Solomons.

A week later, crowing that she had closed the diamond sale, Rebecca told the pair they would receive an extra $500,000 apiece as a gesture of her gratitude. By the next month, however, Solomon's promissory notes had matured without her refunding the loans, and over the next year, federal authorities allege, she floated endless excuses for failing to pay back the money.

In the meantime, she and Terry wallowed in gilded excess, as revealed by court records and sources familiar with the Solomons. They lodged in opulence at the Four Seasons during frequent trips to Tokyo and bought a Mercedes Maybach, an "ultra-luxury" sedan that costs $300,000. Another $300,000 went to the Los Angeles event planner who arranged a wedding party for one of Rebecca's three adult daughters. The couple also paid rent for her daughters, who lived together in a suite at the Beverly Wilshire Hotel, piling up monthly tabs as high as $150,000.

The Solomons subsidized their lifestyle with more than the $2 million they received from Osenton and Vogelheim, according to a federal indictment filed in December charging them with fraud and money laundering. Authorities accuse them of fleecing almost $20 million from a clutch of Bay Area investors through bogus diamond deals and a scheme that promised 20 percent returns on investments in a Chinese telecom firm. During a two-year span, from the North Bay to Silicon Valley, the couple exploited tech executives, physicians, lawyers, and other monied types whom, it appears, the Solomons marked as something else: suckers.

In wooing and schmoozing investors, Terry, 58, acted the sidekick to his 49-year-old wife, who supplied the couple's brains and financial brawn. Short and raven-haired, by turns charming and cunning, Rebecca beguiled them with a personal narrative as grandiose as her home. Boasting that she owned a large stake in a $1.2 billion family trust in her native Philippines, she described her late father as a general who served under former President Ferdinand Marcos. Her ex-husband belonged to Japanese royalty, she claimed, and still paid her a bimonthly "allowance" of almost $500,000. She dropped the names of minor celebrities, including former Raiders receiver Willie Gault and actress Irene Ng, intimating that she mingled with the glitterati.

For authorities, the veracity of her stories remains murky, much like the couple's whereabouts. Days before federal agents raided their home last spring, the Solomons left the country, and U.S. officials consider them fugitives. Angry investors brand them something else: grifters.

A quote from the Book of John graces a wall display in the parish hall at St. Hilary Church. Below the words "I am the vine, you are the branches" hang oak panels overlaid with scores of thin metal leaves of various subdued colors. On each leaf appears the name of a parishioner who helped fund recent upgrades to the Tiburon chapel and its elementary school.

Four leaves painted light gold hover above the rest; the hue denotes the "Angel" contributors who gave $500,000 and up. Two of the leaves honor unnamed donors, and a third recognizes a charity foundation. The fourth bears the names of Rebecca and Terry Solomon.

The couple moved to Tiburon in 2002, after splitting the previous year between Los Angeles and Las Vegas. They soon joined St. Hilary, enrolling their young son in school and cozying up to church officials and congregants alike. As part of an auction to collect money for the building projects, they donated jewelry and a trip for two to Tokyo, raising an estimated $20,000. They hosted dinners for parishioners, opening their doors to St. Hilary's "venture Catholics," the couple's purported term for members with deep pockets.

Among that well-heeled group was William McLaughlin. A Tiburon real estate developer and longtime church benefactor, he made news in 2005 for organizing a massive rescue effort for house pets displaced by Hurricane Katrina. Court records show that McLaughlin, who did not respond to interview requests, introduced his friend Osenton to the Solomons in spring 2003. And soon after the couple's gala in June 2004, it was McLaughlin whom they asked to call Osenton about their potential investment deal.

The donor board at St. Hilary's honors Osenton with a dark gold leaf that designates him a "Legacy" contributor, the appellation for church members who gave $250,000 to $500,000. He stepped down in 2001 as president of Pacific Guarantee Mortgage, a firm that, during his 14-year tenure, bloomed from a lone office in San Rafael into a nationwide brokerage with revenues in the billions.

Despite his manifest financial savvy, and Rebecca Solomon embellishing the value of her collateral, Osenton chose to trust the couple, as did Vogelheim, his fellow parishioner. Their reasoning can only be surmised, as Osenton declined to comment and Vogelheim did not respond to interview requests. More than a dozen investors across the Bay Area who fell for the Solomons' alleged scams echoed that reticence when contacted by SF Weekly. "What happened is embarrassing," one said. "Nobody likes to talk about being duped."

Several sources, insisting on anonymity owing to business and social ties to the investors, suggest the Solomons' flamboyance seduced people who probably should have known better. Besides hosting parties and seven-course dinners, the couple often invited large groups for food and drinks at four-star eateries; her hand laden with a diamond ring the size of an apricot pit, Rebecca always signed the tab. Those who joined the Solomons on day trips to Napa Valley would return home with wine worth thousands of dollars, the couple's way of saying thanks for coming along.

Such largess may have disarmed the Solomons' well-heeled quarry, who with minimal research could have unearthed the couple's sketchy business history. Court records indicate they filed for bankruptcy in the late 1990s after a botched attempt to launch a chain of spas in Southern California. They went bust again in 2001, this time in Las Vegas, following the demise of an upscale fashion boutique they owned. The latter enterprise foundered when U.S. Bank sued the Solomons, alleging that they and Rebecca's daughters, who handled the store's business affairs, committed fraud by overdrawing their accounts by $1.2 million. (No criminal charges resulted.)

But investors, blinded by the glitz, apparently neglected to look into the couple's public past. "Ostentatious wealth can be attractive to people," says a Tiburon business executive who spurned the duo's overtures. "[The Solomons] preyed on that instinct."

Their profligacy stirred chatter even in Tiburon, a posh enclave of 8,700 residents with a median house value of $1.7 million. They owned a Range Rover and four Mercedes sedans, employed a household staff of six, and paid a horticulturist $3,000 a month to nurture an orchid collection that rivaled the Amazon's. House visits from a masseuse and fitness trainer augmented Rebecca's regimen of spa treatments, liposuction, and assorted cosmetic tucks. She shopped for clothes as if it were an Olympic sport, running up $30,000 bills during daylong binges on Rodeo Drive.

Together since at least 1995, the Solomons struck most as a mismatched pair, seeming to share little in common beyond their son. Described as amiable and laid-back, traits that contrasted with his wife's hauteur, Terry possessed a gearhead's yen for the open road, exploring the Bay Area's byways on his Harley. On the business side, while Rebecca courted investors, Terry handled much of the bookkeeping and provided customer support, answering questions about the investment plans. "He was her lapdog," says a Tiburon resident who socialized with the couple. "He did whatever she told him to do."

In early 2004 she told him to leave, apparently weary of his financial dependence on her. Terry moved into a house in Sausalito for several weeks as rumors of divorce percolated. "She said she wanted a self-made man," another former friend says. Yet Terry's exile proved far from permanent. He traveled with Rebecca to Japan and stayed for stretches at the Tiburon house, and during their party in June that year, they looked every bit the happy couple. He returned home for good a short time later. "You couldn't really figure out what the truth was about them. You couldn't really get a clear answer."

Osenton and Vogelheim found themselves trapped in that fog of ambiguity as they pressed Rebecca to pay back their $2 million. Court documents divulge scarce details about how she parried as they confronted her time and again over the next year. But perhaps she simply recycled the responses she offered to Flora Ng, who wondered when Solomon would refund her $2 million.

In May 2004, a month before panning for investors in Tiburon, Rebecca Solomon discussed a gem scheme with her friend Neil Ison, a San Jose lawyer. She told Ison of her plan to purchase an 81-carat diamond for $6 million that she could resell to a buyer in Japan for double that amount. The catch: She needed to come up with $2 million in the next two days. In return, she would repay the loan within a month and split her profits.

Ison relayed the proposal to his girlfriend, Ng, a Saratoga property manager, whom he had introduced to the Solomons some months earlier. Ng agreed to the deal, wiring $350,000 of her own money and borrowing $1.65 million from a business partner. The following week, Rebecca called Ng with the good news of the diamond sale — only to blow the 30-day payment deadline in June, according to the indictment.

Over the ensuing six months, as she failed to cover her debt, Solomon fed a string of excuses to Ng, authorities allege. In the strangest episode, Solomon, alluding to a problem with wiring funds into the U.S., sent Ng and Ison to pick up the money from a Swiss bank. Her story proved as permeable as the country's namesake cheese, the couple flying home a week later without check in hand.

Solomon later blamed her delinquency on losing $11 million in a hedge fund and a delay in gaining control of her family's trust fund in the Philippines, court records state. Meanwhile, Ng struggled to fend off her creditors, who foreclosed on at least two of her properties. She wound up filing for bankruptcy.

In spring 2005, Ng sued Solomon in Santa Clara County Superior Court, alleging fraud and breach of contract. Her suit mirrored one brought by Ison, who accused Solomon of reneging on a promise to pay him a $1 million finder's fee. The two cases contain details that hint at the origins of Solomon's wealth, apart from the millions she and her husband allegedly bilked from investors.

Ison, who before the diamond deal fiasco represented the Solomons in a handful of contractual matters, supplied a declaration for Ng's case. In it, he contended that Rebecca Solomon presented herself as a beneficiary of a $1.2 billion family trust that "was derived from her father, who was a general in the Marcos regime." Ison further asserted that Solomon claimed the Philippine government intended to seize the trust, "so she wanted to hide her assets."

In his own case, Ison filed copies of e-mails he exchanged with Solomon in early 2005. The messages capture his frustration as Solomon, vacationing in Japan, ostensibly breaks a series of pledges to wire money — ranging from $30,000 to $3 million — as Ng's creditors circle. Solomon's replies mix denial with hubris. After apparently missing another payment deadline, she writes, "I ... will continue to do the best I can for you and Flora under these very difficult circumstances."

The e-mail thread climaxes with Ison's resignation letter in April 2005. One passage quotes a message Solomon sent a month earlier concerning the arrest of Yoshiaki Tsutsumi, a Japanese railway and hotel tycoon. Ranked as the world's richest man by Forbes in 1990, Tsutsumi, a major player in bringing the 1998 Winter Olympics to Japan, faced charges of insider trading and falsifying company records. (He later pleaded guilty to reduced charges and paid a $1.7 million fine.)

Ison asserts in his e-mail that, months earlier, Solomon told him of Tsutsumi facing another investigation for diverting $600 million into a Japanese trust fund for tax-relief purposes. In a subsequent letter to Solomon's new lawyers, Ison referred to the account as "Rebecca Solomon's trust fund" and stated that Tsutsumi deposited the money "with the complicity" of her former husband, another Japanese businessman. According to Ison, Solomon faulted a police probe of the scheme for stalling her efforts to obtain $135 million in loans.

Ng and Ison did not respond to interview requests. An FBI spokesman stated only that the agency has heard theories about Rebecca Solomon's riches, leaving open the question of how many, if any, trust funds exist in her name around the world. But whatever the case, the indictment reveals Solomon turned a profit on her purported diamond deals in the Bay Area. Ng, Osenton, and Vogelheim recovered less than half of the combined $4 million they loaned, with Ng sustaining the heaviest loss at $1.7 million. Then again, less than half beats what the Solomons repaid a group of South Bay investors.

The couple arrived in the Bay Area in 2002 after their commercial failures in Los Angeles and Las Vegas. Precisely how they dug out from those financial cave-ins poses a riddle as mystifying as their whereabouts at the moment. Yet in the same way they appear disinclined to notify authorities about their location, the Solomons omitted mention of past blunders while soliciting investors to fund a Chinese telecom venture.

From summer 2005 through early last year, the couple hosted small groups at South Bay restaurants and their home in Tiburon to talk about New Century International Leasing. A legitimate firm in China, NCIL owns leasing rights to that country's rapidly growing — and enormously lucrative — cellular-phone network.

The dinners drew upper-crust crowds, with most of those in attendance tipped off to the meetings by friends whose previous investments with the Solomons paid off. Typically dressed in a black Vera Wang gown, bedecked in diamond jewelry worth more than $1 million, Rebecca wowed investors by promising 20 percent profits inside of 60 days. The words resonated no matter her accented English and sometimes garbled syntax.

She bolstered her credibility with a PowerPoint presentation heavy on references to NCIL executives and venerated global financial institutions, among them Credit Suisse and Leed Securities of Amsterdam. Solomon mentioned the endorsement of Irene Ng, an occasional actress best known for starring in The Mystery Files of Shelby Woo on Nickelodeon, who at the time worked for Merrill Lynch as a banker. For good measure, on the screen flashed a photo of the Solomons with Willie Gault, the former Raiders and Chicago Bears wideout, posing at a black-tie event. (A spokesman for Gault said the ex-NFLer has no memory of meeting the Solomons.)

Audiences bit hard. Over eight months, investors wired some $15 million to the Solomons. Then the wait began.

As the 60-day deadline passed, anxiety climbed. During the next few months, the Solomons and a cluster of go-betweens representing them sought to appease investors with soothing e-mails, assuring them that the couple simply needed to solve a few payment snafus. But by the time the Solomons left the country in April last year, nothing could tart up the ugly numbers. In all, court documents suggest, investors received about $650,000.

"In retrospect, we look pretty stupid," says an investor who lost more than $100,000. One of at least two dozen investors who has sued the Solomons for fraud, he concedes the couple's showy affluence hypnotized them. "I'm a victim of being duped, but I'm also a victim of being stupid. We let our guard down."

South Bay investors tipped off authorities to the Solomons' suspect business dealings in fall 2005. The investigation crescendoed with an FBI raid on the couple's house last April, adding to the colorful history of the $8 million mansion.

Two decades ago, after a prolonged legal fight that reached the U.S. Supreme Court, the original property owner won the right to develop the land. In the mid-1990s, Ukrainian entrepreneur Peter Kiritchenko bought the lot and built the chateau he reportedly christened Shangri-la; federal agents arrested him there on fraud charges in 1999. He later testified for the prosecution in the high-profile corruption trial of his one-time business partner, Pavel Lazarenko, Ukraine's disgraced former prime minister.

Unlike Kiritchenko, however, the Solomons were away when the feds came knocking. The couple had heard of the ongoing probe, court records indicate, but authorities stop short of accusing them of fleeing the country. "We think it was a matter of coincidence that they were traveling abroad when the search warrant was served," an FBI spokesman says. U.S. officials have notified Interpol about the couple's fugitive status.

As for where the Solomons may be hiding, Japan and China rank as the top possibilities, based on their business ties to each nation. If true, forcing their return could prove impossible, given the dim view both countries take of U.S. extradition efforts.

Sausalito attorney Charles Barron, who has represented the Solomons in past civil matters, declined to comment beyond declaring that "they are innocent and ultimately the evidence will prove that fact."

Yet if the Solomons have seen their last California sunset, the circumstances of their departure seem somehow fitting. Bob Lorsch, a marketing guru who lives in L.A., met Rebecca a few years ago through her interest in Wildlife Way Station, a nonprofit animal sanctuary in Southern California that he helps run. She invited him to her house in Tiburon on occasion, and he introduced her to potential business investors.

Solomon pledged $500,000 to the Way Station in 2004, vaulting her to guest-of-honor status with actress Sharon Stone and conservationist Richard Leakey at the group's annual fundraising dinner that year. "She conducted a lifestyle that would lead anyone to believe she was a substantial, credible investor," Lorsch says. "She projected an image of great success and wealth, and she wanted to be seen as a philanthropist."

She never made good on the pledge.

About The Author

Martin Kuz


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