Chapter 37: Mr Sandman

The following is an excerpt from the chapter where Gary Kremen's lawyers suddenly realise that Stephen Cohen has taken them for an even bigger ride than they thought. If you enjoy this and other excerpts, please consider buying the whole book.

"May I ask a question?" were the first words that Roman Caso, the representative for Ynata – the company at the heart of's complex corporate web – spoke following his swearing in. It was three p.m. and Caso was facing Carreon and Diestel, with Dorband acting as his representative. Caso only speaks Spanish so a translator was acting as the go-between. "It's fine with me," Carreon responded.

"No one told me anything about testifying. I mean they told me to be here because it had something to do with something that has cost the company a lot. I thought maybe it was a negotiations meeting or something like that. They told me to be here because it had something to do with something where my name came up, and I'm with that company. Aside from that, I have nothing to do with it. I mean, I don't know what's going on here."

It was the first time that someone other than Stephen Cohen had been quizzed about, and in just a few seconds the entire edifice painstakingly built up by Cohen over five years crumpled. There was no international inter-connecting corporate structure with a series of boards overseeing hundreds of staff placed across the world. Stephen Cohen was, and the rest of it was pure invention – or, more accurately, bullshit.

Cohen had turned up an hour late and spent the morning testifying as the designee of Sand Man Internacional. The deposition played out the same tired old game, with Cohen providing none of the documents he had agreed to bring, talking in circles, giving nothing away and making a series of empty promises.

But the crucial fact was that the judge had also ordered that a designee from the other defendant, Ocean Fund International/Ynata, be made available. Since Cohen could not be the designee for Ynata as well as the other companies without completely undermining his own argument that all the companies were no more than alter-egos of Stephen Cohen, he had no choice but to put someone forward. That person was his business partner Roman Caso. The only problem was that Cohen didn't tell Caso anything about it – for the simple reason that Caso knew nothing about's business. We can only assume that Cohen hoped Caso would feel obliged to go along with the questioning, say he wasn't able to answer the questions, and Carreon and Diestel would leave with nothing. It was a huge gamble, and it very quickly became obvious that Cohen had misjudged his business partner.

"If there is a questionnaire, or something like that," Caso ventured. "If there's something planned, you should have told me. You just can't do this like this. I mean, I have a very important call. I'm having a problem with clients, so I have to go and take care of it. I mean, I can't be here."

This was all spoken in Spanish and translated, leaving the unusual pauses that these situations create, but even so it rapidly became clear that things were not going according to Cohen's plan. In his panic, Cohen exposed a five-year lie that he could speak "no more than two or three words" of Spanish by holding a long and increasingly angry exchange with Caso in his native tongue. Unfortunately for him, Carreon is also fluent in Spanish, and followed the conversation exactly, at one point breaking in to tell Cohen in English: "I would prefer not to be referred to in that way."

As Carreon would later explain, Cohen had referred to himself and Diestel as "fucking assholes", to which Caso had raised an eyebrow and told Cohen he wasn't sure who the fucking asshole was. Caso then told Cohen it was his problem and he would have to sort it out himself. He then stormed out of the room, swiftly followed by Cohen and Dorband, leaving Carreon and Diestel looking at each other in amazement. Even though both of them had spent months digging into his affairs, Cohen's extraordinary ability to build a false reality had caught them out. As the extent of Cohen's fabrications began to dawn on the two lawyers, Cohen and Dorband came back into the room and the deposition started up again.

Carreon spoke first: "I'm just going to go ahead and make a statement just to summarize what I observed in case it wasn't on the record. My understanding is that Mr Roman Caso appeared as secretary and vice president of Ynata Limited. He was sworn and then refused to proceed with his deposition for grounds that he appeared to state on the record adequately. And I don't know if it was on the record, but if you would confirm, Mr Dorband, that you do not represent him."

Dorband was flustered. The truth was that he was an extremely talented attorney who had taken on an exciting case; but he had got sucked further and further into Cohen's affairs. By the time it was over, the once ferocious Bob Dorband was left hiding from this author in the office of an insurance company in Portland, Oregon, pretending he hadn't heard the knocking at the door. He then pleaded that the name of the company he worked for be kept off the record in case it rebounded on him.

Dorband had in fact tried to get out of the case several times, filing official motions to be allowed to step aside as Cohen's attorney, but every one was fought and won by Kremen's team. Dorband was in this until the end, just like everyone else. And after it was all over, Wagstaffe was very kind, even sympathetic towards him: "Bob Dorband knew that his client was a crook – he must have known. But he was a good lawyer."

The tide was turning, and more than anything it was the experience in Mexico that finally broke the bond of trust between client and attorney for Dorband. Even so, he continued to fight for Cohen. With only Carreon and Cohen able to understand Spanish (and with Roman Caso having stormed off), it fell to Cohen to try to explain the link between the fantasy world he had built and the real one that had so rudely interrupted proceedings. "As a representative of Sand Man," Cohen began, "I will state for the record that Mr Caso came in his own individual capacity to testify. He knew he was going to testify. I don't know if he understood what he meant by testifying, because it's different in Mexico than it is in the United States. But he's extremely upset. I think the record show, it clearly shows, that I tried to calm him down. He is completely irate. He's livid."

What is he livid about, Diestel asked. Cohen casually stretched his arms: "What is Mr Caso upset with? Your client has cost our company a substantial amount of money based on a felonious complaint, and Mr Caso is aware of the damage it's caused. He's aware of the amount of aggravation it's caused. And if it was up to Mr Caso, he would go after individuals personally. He's that upset. I don't take that view. He does. And, unfortunately, I have to work with him. We don't always see eye to eye, but that's not something I can control. It's like a marriage: sometimes it's good, sometimes it's not so good."

In a single breath, Cohen had pinned the blame on Kremen, then on Caso, made implicit threats and held himself out as the peacemaker. Carreon and Diestel had seen and heard enough. They would never listen to Cohen or Dorband done through official letters. Diestel was so angry he looked straight into Cohen's eyes and told him: "As you have done your whole life, you speak with a poor tongue, sir," before both he and Carreon walked out and flew back to the United States.

They went straight to Judge Trumbull, who immediately ordered that a series of Ynata employees appear for deposition in San Diego in two months' time. Cohen claimed that none of them were able to attend because they couldn't get visas; Trumbull rejected his argument.

And so, two months later, Carreon, Diestel and a translator were waiting for Derrick Taylor (Ynata president), Fernando Rodriguez (senior vice president), and Rodolfo Gomez-Aguilar (the "sole shareholder" of Ynata) to turn up for their depositions when in walked, yes, Stephen Cohen and Robert Dorband. Stephen Cohen would, it turned out, be the only representative of Ynata appearing that day, but he was able to speak for the others. Incredibly, Carreon and Diestel went through the façade of interviewing Cohen, who said nothing of any value. It was a massive anti-climax, but at the same time it marked the end of normal legal interaction. Cohen had propped up his façade for as long as he could, but they all knew it was over: the Wizard of Oz had been exposed; Cohen's lies had run their course.

"I'm going to be out of town until probably the tenth of December, and then I will be able to continue this deposition," Cohen said just before leaving. But it wouldn't be until 5 December 2005, five years later, that any of Kremen's lawyers would sit down again in the same room as Stephen Michael Cohen. He knew the game was up and he was leaving town with his money in strong chests tied to the back of his wagon.