The Traders

Chapter 1

January 22, 2015

Gathered in the back room of Los Amigo’s restaurant in Casa Grande, Arizona, for their regular meeting, Ivan Schmidt eyeballed the other real estate agents sitting around him and concluded that most lacked his mental acumen. Convinced that he had a superior intelligence, Ivan controlled what took place in the group overall, but allowed others to run the meetings. He insisted that the group begin their meetings with the Pledge of Allegiance and a prayer, believing that they conveyed an image of ethics and compassion--two attributes he despised. His goal in life was wealth, and it didn’t matter how he acquired it, just that he did.

Realizing that his own distrustful nature made others defensive, Ivan compensated with an air of friendliness. An astute observer would realize that Ivan was insincere, but to the naive he seemed genuine. Members quickly learned that challenging him was a mistake; his acerbic tongue struck rapidly, causing even the brighter and more experienced members to back off. They knew that he was unscrupulous, yet sharp enough to avoid being caught. Destroying others never bothered him. He used whatever tactics were needed to get his way.

Few knew Ivan’s background, and none were aware that he had been disbarred as an attorney. The fact that he had lost his real estate license was common knowledge. He deliberately skirted laws, yet prospered monetarily. He covered for his lack of a license by convincing the group to open their meetings to unlicensed people, especially property owners. He wanted access to what they owned. And inviting owners in was like shooting sitting ducks--it was an easy sell. Many members were anxious to have new blood around, as they had grown tired of trying to take advantage of each other.

Ivan was the product of a family in which dominance and power prevailed. He was the only child of a father who was an arrogant, aggressive dockworker. A union steward, Ivan’s father was unbending in his dealings with almost everyone. He talked tough, and lived the same way. It didn’t matter who he was dealing with as he drove a hard bargain. Management hated him. His involvement in union contracts always ended confrontationally. Compounding management’s bitterness was his tendency to protect and cover up the misdeeds of every dockworker, no matter how wrong their behavior.

At home he reminded his wife and Ivan that he was the boss, the breadwinner. They were to do as told or else. He projected the appearance of strength; but his wife, of weakness. She waited on him hand and foot, giving in to his every demand. His temper was volatile, and she possessed a number of scars as a result. She never stood up to him or talked back and often cried herself to sleep, and more than once she ended up in a hospital because of his abuse. It wasn’t often but it was often enough. Fearful of telling doctors the truth, she made up excuses; she had a ready alibi to explain why her eyes were blackened or her face was swollen. One doctor, suspecting that she was covering up for her husband, requested an evaluation by a social worker. She blamed the bruises on clumsiness. The social worker talked about a shelter for abused women and children, emphasizing that women sometimes have to leave their husbands in order to protect their children. When asked if Ivan was at risk, she would lie and say no. She didn’t share the fact that her husband often called their son that little wimp of a son, a mommy’s boy. He seemed to think that ridiculing his son would make him tougher.

Ivan grew up fearing his father. He constantly felt insecure and worthless around him, yet desperately wanted the approval that never came. He felt he wasn’t good enough in his father’s eyes, and never would be. Over the years, those feelings changed. Self-reliance brought resentment. He admired the power that his father wielded, and vowed to operate in the same way.

Though he never stood up to his father, he emulated his behavior by rebelling against his mother. He resented her for not protecting him, and that resentment led to defiance and acting out. Though able to control Ivan as a child, she succumbed to his aggressiveness after he entered adolescence. She knew that her husband would never back her, so she added the experience of fending off an abusive son to her sense of being a victim.

Older boys often bullied Ivan. Not physically imposing, he stumbled through puberty and adolescence. Though he tried, he was no match for strong physical aggression. He withdrew and became a loner. He took refuge in his room where he read, fantasized, and schemed. Getting back at people became an obsession; thoughts of retribution and revenge constantly entered his mind, especially after he was raped by a group of guys.

Much older than he was, they told Ivan that they were going to look at some pornographic pictures after school and that he should stop by. Apprehensive but desperate for friends, he joined them, only to learn that they had something else in mind. Quickly overpowered, his clothes were removed and two held him down while the leader raped him. Another took pictures. When finished, the leader told him to stay silent. They told him the pictures would prove it was consensual, and it would be his word against theirs. They laughed at him as he slunk out the door.

He limped home feeling dirty, filled with shame and embarrassment. There was no way he was going to tell his parents. His father would berate him for not putting up a fight, and would forever question his sexual orientation. His mother would run to church to pray for her son, that he be completely cleansed from the experience. It was an ordeal that he would never share with anyone, nor ever forget. Solace came in the form of comics, the more violent the better. Ivan was in pain, and someone would have to pay for it.

Armed with the belief he had a right to screw people, he felt prepared to meet the world. He fantasized that his revenge would be sweet. He reasoned that the more covert he was, the better--less chance of getting caught. Ivan trusted no one, and was deeply lonely. Allowing others to get close to him was too risky. Full of secrets, he kept people at a distance, and lying and manipulation became art forms.

Ivan’s parents worried about him. They perceived him as being moody, angry, and definitely a loner. Because he had no friends, they bought him a pet macaw which he named Peety. At first he detested the thought of having to take care of a damn bird, but soon Peety became his friend, his confidant. He could rant and rail about the injustices in life and Peety would cock his head as if he were listening. He soon came to feel that Peety would always be there for him. It was the one thing in life he could count on.

Ivan’s reading and comprehension powers brought him notable recognition. He was considered academically gifted. And while peers publicly mocked him, they privately expressed envy for his skills. His teachers credited his achievements, but privately acknowledged that he was a distant and troubled kid. They felt that he was hard to get to know and even harder to like. He was viewed as intelligent, guarded, strange, and even a bit eerie.

Ivan was offered a number of college scholarships but only one interested him; it was from the University of Arizona in Tucson. He liked the idea of living away from his parents. When he moved out, so did Peety. Once again, he excelled academically, though he spent little time studying. He scored high on the LSAT exam and was accepted to the University of Arizona Law School. He saw the law as his avenue to wealth. When he graduated, he joined a firm in Nevada that specialized in real estate.

But his career was short-lived when his propensity to cut corners and manipulate clients soon got him in trouble. The partners severed ties with him. They feared an investigation into his practices could widen to include theirs. Shortly thereafter, the Nevada Bar Association disbarred him, but by that time he had secured a real estate license in Arizona. How the Arizona Department of Real Estate never found out he had been disbarred in Nevada remained a mystery.

Ivan’s influence in the investment/exchange group was supported by Elmira Unbar. She had been a member for fifteen years. Elmira despised Ivan, and felt he was unscrupulous. At the same time, she believed that he was a necessary evil because he could control people, and she admired that. She feared throwing him out, because his leaving might destroy the organization. She sensed that he would take too many members with him. Not a secure person, Elmira loved having something to do. She dreaded loneliness, which often led her to depression and excessive drinking. She and Ivan were similar. Each had spent their lives searching for wealth. It was the reward she believed would bring her happiness; instead its pursuit had only brought despair. Failed marriages and dysfunctional kids had taken their toll. An attractive lady in her early years, she lost respect for herself by compromising her principles often. She often fell victim to unscrupulous suitors thinking she could lead them to wealth. However, it didn’t take her long to realize she was being used; it was a lesson she repeated many times. In the end it showed; her face and body looked worn and weary.

Eric Langham was a gentle man. His real estate practice brought him both joy and despair. Representing clients proved to be tremendously frustrating. Their indecision, lack of honesty, and in some cases, deliberate attempts to go around him drove him to give up representing others, and instead to operate on his own as a principal. He felt his chances for making money were much greater if he could buy, sell, and trade properties he controlled, rather than put up with the idiosyncrasies of clients.

Unfortunately, many of the deals he pursued were risky, and more than once he filed for bankruptcy. Each venture put pressure on his conscience. He feared telling the truth, thinking that by revealing too many details, buyers and sellers would back away. He relayed only what he felt he had to. Though essentially a decent man, the internal battle created stress, and because of that his practice suffered. Operating this way invariably caused him to be strapped for money, which made him a prime target for Ivan. Ivan had access to funds, but his terms included both control and manipulation.

Eric married his high school sweetheart after returning from a stint in the army. Though qualified for the GI Bill, he decided to work rather than pursue his education. With his VA eligibility, they bought a home and started their family. Dissatisfied with working for a company and getting a weekly paycheck, he began dabbling in real estate. Though his wife was against giving up a secure income, she finally consented; her hands were full, running a home and raising three kids. Soon he was in real estate full-time. He assured her their lives would be better. His wife dreamed of owning a home in a luxurious area, as image was very important to her and a home signified security. Eventually she agreed that real estate would be the best route for achieving that. Unfortunately, the market turned and so did sales. Their savings were slowly depleted.

Eric put in ridiculously long hours, and the lack of income was beginning to show. He approached his wife with the idea of her working part-time. She was against it. Basically an insecure person, she wanted to stay home. She told him that he should give up real estate and get a paying job. He was opposed to that; as a compromise he offered to work part-time if she would. Reluctantly, she agreed.

The money eased the financial strain but other problems developed. She started enjoying her new status. Soon she was a supervisor, which required her to put in longer hours. Eric had always handled the decisions and disciplinary issues at home, and now she was forced to do both kinds of action on the job. Unable to face personnel problems, she turned to alcohol. Bitter arguments ensued between them. As her income rose, so did both her reliance on alcohol and resentment towards him. Their personal life ended.

They remained together for economic reasons and for their kids. Then came the affairs. Convinced that she was justified in cheating on him because he wouldn’t give up real estate, she warmed to a number of lovers. When asked if she was unfaithful, she became defensive, claiming he was paranoid.

She was a master at this. She never gave a straight answer, instead always answered a question with a question. She feared telling the truth, fearing that it would result in a judge deeming her morally incapable and taking her children from her. Though she wasn’t totally enamored with the kids, she reasoned that having her children taken away would be a huge black mark against her. So the affairs and the lying continued. Finally, Eric had had enough of their impersonal relationship and offered her a divorce. She accepted and promptly blamed him for breaking up the family.

Eric had found a large parcel of land in Arizona he became very interested in. The sellers were unhappy. They had never seen the land nor did they have any intention of seeing it as it came to them as part of an inheritance. They lived on the East Coast and the only term they understood was cash. They had no interest in accepting a down-payment and carrying a note for the balance, because according to them, that’s not the way we do things on the east coast. What they failed to understand was the fact the land was on the west coast, and that the majority of the buyers did not have the cash, nor could they get it.

Going to the banks to borrow money to buy land was a waste of time. The banks, though on the west coast, had an east coast mentality. They would not lend money with land as the sole security. Thus, land stagnated on the market. Eric had no problem with the asking price but all of his offers were rejected because he couldn’t get them to budge on their demand for cash. Convinced the profit would be huge once he owned and split the land into smaller parcels, he tried every lender he knew, but none were willing to give him the money. Setting aside his better judgment, he called Ivan.

Ivan was ecstatic; the thought of controlling and manipulating Eric appealed to him a lot. Eric was a digger, someone willing to beat the bushes every day looking for real estate opportunities. He knew that if Eric’s desperation for money grew intense enough, he would sign a note that would have him tied up for years. His freedom would be costly, in more ways than one.

The sellers, at the advice of their attorneys who were equally desperate to get their hands on the money, sensed that Eric was anxious to buy the land so they held out for cash. Backed into a corner Eric agreed to Ivan’s terms. An annual interest rate of 25% with the note secured to Eric’s home, car, and the land. On top of that, he had to take out a term life insurance policy for twice the amount of the loan, with Ivan named as the beneficiary. Eric pondered the conditions of Ivan’s terms. He was convinced he could split the land and get out of Ivan’s clutches, but he winced at the fine print that said Ivan had final approval on future sales. He had never heard of that before. Lenders might require other property as security but would not require involvement in the terms of sale. Ivan told him they could work things out if there was a problem; he assured him they could resolve any difficulties that might arise. Eric knew Ivan’s assurances were all lies, but signed the contract nevertheless. Included was the requirement that Mercado Title Company would handle the paperwork, to insure everything was done correctly.

Chapter 2

Mercado Title was a small, privately-owned title company headquartered in Arizona that handled real estate closings for real estate brokers, attorneys, and private investors. Jorge Padilla, the president, and Juan Lopez, the escrow officer, both profited nicely from their affiliation with