Getting Busted In Greece, Part One

FEATURE by Willard Manus

The first time I got busted in Greece was in 1972, when I was in Athens, staying with a friend named Steve Kowald. Steve was an American who had been living in Europe for the past five years, working for IOS, a Swiss-based investment company headed by yet another American, Bernie Cornfeld.
IOS was flying high in those days. Thanks to its aggressive sales and marketing efforts it had sold millions of dollars’ worth of mutual funds and annuities on the continent. It had also made equally impressive profits for its clients, earning them annually as much as 20% interest on investment.
Steve was one of IOS’ best salesman, a real hard-charger. To reward him for his achievements, Cornfeld offered him a new job: kick-starting an IOS life-insurance company in Greece. It made good business sense, because at the time Greeks could only buy personal insurance policies from one of the country’s handful of banks. These conservative, state-run institutions had little interest in the insurance business; consequently, they made it fiendishly difficult for the average citizen to buy a policy.

Steve moved fast to fill the vacuum. He moved to Athens, opened an office, hired a bunch of hungry salesmen, trained them well, and turned them loose on the Greek populace, using newspaper, magazine and radio ads to stir up interest in low-cost, easy-to-obtain life insurance.
The result was quite remarkable. Hundreds and then tens of thousands of policies were sold in the first six months. The drachmas poured into the coffers of IOS; Steve and his crew became flush with success, proud and cocky as bullfighters.

The story had a kicker to it, though. IOS’ business in Greece was illicit.

The insurance policies themselves were genuine, having been underwritten by a Swiss bank. It was the company itself that was suspect, having failed thus far to obtain a government license to operate in Greece.

Steve had done his best to legitimize the operation; he’d hired lawyers, written letters, made presentations to the relevant authorities. But the Greek banks, united in their opposition to IOS, put pressure on the government to keep these foreign upstarts out of the market. Greece for Greeks only was their mantra.

Steve didn’t let that stop him, though. He and his salesmen simply went underground. They closed the IOS office and worked out of their homes, trying to fly under the radar. The ploy worked for a while and they kept writing policies; but then came the day when Steve got a panicked call from Spyros, his closest friend and ace salesman.

“The police have been ordered by the Minister of Interior to find and arrest each one of us!”
Steve slammed the phone down and hurriedly began to destroy his files. As I happened to be a guest in his Neo Faliron house, I naturally offered to help him. We spent the next two hours scooping up paperwork and setting it afire in a backyard fireplace. Noxious smoke billowed up into the sky and cast a pall over the neighborhood.

By nightfall, Steve was gone; he didn’t tell me where. “It’s best you don’t know, just in case the police decide to question you.”

“Maybe I should disappear myself, move into a hotel.”

“You’ve got nothing to worry about. You’ve never worked for IOS. You’re completely innocent.”
His advice seemed to make sense. It was Wednesday; I was going back to Rhodes on Friday. The police might not even show up before then. But even if they did, I surely would not be considered a person of interest to them.

Big mistake. The police came at dawn the next day, two uniformed cops and a detective. They seemed surprised to find me there and kept checking my name against those on their master list.
“Who are you and what are you doing here?” the detective asked finally.
“I am a friend of Steve Korwald’s, staying with him for a few days.”
They went through all of my belongings and found, in a jacket pocket, a big roll of drachmas.
“Where did this money come from?”

I couldn’t very well tell the truth, because, like Steve, I was working unofficially in Greece. That didn’t apply to the money I made as a journalist and novelist; that money was earned abroad and was transferred to me, legally, through the National Bank of Greece. But about a year earlier, I had met on the beach at Lindos a plump, roguish German named Walter Schaub who ran a company that published the international telex directories.

“I need a sales representative in Greece,” Schaub said. “I sink you can do zee job.”
“But I have no sales or business experience,” I replied.

“Doesn’t matter. You speak Greek and know how to handle yourself. I think you vill do vell in ziss job!”

Schaub paid my way to Athens for some training. The job involved cold calling, walking into an office and making a pitch for the company to buy a set of the directories.

Much to my surprise, I found the work easy and remunerative. Many Greek businesses, especially the ship-owners and -operators in Piraeus, used telex all the time; some of their offices had as many as a dozen machines clattering away, spitting out reams of messages in rapid-fire fashion. Having a set of international directories with up-to-date numbers was a boon, even a necessity, to them.

The cash in my jacket pocket had been collected during the course of my work; minus my forty per cent commission, it would be turned over to Schaub the next time he visited Greece. It was good money, money that I really needed–-but it was black money, clandestine money.

Thinking fast, I said to the detective, “My children will be attending the American Community School in Athens this fall. This is their tuition money.”

The detective eyed me narrowly, suspiciously. But then he shrugged and handed over the wad, saying, “All right. You can keep this, but you will still need to come down to headquarters with us.”
A bunch of Steve’s neighbors had gathered outside; they watched impassively as I was led to the squad car and driven off.

Headquarters was on a side street in mid-town Athens; the big, four-story building had a grim, forbidding air.

The first thing I did when the interrogation got under way was to ask for a translator.

“But you speak Greek,” came the objection.

“True, but my knowledge of the language does not include police business.”

A translator was summoned. He was in plain clothes, probably another detective. He sat down beside me. The interrogator, a gold-braided captain, looked at me coldly.

“How did you meet Mr Korwald?” he asked.

I explained that Steve and his friend Spyros had come to Lindos a year ago, arriving in a rubber boat powered by a powerful outboard engine. The two of them, keen spear-fishermen, had been hopping from island to island, free-diving in the blue Aegean, searching for groupers, octopus and lobsters.
“As I am a spear-fisherman myself,” I told the captain, “I invited them to come out in my boat with me. We fished together for about two weeks and became good friends. When Steve left he invited me to stay with him when I came to Athens. I readily accepted his invitation.”

“Did he ever talk about his work with you?”

“Once in a while.”

“What did he say?”

“He told me that he was in the insurance business.”

“That’s all? No talk of the legal problems he was having in Greece?”

“I’m sorry. That’s all I know. Most of our conversations were about other things.”

“Such as your work as a journalist?”

“That’s correct.”

“What kind of journalism do you do?”

“I write travel articles about Greece--its beautiful islands. Athens and its famous museums and acropolis. That kind of thing.”

“You make a living from this?”

“That money plus what I earn writing books enables us to live in the village of Lindos.”

“But you said your children were going to go to school in Athens.”

“That’s true. They will start school in the fall. My family will be moving here next month.”

“Will you still work as a journalist?”

“Yes, but I’ll be doing a different kind of journalism. I’ll be writing news features for the Financial Post of Canada.”

“How come Canada? You’re an American.”

“Doesn’t matter. They speak English in Canada, you know.”

The captain didn’t crack a smile, just stared intently at me. Then, once again, he asked, “Do you know where Steve Korwald is?”

“I’m sorry. I have no idea. He left without telling me where he was going.”

The captain kept eying me, studying me. The translator did the same. There was a long silence. Then the captain gave a shrug, put down his pen and said, “All right, you can go. Just make sure to call us if you hear anything from Mr Korwald.”

“I’ll do that,” I said. “You have my promise.”

* * *

Over the next few days, the Greek police arrested every member of the IOS sales force in Athens–-everyone but Steve and Spyros. Much later I learned that they had managed to sneak out of Greece aboard a friend’s yacht, disguised as women.

(End of Part One; Part Two will appear in the Sept/Oct issue of