By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
Steve Peterson was born into a middle-class Toledo, Ohio, family on July 4, 1941, one of Velma and Stephen Peterson's two children. He lived in Toledo until graduating from high school.
Ohio court records confirm Peterson married Mary Alice Mast in 1963. Soon after that, he apparently became a minister with the Jehovah's Witnesses, preaching in the Southeast for several years with his wife by his side.
The couple presented quite a contrast: Steve is a talkative bear of a man who can dominate a room; Mary is a tiny, somewhat passive woman with a passion for Scripture. The Petersons have no children.
Until the last decade or so, Steve Peterson seems to have sought at times to earn money legitimately. After leaving the Jehovah's Witnesses in the early 1970s, he apparently worked as a commercial photographer, then ran his own photo business in Fort Lauderdale, Florida, until 1985.
But that year, Peterson's business partner died in an alleged murder-for-hire scheme involving two ex-associates. Peterson was never considered a suspect in the case, but he considered himself a potential victim. He later told a probation officer that he moved to Beverly Hills, California, out of fear for his life. There, he continued, he'd worked as a freelance photographer until 1987.
But police records tell a different story.
FBI reports show that, in November 1985, a Stephen Charles Colapietro had advised a south Texas realtor that his company, Vericorp, was in position to finance million-dollar deals. Colapietro showed the realtor a financial statement that put his net worth at $57million.
The realtor knew immediately that the statement was fraudulent. It listed as an asset property that the realtor himself had tried to sell Colapietro, and was still on the market. Another supposed Colapietro asset listed--a $10 million amusement park in the area--didn't exist.
A local banker later told FBI agents that Colapietro--armed with a phony financial statement and a letter of credit from an Arkansas bank--had attempted to secure a $10 million loan for Vericorp.
The FBI interviewed Colapietro, and he confessed after a long interrogation that his real name was Stephen Charles Peterson and that he'd tried to defraud the bank. The feds arrested Peterson, and a grand jury indicted him in November 1985 on three felony charges.
He spent about a month in jail before making bail, which he jumped before his trial could begin.
Peterson turned up in Minnesota about 18 months later, under the name Stephen Charles Marino. Peterson again presented falsified personal financial reports, this time to the owner of a motel. He then agreed to buy the motel for $2 million.
The deal never was consummated. But the owner complained to police that Peterson had stolen furniture and equipment from the motel before the deal fell through.
Police arrested Peterson in April 1987, also charging him with stealing $50,000--his commission for arranging a $500,000 loan that, naturally, never came through--from another Minnesotan.
Peterson and his attorney worked hard to secure a soft plea bargain. His promise to help Florida prosecutors in the still-unresolved murder case weighed heavily in his favor.
Prosecutors in Minnesota and Texas agreed to let Peterson plead guilty to all charges, in return for a maximum prison term of two years. He served about nine months in a Duluth prison camp before being paroled.
On February 16, 1989, a Minnesota probation officer concluded a report about Peterson with a warning: "This defendant must be monitored closely to assure his activities, including business deals."
Six months later, Peterson went into business in Phoenix.
Nobody knows why the Petersons chose Arizona as their next stop, but the state proved, for a time, to be hospitable.
Somehow, Peterson already had developed a network of associates by the time hemoved here. Among them were local "swappers," a subculture of wheeler-dealers who trade property and goods with each other.
Some newfound allies were legitimate; others were kindred spirits in crime. The latter included fellow white-collar crooks adept at swinging deals, then "papering" their victims as they milk their assets--generally by tying up properties in court to avoid paying for them.
Peterson claimed ownership of new companies to reestablish himself in the fraud game. One was the American Security Corporation, incorporated in the state of Nevada in September 1989. Another was the Keebee Corporation, a Delaware outfit whose stock was worth pennies, its operations nonexistent. And there was the Preservation Corporation, incorporated on May 30, 1990, under the laws of the Dominion of Melchizedek.
The Dominion does not appear in any atlas or almanac. That's because Melchizedek--named after an Old Testament king who blessed Abraham--exists only on paper, the creative and illegal enterprise of a career thief who called himself Branch Vinedresser.
The Dominion's public relations arm--dubbed the Universal Bureau of Information--explained itself in a 1990 release: "Although the Dominion claims jurisdiction over the entire Earth according to prophetic scriptures, [it] is only making official title its claim over the Island of Malpelo."
Located in the Pacific about 300 miles west of Colombia, Malpelo was "the mid-Pacific's leading financial center," it continued.
However, the public relations gang failed to point out one detail: The island is sometimes submerged, depending on the tides.
"Communications with the Dominion of Melchizedek are handled by Ambassadors throughout the world," founder Branch Vinedresser (his real name is Mark Logan Pedley) noted in one missive, which he signed "Superconducting Truth, Life and Love."