The book's genre is creative non-fiction: it is 85% factual. It was inspired by my representation as a lawyer of a most unpleasant client over an eighteen month period. The book examines the making of this career criminal -- his professional history and evolvement. In short, Virtual Vice follows the rise and demise of a sociopath, portrayed in the book as Scott White, who transitioned from the organized crime of the Cali Cartel to the organized crime of Wall Street. The book's protagonist is based upon a real life confidence man, Greg Scott Luce. Luce began his professional life as one of the largest cocaine distributors on the West Coast. When the DEA closed in, Luce evaded apprehension and laundered unseized drug money through his Information Technology startup, Metropoleis III Multimedia (MIII). Certain organized crime contingents remained silent partners in his new business.
MIII was a Seattle based broadband content provider, streaming audio and video from live rock concerts to subscribers over the Internet. Although business was thriving, its CEO soon fell back on old habits, structuring MIII as a Ponzi scheme and embezzling from investors.
Seven years after the founding of MIII, August 2001, I was retained as counsel to review intellectual property issues. Approximately twelve months into my work, original note holders began contacting me, expressing concern that they had received no annual statements from MIII -- for that matter, no communication at all from the board of directors or corporate officers for several years. More troubling, to a man, every investor had demanded buyback upon maturation of their convertible note loan agreements in 1997. Luce refused to honor the promissory notes. The paper trail showed Luce used money from the non-accredited investor pool to line his own pockets, and money from new investors to pay contracted employees that held stock options; thereby, perpetuating the ruse. A textbook definition of the classic Ponzi scheme with a slight twist: using money from new investors to pay dividends to original investors.
I approached the CEO with my concerns. He was non-responsive, as was the board. As I dug deeper into the CEO's history, unearthing a deep list of accounting firms, law firms and contractors owed money, I came to learn that this was one of Luce's tricks: secreting money in his attorneys' client trust accounts, knowing that the lawyer would be obliged to release the funds to Luce as client, regardless of whether the money was dirty. In addition to confronting shareholders with Luce's malfeasance, I reported his actions to attorney general offices in two states. Formal investigations into Millennium III and its CEO commenced.
As external scrutiny, and civil and criminal suits mount, CEO Luce began to come unhinged, as did his progressively more crazed and bizarre business ventures. He fled Washington State and setup shop in Arizona. Targeting the Sedona market, he attempted to tap into the New Age zeitgeist. After several false starts, he used his broadband media delivery system to back an equally opportunistic religious huckster in peddling a New Age theology to the masses via the Internet.
When I set out to chronicle my adventures representing a con man and his crooked corporation, little did I know the publication date of Virtual Vice would coincide with contemporaneous, Wall Street Ponzi schemes of an epic magnitude.