This story was originally published at Greenwich Time last year. James Glover finally plead guilty on June 1st to one count of interstate transportation of money obtained by fraud stemming from an embezzlement scheme. The Department of Justice said he stole $625,000 from January 09-10 but lucky for RBS he gave it all back (a fact I reported would happen over a year ago). Sentencing isn’t until September and he could face up to ten years in jail plus a fine of $1.25mn. When I first reported on Glover for Greenwich Time a RBS spokesman wouldn’t admit which authories were investigating the scheme. We now learn it was the Secret Service. Oddly, my former peer at Hearst CT Newspapers didn’t mention in his story on Glover that the paper(via me) had published a detailed report on Glover’s fraud a year before and that last week we finally learned my report was dead on and way ahead of the DOJ’s announcement of fraud.
EX-RBS Executive James Glover sees Upstate NY Investment at Risk (2010-03-09 21:23) – Teri Buhl
The Royal Bank of Scotland executive who was fired from the bank’s securities trading operation is still a free man. James M. Glover, who goes by Jamie, ran the back office operations for Greenwich Capital, the securities firm bought by RBS that operates like an internal hedge fund. After RBS discovered Glover’s indiscretions though an internal review, people who work with him say he was grilled for eight hours before they escorted him out of the building. The news was first reported at Dealbreaker after internal whistleblowers called in to report the problem, saying Glover used junior staffers to siphon off funds from trades. The bank’s press man, Mike Geller, confirmed Glover’s dismissal and involvement in the trading scandal but was vague about which authorities they turned Glover over to. Geller told Greenwich Time they wouldn’t comment further since the investigation is still ongoing.
We can confirm that Glover, 52, lives in West Harrison, N.Y., with his wife, Jeanette, who teaches preschool at Rye Country Day school. When we reached Glover at home last week he told us he was surprised RBS released his name as being involved in the case. He quickly referred all future comments to his criminal defense lawyer, Gene Riccio, of Bridgeport-based Gulash & Riccio. Riccio told Greenwich Time that at this time they are not commenting about what happened at RBS or any pending actions.
Ron Geffner, a former Securities and Exchange Commission enforcement lawyer, told Greenwich Time after being asked if it was normal for the Feds to take no action for a month after the bank reported the case, “Glover’s likely not arrested yet because the feds don’t see him as a flight risk and he is working with authorities to plead out a deal. Or best case scenario, they still don’t know yet if he is guilty of criminal charges.”
Why a respected and seasoned financial executive would risk his livelihood after two decades with Greenwich Capital is yet to be answered. But according to multiple people who worked with him, Glover was vocal about RBS taking away cash bonuses last year and mad about what he felt wasn’t fair pay for performance. Many also knew about his dream to build beautiful luxury mountain homes in his favorite ski town, Windham, N.Y.
Glover has a second home he shares with his sister, Janet Glover, in Windham. But just three weeks ago, after his separation from RBS, he put the home up for sale. A Windham neighbor told Greenwich Time they were surprised he was going to sell the house considering he just finished an addition. The nine-bedroom, five-bath ski house is appraised for around $800k and listed at $1.1 million. Glover’s neighbor and local Realtor, Carol Shaw, told Greenwich Time she thinks he’s priced it to sell right away.
You see, in June 2008 Glover took out a very large building loan and security agreement against the house and another piece of land in Windham from Port Chester-based USA Bank. Building loans are typically due in 18 months to two years and the pressure to pay this one off was mounting. If not paid off on time, the Glovers could risk losing their home and other Windham real estate investment. Glover had partnered up with Thomas Poelker, a builder in the upstate New York resort community, to develop a luxury subdivision near the Windham ski resort. According to people familiar with the transaction they bought the undeveloped 75 acres of land for around $1 million a few years ago. It was subdivided into 9 lots, a road was built into the area, and one 10,000 square foot spec house is under construction.
One lending financier who spoke on the condition of anonymity because the deal is private, told Greenwich Time that Glover came to him a few months ago and said he was really worried about the balloon payment coming due on the $3.6 million dollar loan he took out against the second home in Windham to help finance the luxury development. While he was still employed with RBS, the financier told him he would have to try to do a workout with the bank, and that refinancing wasn’t likely. The unfinished spec house has been for sale for a year for $5.9 million. According to a local Realtor, no spec-built luxury home has ever been sold in the area for more than $2 million. Many locals question if this level of luxury second home living will find a willing buyer in this economy. USA Bank would not comment on whether it will foreclose or do a workout if Glover can’t make his loan payment. When we reached Janet Glover, James’s sister who co-signed on the loan, she would not comment on how they plan to make the payments.
For now it’s a wait-and-see game. Even if no criminal charges are levied, will Glover’s somewhat overleveraged lifestyle and side investment projects turn into financial ruin?