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Arnie Zaler – Former Executive Director of the Colorado Zionist Federation – Sentenced To 15 Years in a Federal Peniteniary for Wire and Mail Fraud

November 7, 2009

Arnie’s Saga 2

Arnie’s Saga 1

Arnie’s Saga 3 (at the end of the entry)

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(updated with a few details on May 3, 2010)

Arnie’s Saga 4

An Unusually Warm and Sunny Day For Early November…

Arnie Zaler…

Yesterday was an unusually warm and sunny day for early November. With a lot of poor people, most of whom were Black or Brown, I took a bus from my Northwest Denver home to downtown Denver. I was  heading to the new federal court house on 19th and Champa to attend the sentencing of Arnie Zaler to a 15 year prison term on four counts of fraud to be followed by five years of enforced parole. He was also ordered to pay restitution for $2.5 million of the money he swindled.

I had known Zaler some in his/my student activist days at the University of Colorado in Boulder. In the spring of 1969 I once saw him, with great dramatic effect, burn his draft card in protest against the Viet Nam War and declare his intentions to `give up his white skin privilege’ – the latter a bit more difficult than the former to achieve.

Zaler’s journey – from a genuine 60s radical to a failed version of a Larry Mizel or Norm Brownstein wanna-be – took him, like Sisyphus, up the hill and back down again. Not that he reached commanding heights. In the 1970s, shifting his political gears some and with an eye on bigger things – he became, if I recall correctly, the executive director of Colorado Zionist Federation. As such, he had `access’ – regular contact not only with the state’s ruling elite, – or at least that section of it that was Jewish – but also on at least one occasion accompanied a few of the state’s big-wigs to a meeting with President Jimmy Carter to lobby for Soviet Jewry. By the 1990s he was in a federal penitentiary in Arizona. Interesting personal trajectory.

His has been a strange, mostly sad – self-delusional – journey, of someone whom, in the end, was simply too greedy for his own good and `hungry’ to achieve personal power, it seems, by any means necessary. He long ago became a pathological liar and con man; along the way, – he stole tens of millions of dollars, ruined the lives of a fair number of people most of whom were Jewish, embarrassing many who helped him get out of one jam after another, and, until the day he finally surrendered himself to federal authories in Atlanta, it appeared he never stopped trying to scam people.

Another Arnie Zaler

As Zaler was led into the courtroom, I could hardly recognize him. Whatever else can be said about him, I have a clear memory of Zaler and his brother Howie, both trim, dark handsome young men at the beginning of adult lives that seemed on the rise. But the years had taken their toll. Zaler didn’t really walk into the court room, he shuffled. He’d gained a lot of weight, his hair was grey and seemed confused, if not in a daze and almost broken. Recently diagnosed with diabetes and a bipolar mental condition, he’s not in good shape either physically or mentally.

Out of focus, at the beginning of his personal plea, Zaler turned his back to the the judge and, in a confused manner, addressed the audience rather than the bench. For this, he was immediately reprimanded by Federal Judge John Kane who demanded Zaler turn around and face the court. For a second it seemed that Arnie had hardly heard him. Wedged between Kane, whom a few minutes later would `lower the boom’ on him, and an audience made up in large measure of local Jewish Denverites whom he had swindled, Zaler faced uncomfortable gazes from all sides. None of his former business or political connections who had gotten him off his Arizona jail sentence or helped re-establish himself once back in Denver were present. They had finally cut him off, or so it seemed.

Zaler was convicted of swindling some $2.5 million from a number of different sources – some individuals, some financial institutions – to help finance his struggling hot dog stand at Denver’s baseball, basketball and football games. The actual swindle might have been more than the amount for which he was indicted.. As reported in the Denver Post (11-07-09), Otto Seiden, a Denver victim who lost his retirement savings to Zaler claimed that `There are at least eight people that did not get into the victim list for restitution; …that had to be another $1 million.’ This amount does not include the $15 million he was convicted of swindling out of folk in Arizona and California in the 1990s.

Originally indicted by a federal grand jury on 30 counts of bank and wire fraud on March 11, 2008, Zaler jumped $25,000 bail and with an Israeli passport, fled to Israel. A year later, pressured by both Israeli authorities – there were reports that Zaler was facing fraud charges there too – and the FBI, he returned to the United States, gave himself up and was transferred to Denver for trial. Zaler pled guilty as charged; the sentencing portion of the trial took place yesterday.

Judge Kane Not Impressed…Good Intentions and the Road to Hell..

Zaler’s lawyer, Mitchell Baker, tried to cut a deal with prosecuting attorney Thomas O’Rourke that included a Zaler’s guilty plea for a reduced sentence of eight years. O’Rourke is the same federal prosecuting attorney who represented the federal government unsuccessfully in two Silverado Bank cases in the 1990s. Federal juries failed to convince David Mandarich of MDC  Holdings of election fraud. Shortly thereafter, in 1993, Michael Wise, former C.E.O of Silverado Savings & Loan was similarly found not guilty of defrauding his own bank of $1.45 million. Unable to nail these `bigger fish’, O’Rourke was more successful in his case against Zaler. (There is another albeit distant connection with the Silverado days. Judge Kane’s significant other – I am not sure if they are married – is Denver lawyer Stephanie J. Shafer. Shafer was photographed on page 1 of the February 13, 1993 Denver Post leaving the Punch Bowl bar with Wise after his `not-guilty’ verdict came in. It is not clear if she was involved in the case.)

Zaler was facing possibly 30 years in prison. His attorney. Mitchell Baker tried to convince Judge Kane that Zaler’s health and mental problems should be considered in determining sentencing. Zaler, arguing his own case, apologized to his victims, commenting meekly that `there is something wrong with me’.

His defense fell on deaf ears – including mine.

In response, after complimenting the defense and prosecuting attorneys for presenting their cases well, Judge Kane rejected the 8 year prison term sentence they had both suggested. Instead he sentenced Arnie to 15 years in a federal penitentiary and showed the defendant little mercy. Commenting on Zaler’s excuses, Kane uttered the famous dictum (which I often heard from my mother when I was a teenager): The road to hell is paved with good intentions. He added that Zaler’s intentions were usually not particularly good. He continued, elaborating on Zaler’s “persistent criminal conduct”. Kane went on:

“For many of his victims, Zaler’s acts are shameful. He is a hard-core recidivist, and sentences of lesser time imposed on him in the past have utterly failed at preventing further crimes of fraud and deception.”…”He deserves a sentence where he is too old to offend again”

Not The First Time

This is not the first time that Zaler found himself facing federal fraud charges.

In 1996, in Arizona, he was charged with more than 50 counts of fraud (and other crimes) in several schemes in which he bilked more than 15 investors out of more than $15 million. He was also charged with selling $35,000 worth of fake Arizona Cardinals and Phoenix Suns tickets. In one of his many less noble moments he also swindled $100,000 from an elderly and disabled woman distraught over the death of her mother. Commenting up this, one of my friends notes `with his predisposition it sounds like he could be a prime minister of Israel.’

For these and assorted other sundry acts against the common good, Arnie Zaler, who also wanted Arizona to celebrate Martin Luther King Jr’s birthday as a holiday, was sentenced to 14 ½ years in a federal prison of which he served 6 ½ years. He was released for good behavior reportedly with the help of several prominent – but unnamed – Denver businessmen – who vouched for his character, at least one of which Zaler later scammed. As part of his case for early release, he claimed that the prison’s inability to serve him kosher food interfered with his religious rights. He then returned to Denver, was given `a second chance’ so to speak, largely by the Jewish Community that he milked, and went into the hotdog business. Despite having robbed Phoenix’s Jewish Community blind, Denver’s opened its arms to the ex-con, helping him to set up his business and I suspect having something to do with the fact he landed choice permits to set up his hot dog stands at major sporting events.

You Only Scame The Ones You Love, The Ones You Shouldn’t Scam At All…Or, To The Degree Possible, Keep It In The Family…

Zaler’s modus vivendi – his mode of operation – both in Arizona and Colorado – was more or less the same. At the heart of it, a simple organizing principle: work and activate your political base, that being the Jewish Community. With much talk of his love for Zion, he based himself in the heart of each community’s Jewish Community (of which he is, undoubtedly a legitimate – if not orthodox – member), and, got involved in classic specifically Jewish liberal Democratic Party concerns. He had a particular genius – or perhaps an addiction would be a better term – for befriending Jews with money and/or influence – and some without – whom he would get, time and again, to invest his schemes. Perhaps there is a touch of the `old Arnie’ here, the Robin Hood approach of stealing from the rich while claiming to organize for the poor? Or is it more the sexual and psychological abuse model in which those closest to a person are its main victims, family members or friends?

And yet, one has to ask, how many times did – in this case – Denver’s Jewish Community need to get burnt by Zaler before they saw through his schemes. Frankly these schemes were – be it in Arizona or Colorado – so crude as to almost be ludicrous. Even Zaler’s defense attorney, Mitchell Baker, alluded to this fact in court yesterday, concluding that Zaler `is no Madoff’. To a certain extent, having studied Zaler’s record, I agree in the sense that the scam was sloppy and transparent. He wrote easily traceable false or purchase orders to bolster his net earning (to attract investment). In Arizona in the 1990s, he got a banker to agree to lie about his assets. In Colorado after 2002, he convinced Ryan Thomas Smith, the a corporate salesman for Kroenke Sports Enterprises to sign fake letters to investors confirming orders that never existed.

All this is flimsy nonsense of the lowest order, and the signs of a man out of control.

It’s embarrassing to Denver’s Jewish Community to have produced such graceless con artist and then to have been taken by him, not once, but repeatedly. Still, Zaler was not much different from a generation of young Denver professionals of the late 1960s and 1970s who were `on the move’, bright, bold and a little too `hungry’ to make it. A friend put it aptly and succinctly: “Zaler wasn’t much different than many others; only he got caught, probably because he didn’t do it on a large enough scale and wasn’t smooth enough” and I would add, that he hadn’t manage to become wealthy enough to buy the political influence necessary to get him off the hook as some others had.

`One of them who knew Arnie when he did his SDS shit back in the 60s’

Lacking that backing, Arnie Zaler got nailed big-time for his pathetic scams. Others using more or less the same methods, have gotten away with a lot more. In a certain sense, Arnie was trying to be like his buddies; to use progressive credentials of his youth as a spring board to wealth and power. Much has been made about how he milked and betrayed Denver’s Jewish Community, abused their trust and ruined lives by destroying their assets. This is of course true. The ones he broke, left financial and emotionally broken, were not so much his more wealthy ones, but middle and working class Jews, those who lost their retirement, in some cases their homes. They don’t have another ten million to fall back on.

Many of the people at the trial yesterday seemed to know each other; they formed a bond of solidarity with each other: Zaler’s victims. One of those in attendance, in response to a question, referred to me as `oh, he’s one of them who knew Arnie when he did his SDS shit back in the 60s’. That is, even if inelegantly put, essentially correct. I did know him when he `did his SDS shit’ – possibly the only time in his life he was concerned with the world beyond Arnie Zaler. These past years, it is not only Denver and Phoenix’s Jewish communities that Zaler betrayed. He also forgot the values of the 1960s student movement he was a part of – for an economically fairer world with more social justice.. Arnie lost his way along time ago. And he never came back, did he?

Who says there is no justice?

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Note…I am going to post links to articles, information about other people involved in the peace movement, student movement at the University of Colorado 1969-1975. Today (June 15, 2011) I learned that Jon Hillson died of a heart attack in Los Angeles in 2004, ie, some time ago. He had quite a colorful life: Below is a political biography as well as a series of tributes on Hillson.

Jon Hillson, Political Biography

Jon Hillson, Tributes

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Note 2… I have received a number of comments on related topics which I will also post here, without the names of the people who sent them..

1.” I was a CU student from 1967-1971. Was a friend of Pat Stimer’s while he was student body president.  What’s ever happened to him?  Some time ago I learned that Steve Bride and Jon Hilson had both died–very sad to hear this.”

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