LADY CATARINA PIETRA TOUMEI and her benefactor, David B. Guggenheim, late of the New York Guggenheims, will never rank among the great impostors. Victor Lustig sold the Eiffel Tower. Anna Anderson masqueraded as Anastasia. David Hampton posed as the son of Sidney Poitier, snookering high-caste Manhattan.
Lady Catarina and Mr. Guggenheim (David Birnbaum, of Ditmas Park, Brooklyn, in court records) played for the grand name of Guggenheim, and they didn’t get far. They were arrested earlier this year, along with Vladimir Z. Guggenheim — in truth, Vladimir Zuravel, a massage therapist from Moldova — and accused of trying to swindle American investors out of billions of dollars.
Even in this post-Madoff era, their caper stands out for its chutzpah. The picture painted by authorities is a tabloid monument to financial fakery, replete with whispers of rare diamonds, Iraqi oil, connections to the Chinese Politburo and even to American presidents. Capping it all were supposed assurances from the Guggenheims, one of the nation’s richest and most famous families.
In hindsight, the whole affair seems so preposterous it is hard to imagine anyone could have gotten away with it. But, online and in person, the faux Guggenheims were so convincing that, for a moment, a few big-money types almost bit. Even now Mr. Zuravel insists that Mr. Birnbaum, described as a frail man of 68, is a real Guggenheim.
The three have said they are innocent. The criminal charges against Mr. Birnbaum were dismissed on Sept. 9, apparently because prosecutors failed to file a timely indictment, though they could file new charges against him. Ms. Toumei is scheduled to appear Monday morning in the federal courthouse in Lower Manhattan.
What makes the case even more intriguing is that the three were unmasked by the real Guggenheims, who are themselves trying to capitalize on the family name in ways the dynasty’s patriarch, Meyer Guggenheim, could not have imagined when he arrived from Switzerland in 1848 to seek his fortune in America.
Meyer Guggenheim amassed his wealth in mining and smelting. One of his seven sons, Benjamin, went down with the Titanic. As time went on, the family abandoned its early pursuits for the rarefied realms of philanthropy. Another of Meyer’s sons, Daniel, was a patron of Charles Lindbergh and endowed aviation research. Still another, Solomon, built the art collection that gave rise to the Solomon R. Guggenheim Museum in Manhattan. A granddaughter, Peggy Guggenheim, became known as much for her private life for as her art collection. The Picassos, Miros and Giacommettis in her palazzo in Venice draw thousands of visitors a year.
But in 2000, a great grandson of Meyer Guggenheim, Peter Lawson-Johnston Sr., decided that it was time for the Guggenheims to get back to work. With $30 million of family money, he helped found Guggenheim Partners, a boutique financial company modeled on the Wall Street partnerships of old.
Whether this Lilliputian investment company could take on the giants of global finance was anyone’s guess. The odds were certainly long. But its early success is turning some heads on Wall Street, particularly given tough financial times. In recent years, as the great investment houses have cut back, Guggenheim Partners has hired roughly 1,700 people, leveraging a name that is often mentioned in the same breath as Carnegie, Rockefeller and Vanderbilt. It is opening a high-octane trading unit and has tried to muscle in on the lucrative mergers-and-acquisitions business. Today, its money management division oversees $120 billion in assets, only a small portion of which is Guggenheim family money.
To help lead these ventures, Guggenheim Partners has hired Alan D. Schwartz, the smooth deal maker who tried to right Bear Stearns before it collapsed into the arms of JPMorgan Chase, foreshadowing the financial shocks to come. Others have signed on from the likes of Goldman Sachs and Merrill Lynch.
So no one was more surprised than the executives at Guggenheim Partners when two men purporting to be Guggenheims and fronted by a charming woman calling herself Lady Catarina offered to sell $1 billion in diamonds from a private Guggenheim collection that, in fact, didn’t exist.
And not only diamonds. Ms. Toumei — known to her associates as a countess — apparently tried to coax the Coca-Cola Company into a deal involving “Guggenheim” vodka. She invited Rupert Murdoch to dinner (he never got back to her) and tried to court the Bush family. There was talk of gold, of Swiss banks, of loans to the tiny African nation of Swaziland — on and on.
In a letter to one commodities trader, dated May 28, 2010, Ms. Toumei said David and Vladimir Guggenheim were prepared to buy $1 billion to $3 billion of crude oil. “This is not so unusual of a request when you consider that Mr. Guggenheim owns several refineries abroad,” she wrote.
The letter, on Guggenheim letterhead and signed Lady Catarina Pietra Toumei, included a reference to the legitimate Guggenheim Partners, as well as Internet addresses of various Guggenheim museums and foundations.
David E. Cummings, a general partner at the Dolphin Capital Group in Pittsburgh, says he spoke to Ms. Toumei by telephone about diamonds, art, gold and other investments. An art aficionado himself, he was tempted by the Guggenheim name, and by her smooth pitch.
“It looked real,” he says. “She talked the talk.”
Ms. Toumei’s lawyer, Jan Ronis, says the episode amounted to little more than a thrill-seeking fantasy. No one lost any money, he says. “It has been difficult for me to figure out what crime, if any, was committed,” he says. “The three were engaged in writing exciting e-mails to important people.”
At Guggenheim Partners, people simply shook their heads.
THIRTY-TWO blocks south of the Guggenheim Museum in Manhattan is another shrine to the Guggenheim fortune. In the ninth-floor offices of a skyscraper near Bloomingdale’s are mementoes of a gloriously rich past: a sketch of Meyer Guggenheim and his sons; a three-foot-long bar of copper from the Chuquicamata mine in Chile; a check for $70 million, dated 1923, for the sale of two million shares of the Chile Copper Company to the Anaconda Copper Mining Company.
In a glass case is a golden trophy from the 1953 Kentucky Derby. It was won by Dark Star, a stallion owned by one of Meyer’s grandsons, Harry F. Guggenheim, who with his third wife, Alicia Patterson, established Newsday in 1940.
These artifacts adorn the offices of Guggenheim Partners. The idea behind this business was to turn Guggenheim Brothers, the investment firm that had quietly tended the family’s fortune, into a full-fledged financial services company. Today the family is no longer the biggest stakeholder. Another wealthy clan, the Sammons of Texas, owns even more of it than the Guggenheims.
But it is clear that one name — Guggenheim — counts here. “You read about the Guggenheim family, and there are a lot of great values associated with that family consistent with what we want to be as a firm,” says Mr. Schwartz, flanked by Mark R. Walter, the C.E.O., and Todd Boehly, president.
Mr. Walter, 51, is an affable Iowan and a member of a Guggenheim foundation and the board of the Guggenheim Museum. Mr. Boehly, 37, previously managed Guggenheim money at another firm.
“The name means a lot,” Mr. Schwartz says of the Guggenheims, whose wealth is now spread among hundreds of descendants.
Only one of Meyer’s descendants, Peter Lawson-Johnston Jr., plays a day-to-day role in the business. A fresh-faced man of 54, he splits his time between the office in Manhattan and another in Connecticut, advising on real estate and generally playing ambassador to potential clients. (“He is a brand steward for us,” Mr. Walter says.)
On this June morning, Mr. Lawson-Johnston is regaling a delegation from Bahrain about his family’s history.
Guggenheim Partners and its related businesses, he says, arose because the family wanted to make its money work harder. “We were unhappy with the service we were getting from some of our advisers,” he says.
The firm initially focused on managing money for the wealthy, and it has made some savvy moves. Before many on Wall Street caught on to the frauds at Enron, Tyco and WorldCom, Guggenheim was steering clients away. “We recommended selling Enron very early on,” Mr. Boehly says.
What they never expected was that one day a con might involve the Guggenheim name.
An unassuming red-brick building on the bustling Ocean Parkway in Brooklyn seems an unlikely manse for an heir to Gilded Age riches. But there in the lobby, near the doorbell for one of the apartments, is the name Guggenheim. Another name is listed for the same apartment: Birnbaum. A man who answered the bell one Friday morning earlier this month said Mr. Birnbaum wasn’t home.
Exactly how David Birnbaum of Brooklyn became David B. Guggenheim, scion of the Guggenheims, is unclear. His tale, like so many others, seems to have taken life on the Internet. Mr. Zuravel apparently met Mr. Birnbaum at a Brooklyn synagogue and was convinced that Mr. Birnbaum was for real. After Mr. Zuravel later connected on Facebook with Ms. Toumei, the three went to work.
To the world — indeed, even to Mr. Zuravel — Ms. Toumei, 46, was Lady Catarina. The honor, she claimed, was bestowed by certain crowned heads of Europe in recognition of her charitable works. She came across as an aristocrat, at least over the phone and on e-mail. She often signed off her notes with a quotation from Winston Churchill: “We make a living by what we get, we make a life by what we give.”
In reality, Ms. Toumei was a sometime journalist with a long résumé and a home in Rancho Sante Fe, Calif. At one point, according to prosecutors, she claimed to be the wife of John Ratzenberger, the actor who played Cliff Clavin on “Cheers.” (A spokeswoman for Mr. Ratzenberger said the two had a short-lived relationship.)
Mr. Zuravel says Ms. Toumei told him that she had business connections that could help Mr. Birnbaum — that is, David Guggenheim. Mr. Birnbaum’s lawyer declined to comment. Ms. Toumei’s lawyer said she wasn’t available.
As crazy as all of this might sound, a few fish rose to the bait.
On Dec. 15, 2010, the C.E.O. of an international project management company traveled to New York to meet the man he knew as David B. Guggenheim. The goal was to close a deal involving Iraqi crude and a Chinese oil refinery. The men met in the lobby of the apartment building on Ocean Parkway and, later, according to prosecutors, talked over dinner about a Guggenheim estate in Westchester County and the oil markets and the military industry. A few days later, Mr. Birnbaum called the executive, who is not named in the court documents. The caller ID read Birnbaum, not Guggenheim.
The jig was up.
Back in Pittsburgh, Mr. Cummings had connected with Ms. Toumei online and by telephone but was growing suspicious. Why, he wondered, did this Guggenheim have a foreign accent, given that the real Guggenheims have been in America since the 19th century?
“Do you have a lawyer? Do you have an investment banker?” he asked.
“No, we do our own deals,” he was told.
Mr. Cummings had met Ms. Toumei through Robert K. Goodwin, the chief executive of RKG Energy, an commodities trading business in Fairfax, Va., who had heard her name around the industry and connected via Facebook.
“Robert, I am answering your Facebook message,” Ms. Toumei replied to one of Mr. Goodwin’s messages. “Are you a buyer or seller of petro?”
Mr. Goodwin is a former president of the Points of Light Foundation, which was started by President George H. W. Bush — a fact that Ms. Toumei quickly seized on.
“I can at any time — 24/7 (except for the Sabbath) — get Mr. David B. Guggenheim on the phone to speak with either President Bush,” she wrote to Mr. Goodwin.
Later, she asked Mr. Goodwin to pass along this message to the Bushes: “Mr. David B. Guggenheim is a major shareholder of six of the top international banks, and a majority owner of China National Petroleum (along with the Chinese government). Additionally, Messrs. Guggenheim are large contributors to Home Land Security and the U.S. Army.”
Mr. Goodwin declined to put her in touch with the Bushes.
Ms. Toumei later wrote to Mr. Cummings, on Guggenheim letterhead, saying the family was “ready, willing and able to supply you with up to 100,000 carats worth of rough diamonds according to your needs: 5 carats+, 10 carats+, or 20 carats+. These are the highest quality stones.”
Wait a minute, Mr. Cummings thought. “There is something wrong here,” he replied. “The amount of diamonds here is more than DeBeers sells. How is this possible?”
Ms. Toumei, he said, assured him that the Guggenheims were severing their ties with DeBeers and liquidating the diamonds in their vast private collection.
Mr. Cummings asked for something in writing. “One more try — else, we walk!” he wrote in an e-mail. “For GOD’s sake this is a potential $1B deal/transaction and you are sending me grade school material from a Solomon Guggenheim descendant and family member: Wear my shoes!”
He said he was told that if he put $5 million down he would get all the verification he needed.
“The alarm clock went off,” Mr. Cummings says. He called Guggenheim Partners.
LIKE other boutique investment firms — Rothchild, say — Guggenheim Partners isn’t attacking the Wall Street giants head-on.
“We are not certainly about taking on Goldman Sachs or Morgan Stanley,” says Scott Minerd, the chief investment officer. Neither is Guggenheim taking on money management titans like BlackRock or Pimco, he says.
“The flip side is there is a lot of different areas that we can fill in the holes on,” he says. “We are different. We don’t have a lot of one-size-fits-all products.”
Consider the new proprietary trading business, Guggenheim Global Trading. It will be housed on a 30,000-square-foot trading floor being built in Purchase, N.Y. The plan is to invest an initial $500 million — and, as other banks downsize and lay off people, scoop up some talent.
The most audacious hope is to become a full-scale broker-dealer — and a thorn in the side of the Goldmans and the Morgans of the world.
Mr. Schwartz, for one, is happy to be here. “They were a very entrepreneurial family throughout the years,” he says of the Guggenheims. “They found opportunities through innovation. That is the whole history of this firm.”
Mr. Minerd and other executives say Guggenheim Partners saw the financial collapse of 2008 coming and urged its clients to shift into safe investments like United States Treasury securities.
“We hunkered down for it,” Mr. Minerd says. Unlike some other Wall Street players, Guggenheim didn’t bet big against the mortgage market. “But then, our clients are not looking for us to make them rich but to keep them rich.”
The crisis brought in new asset management business as insurance firms ran into trouble and they or their regulators approached Guggenheim for help.
That led to two big transactions: the purchases of Security Benefit of Kansas and Standard Life of Indiana. The crisis also gave Guggenheim executives confidence that they could succeed in the long term, as grand old names like Lehman Brothers and Bear Stearns disappeared, and others, like Merrill Lynch, were subsumed into bigger banks.
LAST FEBRUARY, Ms. Toumei stepped out of the federal courthouse in Lower Manhattan and into a media scrum. The tabloids were feasting on the tale of the ersatz Guggenheims. Lady Catarina departed — dressed, according to The Daily News, “in a stylishly tight black dress and high heels” — proclaiming she was “innocent until proven guilty.”
Mr. Goodwin says he found Ms. Toumei “articulate, energetic and intriguing.” He continues: “I don’t know whether she was a co-conspirator or herself a victim.” So, looking back, it is hard to know who may have conned whom.Mr. Zuravel says he never even met the countess. But he would like to. “She is a great person,” he says.
As for Mr. Birnbaum, Mr. Zuravel says he remains convinced that he is a true Guggenheim. “He is a Guggenheim, but the family don’t want any kind of competition,” Mr. Zuravel says.
“Nobody knows who is a real Guggenheim,” he says. “Nobody knows who is a Guggenheim.”
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