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FBI agents raid Bilzerian home

Stepping up its pressure, the government confiscates computers, files and a firearm from the Tampa mansion.

By SCOTT BARANCIK

© St. Petersburg Times,
published June 22, 2001


TAMPA -- The prolonged battle between the federal government and convicted stock manipulator Paul Bilzerian escalated when FBI agents searched his family's Tampa mansion and drove away with several computers, a truckload of files and a Beretta firearm.

The purpose and targets of the June 11 search are not known. U.S. Magistrate Mary Scriven sealed the FBI's explanatory affidavit and search warrant from public view.

Bilzerian, 51, wasn't home for the government's early-morning wake-up call. Since late January he has resided in a Miami prison, where a federal judge sent him for contempt of court. The agents were met at the door of the 36,000-square-foot home by Bilzerian's mother, Joan Bilzerian; his grandmother, Claire Barrie; his wife, Terri Steffen; and a teenage son, Adam.

"We were all traumatized," said Joan Bilzerian, adding that she was questioned for two hours.

"It's just pure intimidation," said local Ford dealer Ernie Haire, a next-door neighbor in exclusive Avila and a close friend of the family.

The legal battle dates back to Bilzerian's brief but flashy tenure on Wall Street. A corporate raider who never reached the ranks of a Michael Milken or Ivan Boesky, he was convicted of securities fraud in 1989. Prosecutors said he illegally profited from failed takeover deals by secretly accumulating stock in target companies, getting rejected by their boards but making millions when the stock price shot up.

Even after serving 13 months in prison and paying a hefty fine, Bilzerian's troubles with the law didn't end. In an attempt to reclaim millions in profits from his maneuvers, the SEC filed a civil suit against him and won.

That was in 1993, but Bilzerian has never paid a penny. With interest, he owes about $100-million. He and his family claim he is innocent, a victim of a government conspiracy to protect Wall Street fat cats from losing control.

For years, Bilzerian used bankruptcy to protect the family's assets from seizure. He and Steffen also have employed a Byzantine array of offshore trust funds and shell companies that made ownership of the family's assets a moving, and sometimes invisible, target. By removing himself as beneficiary, he was able to remake himself as a pauper. In a Jan. 2 bankruptcy filing, he claimed just $15,805 in assets -- a fraction of last year's $80,000 in property taxes on the Avila mansion alone.

But the SEC persisted, maintaining that Bilzerian and Steffen were hiding assets. The regulators convinced a judge to demand a full accounting. Unsatisfied with the results, the judge sent Bilzerian to prison indefinitely, appointed a receiver with subpoena power to collect information on the assets and froze most of Steffen's accounts.

Steffen insists she has fulfilled the judge's order. In late May, four months after her husband went to prison, she delivered over 1,000 pages of documents to the court and requested a two-day leave for Bilzerian so he could watch son Adam graduate from Gaither High School.

The judge denied the release. Judith Starr, the SEC's lead prosecutor on the case, said she and a court-appointed receiver had discovered a number of accounts, transactions and documents the Bilzerian family said did not exist. Millions of dollars, including some proceeds from the sale of a $2.8-million dollar home in Minnesota, have disappeared recently, Starr said.

Bilzerian's family said the years-long battle is taking a toll. His mother said her incarcerated son looks old and thin.

Steffen said she is borrowing money from friends and family to make ends meet, but she has yet to look for a job. Haire said she left shortly after the FBI raid for her parents' summer home in Minnesota, seemingly on the edge of an emotional breakdown.

Many other family members and friends also are caught up in the fight against the government, including a sister-in-law, Steffen's parents, and even next-door-neighbor Haire, who said he is one of two trustees for a key Bilzerian trust.

Son Adam Bilzerian said he hates the way strangers assume his dad is a "crook." He is eager to join the Army and become a Green Beret but said he is torn over defending America after seeing the government pummel his father.

"It's killing me," he said. "How can you go in and fight for your country when this is what they're doing to him?"

And now the FBI raid has raised the possibility of new criminal charges against Bilzerian or members of his family. Although the purpose of the search is unknown, Tampa attorney and former U.S. prosecutor John Fitzgibbons said the FBI couldn't have obtained a search warrant without offering probable cause that a crime had been committed.

Joan Bilzerian said she did not know who owned the Beretta. It is illegal for convicted felons like her son to do so.

-- Times researcher Caryn Baird contributed to this report. Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.

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