The swindle that threatened to change boxing

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How Harold Smith almost conquered the boxing world with bent cash

“HE’S living in Dubai right now,” Gerry Cooney told me, the giant’s bright eyes smiling at the mention of the man’s name. He was talking about a man called Harold Smith, the man behind the truly amazing Wells Fargo bank swindle. It was the swindle that threatened to change boxing, a swindle that should be a massive movie. A swindle that was very, very real. And Gerry was right in the middle of it, an innocent observer to the chaos.

At the heart of the madness was a visionary crook; his vision to takeover boxing included using the name of the Greatest, Muhammad Ali, as a calling card. Ali agreed to Smith’s mission, not the criminal part, just the philanthropic part. Ali’s name was like a magnet of respect and, for about two years, just about everybody else in the boxing business in the late ’seventies wanted to be a part of Smith’s lucrative vision for boxing; Smith was the new cash cow. There seemed no end to Smith’s money.

And Smith loved to throw a party for his boxing friends and their friends. The party in Las Vegas, in October 1980, on the night Ali lost to Larry Holmes is legend; the participants not quite as keen now to be identified as they were then to be a part of the night. Many had been shuttled on private jets from Los Angeles and given the best seats at the fight. At the hotel that night, mirrors were removed from the bathroom walls in suites, piled high with cocaine and the dawn was bright before the party even started to fade. After the fight, at the Carriage House hotel, where Smith had 50 rooms for his guests, there were so many women in the lobby that it looked like a Miss America pageant, according to one fighter. The FBI has the full list.

In our sport, rumours about high paydays, easy money and a very fun lifestyle spread like a fast and violent disease. There has never been a cure for rumour in the fight game. Smith held court like a corrupt pope, listening to your wish and then dispensing cash on demand.

The money? Well, it was not his.

Smith was able to withdraw 21.3-million dollars from a Wells Fargo bank in Beverly Hills over little more than a two-year period. This was accomplished, according to the FBI records, “through an internal manipulation of funds involving 13 accounts.” Smith had a man at the bank, his inside man. The man filled bags with cash from bogus accounts and this went on for two years. The money was used to pay boxers crazy sums for fights; it really is that simple and that outrageous.

It was a story of fake names, false histories, lies, inventions, magic tricks and real money being delivered in bags.

Mickey Duff got $250,000 one afternoon in a motel room for a planned fight between John L. Gardner and Ali, young heavyweight Tony Tubbs got $50,000 for signing and Earnie Shavers got $300,000 on another day in another hotel room; Shavers took an hour to count it. Duff kept it, never spent it and reported it when Smith was eventually arrested. Nobody ever came for it; it could still be in the bag now, somewhere in one of Duff’s old flats. Big John L never got a penny, by the way. Manny Steward and Tommy Hearns took their bags – all legal, by the way. Nobody had any reason to doubt a licensed boxing promoter. There is a long and suggestive list of men who received a bag of cash from Smith. They are all guilty of nothing more than greed and that, in our game, is a basic requirement; jab, greed, guts, ego, discipline etc.

Larry Holmes, world heavyweight champion at the time, said “No” to 1.5 million dollars, Smith increased the deal to two million and promised to have somebody fly in with the cash; Holmes still declined. Seth Abraham, at HBO in early 1981, also declined the bag. Seth claimed it was full of more money than he had ever seen. Smith’s pockets were packed, he always had a bag and spare sack, described as a “pillowcase”, stuffed with dollars.

Don King and Bob Arum watched from a safe distance as Smith made his move on their fighters and on their business. “It makes no sense,” Arum said, when told what Smith was offering boxers for fights. Smith particularly annoyed King.

The purses received by Pipino Cuevas and Tommy Hearns for their world title fight in Detroit in the summer of 1980 were reported to be five times more than normal; Smith was spending the money, but the problem was that it was not his money to spend. Muhammad Ali was ringside for the flight, flown in on a private jet, feted by Smith. And he, obviously, had nothing to do with the swindle.

And then in early 1981 the investigation turned serious. The game was over, the rumble was on, the bank was raided. All future fights were scrapped, including a four-fight bill of world titles costing eight million dollars planned for February at Madison Square Garden.

The hunt was on for Harold Smith and he went on the run. He also contacted various members of the American fight media to tell them that he was an innocent victim, caught in the middle of a 200-million-dollar internal swindle at the Wells Fargo bank. That was another lie; he was captured and found guilty of 31 charges of embezzlement and sentenced to nine years in prison. There was more than a suggestion that he was still advising boxers from behind bars.

He served five years and three months before being released. He was then granted a licence by the Californian commission to work again as a boxing promoter. Thankfully, he kept a low profile after prison and that continues to this day.

There is a rare book, The Empire of Deceit, about his game, capture and fall of Smith; it is quite exceptional. It blurs the thinnest of lines between fact and fiction when the fact is as crazy as any fiction. There is even a bit of Shirley Bassey in there and Geneva hoodlums, a kidnapping and depths of deceit and denial that could be used by criminals as a guidebook to survival.

“He was an interesting guy,” Cooney confided. It’s not often that big Gerry uses understatement.

Harold Smith is still at large in Dubai, mixing in the finest of circles, no doubt as smooth as ever in exile.

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