By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
The closing date passed without payment from Peterson. The Buells hired an attorney to sort things out.
On March 5, Bill Buell took the precaution of applying with the Coast Guard for a new certificate listing him as president of Argonaut. The same officer with whom he'd spoken in earlier calls was on duty.
But things were truly twisted.
The officer, Ann Vollmer, issued the replacement certificate to Buell on March 15, 1991. That day, however, Peterson executed a fraudulent bill of sale that allegedly transferred title of The Capriccio from Argonaut to the Gulf Eastern Corporation. In return, he was to obtain 100 percent of the stock of a Gulf Eastern subsidiary called Bass 'n Man.
Gulf Eastern, a holding company in the mold of Peterson's American Security Corporation, had a Seattle address. But it actually was owned by a Valley man named David Morton. To this day, it isn't clear if Peterson was working intandem with Morton, or ifthe pair was trying to scam each other. (Morton couldn't be located for comment.)
But also on March 15, Morton signed a promissory note with the owner of a Phoenix piano store. The piano man agreed to lend Morton $50,000, to be secured by Gulf Eastern's alleged new "asset," The Capriccio. Morton promised to satisfy his debt within ten days, plus pay an umbrella interest payment of $25,000. (The piano-store owner later filed a lawsuit to get the money owed to him or the boat. He got neither.)
On March 25, Gulf Eastern applied with the Coast Guard for its own certificate of documentation for the yacht. This was just ten days after Bill Buell had gotten a replacement certificate, and about a month after he'd first contacted Coast Guard clerk Ann Vollmer.
Yet Vollmer accepted and recorded the fraudulent bill of sale for The Capriccio, and issued another certificate of documentation. Records show the Coast Guard never contacted Buell or did any investigation into the increasingly murky affair.
The Buells' woes mounted. Bill Buell learned in April that Peterson had attempted to fraudulently transfer The Capriccio's title to Morton.
Then the Buells got a break. While reading a yachting magazine, they saw The Capriccio in an ad which offered it for sale for $500,000. But the ad copy didn't describe The Capriccio at all. They phoned the listed salesman, whom they knew. The salesman explained that he'd obviously used the wrong boat in the photo, then mentioned an intriguing phone call he'd received.
"He said he'd just gotten a call from a guy named Morton," Buell says. "The fellow needed a skipper to pilot a boat he'd just bought, and he wanted to find a buyer for a quick sale. He gave me Morton's number, and I called him."
"... He said, 'I own that boat fair and square and I'm coming to get it.' He kept repeating, 'Due diligence, due diligence.' I told him that it was my yacht, and like hell he was going to take it."
The Capriccio then was moored in Bellingham, Washington. Buell chained it to the dock, loaded a gun and moved onto his yacht awaiting the arrival of Morton, who never came.
"Suppose Morton had found a skipper and had gotten control of the yacht," Buell says. "Then he had sold it to someone else and transferred his so-called title to that party. This is all plausible. Eventually, it might have all come out in the wash, but who knows?"
By now, Buell was talking with the Arizona Attorney General's Office, which had gotten wind of Stephen Peterson. Several people had approached the authorities; some had been victims, others wanted to volunteer information before they became suspects.
In late April 1991, Pinnacle West evicted Peterson from his offices. He had been a tenant for nine months without paying any rent.
That May 3, agents from the Attorney General's Office executed a search warrant of Peterson's office and home. They confiscated paperwork as well as the presidential portraits that hung on the walls.
A grand jury indicted Peterson on nine counts of racketeering, fraud and securities-law violations. The charges stemmed from The Capriccio caper and the $110,000 loan from Veale.
But Peterson's arrest did little to help the Buells. In August 1991, the Coast Guard declined to amend Gulf Eastern's continued "ownership" of The Capriccio. We are mere scribes, its lawyers claimed.
"The Coast Guard in effect assisted Mr. Peterson in perpetuating this fraud," Buell's attorney responded in a letter of protest.
The Buells were forced to file a federal lawsuit to regain their yacht. Months passed, then years. The clouded title kept them from selling--or even using--The Capriccio. The nightmare didn't end even after Peterson later confessed in writing to having perpetrated a fraud.
It took the Buells until 1994 to win their case. Only then did the Coast Guard agree to affirm the couple as The Capriccio's rightful owners. In 1994, Geri and Bill Buell sold their yacht at last.
"We always wondered what was going to happen when Peterson got out," says Geri Buell. "We never expected much in the way of restitution, though he was supposed to pay us $90,000. But we just wondered what he'd be up to."