Turning Out to be Another Cheek!
One of my favorite Crook stories is about Malcolm Cheek and to a lesser extent his wife Stephanie.
Ralph D. Young discovered Malcolm working for an electric cooperative in Alaska and brought him to St. Louis to head his engineering firm, Young and Associates (Y&A), in 1981.
Malcolm eventually became president and the firm went public in 1989 at $2.50 a share. By June of 1990, the stock rose to $42 and split 2/1. In August of the same year, without warning, the national accounting firm of Deloitte & Touche withdrew certification of the 1989 financials. In September Y&A reported lower earnings for 1989, and a month later fired Deloitte.
In 1991, a local firm was hired to replace Deloitte.
The Cheeks pulled their son out of a private school and moved to Atlanta, Georgia. They put their house up for sale.
Malcolm then flew to New York City for a meeting and vanished from sight, leaving $10 million in personal debt.
Y&A then announced Malcom’s disappearance and a probable loss of $7 million for 1990.
I was hired then by a creditor of Malcolm and Stephanie, and was able to obtain a “pre-judgment attachment” of all their personal and real property. I accompanied the St. Louis County Sheriff to their expensive house, which they had bought a year before, and we hauled out all their furniture. Apparently, though, they had moved out the good stuff and replaced it with stuff that didn’t fit this expensive place prior to moving to Atlanta. We took what was left.
I told the sheriff to leave the clothing because I assumed that reselling it would be more trouble than it was worth. Later my wife Wendi scolded me because she had heard there were St. Johns knits as well as Manolo Blahniks, Ferragamo, and Jimmy Choo shoes, which were very expensive! How was I to know? Her collection of Steiff Teddy Bears was gone too.
At her bankruptcy meeting of creditors, Stephanie was contrite. Prior to the bankruptcy she had told people that she thought her husband had killed himself.
Under oath, I asked her whether she knew where Malcolm was. She cried and when I pushed her to answer, she denied knowledge of his whereabouts. (It’s one of the few courtroom type performances I am proud of!)
Later that year the Feds filed a criminal complaint against Malcolm accusing him of, among other things, double-pledging stock to two banks. (One of the banks was Allegiant, which is a story for another blog post!) Malcom was essentially using Y&A as a piggy bank, pledging stock, taking out cash and using his and its credit.
The bankruptcy trustee, a friend of mine, flew to Georgia to seize Stephanie’s property at a house she and Malcom had there, but was refused entry. The criminal case against Malcolm grew cold, but the Feds did not think he was dead.
In 1994, Cheek was living under the assumed name, Paul Fenwick, in the mountains of north Georgia and had a contractor make some changes to his cabin. Malcolm aka Paul got in the good graces of the contractor and became a partner. He invested $10k in his new mark’s business and worked with the mark’s baseball-card business. Malcolm aka Paul also reworked the computer system. Then the mark noticed a $25k discrepancy in the books, did some research and suspected that his “friend” was Malcolm Cheek. Cheek moved to Georgetown, South Carolina, where he had a storage shed and was known as Raymond Taylor, a private man with plenty of cash.
On April 2, 1994, Malcolm Cheek was arrested along with guess who? Stephanie, who was with him and in it all along. The FBI and trustee discovered the shed in Georgetown, which held the expensive stuff and a book on how to change identity.
Stephanie was indicted for lying under oath in her bankruptcy proceedings when she denied knowing where her husband was, the one charge they had her dead to rights on. She was sentenced to three years. Malcolm was sentenced to nine years and was released in 2002.
I think I’ve “found” them both, but won’t identify them because there are others with similar names. It does appear that the two divorced and that Stephanie remarried.