This first article is by John Gorenfeld, who wrote that recent book about Sun Myung Moon.
(Warning! Somewhat disturbing content ahead.)
http://web.archive.org/web/200804180733 ... -print.php
A high-flying Web start-up, DEN imploded among allegations of drug use, guns, and pedophilia
By John Gorenfeld and Patrick Runkle
Even in an era when catching pedophiles makes for must-see TV, the picture in the UK Sun was remarkable. Marc Collins-Rector, nattily dressed in a tan blazer and blue shirt, sporting a pair of Wayfarers and carrying a silver-topped cane, stands outside a PC World in London, accompanied by a teenage boy lugging a newly purchased set of high-end computer speakers. The headline: "Tycoon Paedo on Prowl in UK."
Historians of the Internet bubble might remember Collins-Rector as a cofounder of the Digital Entertainment Network, an online video empire that was one of the most talked-about new media launches of its day, before its spectacular flameout. Accused of molesting numerous teenage boys who worked for him, the 48-year-old entrepreneur went on the lam to Europe. Apprehended 21 months later, he was extradited to the United States, where, after what seems a rather lackluster prosecution, he pled guilty to eight counts of luring teens across state lines for sex, and paid a small fine. Two years later, here he was, as the Sun put it, "swanning around Britain in a chauffeur-driven limo and surrounding himself with young boys."
Such brazen behavior wouldn't surprise anyone who knew Collins-Rector back when DEN was riding high. In those heady days before the Internet bust, a Who's Who of gay Hollywood flocked to notorious all-night bashes at the "M&C estate," so named for Marc and his twentysomething cohort Chad Shackley. The pair, who met on an online bulletin board (remember those?) when Shackley was just 15, collaborated on a number of tech start-ups, including an early Internet service provider, Concentric Network Services. Flush with cash from their successful ventures, Collins-Rector (who had changed his name from the more pedestrian Rector) and his young colleague landed in Encino, California, where they took a special liking to a $4.2 million Spanish colonial McMansion that had previously belonged to Death Row Records rap impresario Suge Knight. Streams and waterfalls traced the carefully manicured 1.5-acre grounds, which housed a tennis court, an enormous gazebo, a swimming pool, aquariums, a home theater, and a hot tub built for 12. Among their new acquaintances in Los Angeles were such industry heavies as David Geffen, uber-manager Sandy Gallin, then–NBC Entertainment president Garth Ancier, and Usual Suspects director Bryan Singer. It's also where they hatched an audacious plan for a Web-based television venture that was to consign the networks to the dustbin of history. They called it DEN, and staked its business model on "narrowcasting," or marketing to thin demographic segments. An early attempt to capture the online video zeitgeist that eventually blossomed with YouTube, den.net was instead rooted in original programming. The plan attracted major investments from key players in Hollywood, the tech industry, and Wall Street, ranging from Geffen and Singer to Intel, NBC, and Microsoft. Representative Michael Huffington wrote a check for $5 million after a lavish dinner party at M&C, boasting to a friend that he expected to reap at least a tenfold gain from his investment.
Another regular at the mansion was DEN executive VP Brock Pierce. He was aggressive and self-assured, with blond hair and an insouciant pout. He was also still a teenager—17 years old and coming off a successful career as a child actor, with The Mighty Ducks and First Kid among his credits. According to a DEN board member, Pierce was hired as "the guy who could tell us what Gen Y-ers were likely to think." This talent came in handy not only in targeting the youth demographic, but also in bringing a supply of beautiful young men to the estate, lured with vague promises of fame as the Internet's first TV stars.
Eventually, a number of these acolytes would file lawsuits alleging they were raped and/or sexually abused at M&C by the three cofounders. Their charges are remarkably consistent—all claim they were bullied and drugged to coerce sexual compliance, and in some cases, threatened with loaded guns. When the plaintiffs filed civil suits against Collins-Rector, Shackley, and Pierce, the three suddenly disappeared with what remained of their fortune—turning up two years later living in a villa in Spain. They were arrested by local authorities, who uncovered "an enormous collection of child porn," according to Spanish police reports. In their absence, the plaintiffs were awarded default judgments in the amount of $4.5 million, but have collected only a small fraction of that. And while Collins-Rector is living it up in London—taking his young friends to lunch at Gordon Ramsay's restaurant in Claridge's hotel, according to the Sun—Pierce has recently been lauded yet again as a New Economy genius for his role in a fast-growing Internet venture that's drawn praise from the likes of Fortune and CNN.
For a company that brought in nearly $100 million from world-class investors and made the lofty promise that "global entertainment will be delivered over the Internet; [DEN] will create the last network," its product was stunningly bad—even by dot-bomb standards. The business plan was lacking in many respects. A major selling point that Collins-Rector touted to investors was a feature that would allow viewers to click on, say, a shirt or lamp in one of the shows and immediately buy it online. Unfortunately, the click-to-purchase technology never materialized, and the venture was vexed by a more troubling technological issue: Broadband was still a rarity in the late '90s, so most of the intended audience had to access the programming via 56K modems. "We all bought into [Marc's] vision of the technology," says DEN's chief marketing officer, Edward Winter, now chairman of the youth-marketing firm Tracy Locke, "but soon we were being told by Internet experts that 'you can't stream video right now.' It became pretty clear that it wasn't going to work."
Still, DEN pressed on, shrinking the format and utilizing shots with as little movement as possible. The company built a space-age headquarters in Santa Monica, furnished with $1,800 chairs and a state-of-the-art newsroom that was put to little use. Instead, DEN's founders devoted most of their attention to the network's flagship show, Chad's World, which targeted gay and questioning teen boys. Filmed at the M&C estate, Chad's World was the founders' most personal creative effort. Co-written by Collins-Rector, produced by Pierce, and loosely based on Shackley's life, it featured one of the boys who would later accuse the DEN founders of molestation.
Chad's World starred a 14-year-old actor named Brian Stark as Chad, and Seann William Scott—who shortly thereafter won a starring role in American Pie—as Jim, a California entrepreneur based on Collins-Rector. While the film's production quality was more in line with down-market porn than network programming, the producers doled out a mind-boggling $12 million in salaries for the series. (Contacted by Radar, Stark declined to comment on the show. Scott's agent thanked Radar for "thinking of Seann" but similarly declined to comment.)
The pilot episode revolves around two young men coming to terms with their sexuality. Chad convinces his close friend Paul to come out of the closet to his cartoonishly repressive parents. Upon learning that his son is gay, Paul's father calls him an "abomination against God," provoking the spurned boy to blow his own brains out. "It's for the best," Dad muses. Brushing off the brains of his friend, a despondent Chad runs outside and makes a "Why, God?" gesture to the skies as grunge rock burns in the background.
Before long, he meets his high-flying benefactor, Jim, who lives with Chad's older brother at a suspiciously familiar mansion. The duo, who are shuttled around in dark sedans and surrounded by phalanxes of black bodyguards, invite young Chad to live with them, generously dispatching a few of their bodyguards to stomp Paul's homophobe dad on his lawn.
Cheerfully, Chad moves to Encino to play-wrestle with his new roomies and enjoy a lavish new lifestyle. "Oh, yeah!" he exults after being presented with a BMW and black driver of his own. "I think I'll be able to hang here!"
When Chad's World debuted on den.net in June 1998, many critics couldn't even download it—which was probably a blessing for all involved. "Chad's World was the first signal that maybe things weren't right [with the company]," says Winter. "It was definitely, um, ahead of its time."
It felt like a "gay pedophile version of Silver Spoons," adds another industry observer who saw the pilot and five unaired episodes. "I first thought it was some sick fantasy of theirs," he adds. "When I found out about the molestation charges, I realized that it was more a case of art imitating life."
Other DEN shows also targeted thin slices of the adolescent male demo, including young Latinos (Tales From the Eastside, in which, according to one former employee, every line of dialogue began, "Yo! Ese!"), Asians (The Chang Gang), Christians (Redemption High), frat boys (Frat Ratz), and punks (Fear of a Punk Nation). Though the company promised to reach 1.5 million viewers, den.net never surpassed 5,000 hits per day.
A $75 million IPO was planned for October 1999, but days before it was filed, a young man from New Jersey, identified in court filings as Jake W., served papers for a lawsuit claiming he'd been molested by Collins-Rector for three years, beginning in 1993 when he was just 13. Collins-Rector quickly paid a settlement, and his attorney fired back in the press, calling the suit "classic IPO blackmail" and describing the settlement as "a token payment to save the company."
In the same way he'd met Chad, Collins-Rector had connected with Jake via an Internet bulletin board. The executive offered the boy a job at his pre-DEN venture, Concentric, and Jake began working from home for $10 an hour. Soon, though, Collins-Rector decided he needed Jake at the Michigan office and flew him out from New Jersey, lodging him in a spare bedroom. During the visit, according to the lawsuit, Marc repeatedly asked, "Do you trust me?" with his hand roaming across the boy's body. Then he performed fellatio on him.
With the FBI investigating Jake's allegations and investors panicking, all three founders immediately quit their executive posts (retaining substantial stock positions), leaving DEN's new chairman, Howard Ritts, in charge of the company.
Within months, all three of the company's founders had been hit with a flurry of civil lawsuits. Boys who had been paid for vague jobs with the company under the condition that they agree to attend parties at the M&C estate began telling stories of sexual abuse at the hands of Collins-Rector, Shackley, and Pierce, as well as other highly placed Hollywood figures.
One of the alleged victims was identified as Mike E. The slim, dark-haired 14-year-old, who attended a small private high school in the Valley, befriended Chad's brother Scott, who led him to DEN. Mike had an interest in acting, so when Collins-Rector outlined the possibilities for stardom offered by the site, the boy began spending time at the mansion, where there was one key rule. He recalls: "If you were going to sleep over, you had to get into either the pool or the hot tub—and you had to be naked to do so." In an exclusive interview, Mike E. confirms having been forced to engage in anal and oral intercourse with Collins-Rector, Shackley, and Pierce while under the influence of drugs that he claims were fed to him without his knowledge. At the same time, he says, Collins-Rector and Shackley were pushing him to become a legally emancipated minor. Although Ronald Palmieri, Collins-Rector's lawyer at the time, dismisses the allegations, saying, "There was never any such discussion that I know of," Radar has obtained correspondence sent by Shackley to Palmieri's law office requesting an update on the status of Mike E.'s emancipation filing.
Meanwhile, in addition to paying the boy $1,000 a week, Collins-Rector dangled a starring role in a DEN series called The Royal Standard, which was being developed by Randal Kleiser, the director of Grease and The Blue Lagoon.
Another alleged victim, Daniel, tells a similar story. After being subjected to sexual abuse at M&C, he wrote a suicide note: "I can't stop crying! Please God help me. I can't go on. I let them use me as a sex tool. I let those assholes do all those terrible things to me. Goodbye." His brother found the note and alerted their parents before Daniel made any attempt on his life.
Another young man who frequented the estate, Alex B., was not a minor at the time, but also eventually became a plaintiff against the men. Alex claims he was threatened with physical harm, often after being given drugs. At one point, Alex secretly shot a video inside the M&C estate to document what was going on. In a jittery scene, he removes a canvas bag from a closet and shows off a massive stash of drugs in amber vials—Percocet, Vicodin, Xanax, Valium, marijuana, and ecstasy among them.
Another former DEN employee tells of receiving and rejecting numerous sexual advances at the M&C mansion—until one evening when he was surreptitiously drugged and woke up nude in Collins-Rector's bed, with Collins-Rector asleep beside him.
In addition to the money and promises of stardom, Collins-Rector allegedly used physical threats to keep the boys in line. One tactic, according to several victims, was to brandish a gun. "Do you know what I can do with this?" he would say, leveling the barrel at them, "and get away with it?" He also threatened the lives of their families. On one occasion, Alex recalls, Collins-Rector asked a bodyguard to stand in the room wearing earmuffs. The DEN chairman told Alex the guard would choke him if he didn't consent to sex. (Radar tracked down the guard in question, who had gone on to do security work for a big Hollywood talent agency. He confirmed the basics of the boy's account and seemed disgusted by the memory. "Marc told me to put on the earmuffs and stand in the room facing him and Alex," he says. "I was there for about two hours, but that is all I want to say about what happened.")
As the lawsuits against the company mounted in early 2000, DEN—in which Pierce held nearly one million shares and Collins-Rector still owned a majority stake—began to hemorrhage money. The planned IPO, which was postponed after the first abuse allegations surfaced, was permanently shelved. A crumbling Nasdaq didn't help the situation. By May 2000, the start-up was bankrupt. Before long, its headquarters were gutted, the expensive computer equipment and office chairs sold off for a fraction of their original cost. Around Hollywood, rumors flew that Collins-Rector, Shackley, and Pierce were about to be arrested on embezzlement and sexual offenses. Before any charges were filed, though, the three men disappeared.
They didn't turn up again until May 2002, when a tip to Interpol led authorities to raid their luxury villa in Marbella, on the Spanish Riviera—an area British tabloids have dubbed the Costa del Crime due to its high population of English-speaking fugitives. Among the items recovered from the residence were guns, machetes, a trove of jewels, and child pornography. Pierce and Shackley were held for about a month by Spanish police and then released.
The prosecution of Collins-Rector also proved difficult. He remained in a Spanish jail for almost two years, fighting extradition, before finally being brought to the United States, where he pled guilty to eight charges of child enticement, a comparably minor offense. He was soon out of prison—receiving credit for the time he'd served in Spain. Since most of his alleged crimes took place at the mansion in Encino, it was up to L.A. County prosecutors to make any further charges stick, but the DA never took steps to do so. (The L.A. County district attorney's office refused to comment about the status of any DEN investigation.) The victims sought justice in the civil courts, however, winning a total of $4.5 million in summary judgments. Except for a small side agreement with Pierce, the award has yet to be paid, lawyers say.
And like O.J. Simpson, who wound up in a similar legal situation—unpunished for criminal wrongdoing but subject to a large civil judgment—Collins-Rector seems to have little incentive to earn enough money to start paying the plaintiffs. At least, not in his own name. Evidence uncovered by Radar suggests the dot-com pedophile may once again have struck it rich, this time concealing his wealth through a new Internet venture controlled by Brock Pierce. As founder of IGE (Internet Gaming Entertainment), Pierce has made a killing selling broadswords, battle axes, and other assets to enthusiasts of multiplayer online games like EverQuest and World of Warcraft. Headquartered in Hong Kong, the company hires gamers—thought to be Chinese nationals working in virtual sweatshops—to rack up items inside the games and sell them for real-world dollars to participants who have more money than skill. While not illegal, such deals do run afoul of game rules and are detested by many players.
Sales of digital assets could soon be a $7 billion-a-year industry, according to IGE. Pierce, it's safe to assume, has made a fortune. Upon his return from Spain, he made out-of-court settlements for his role in the M&C debauchery.
There is good reason to believe, however, that Collins-Rector also has a stake in the company. Daniel Cheren, a lawyer who represented three of the boys in their civil suits, openly voices his suspicions about Collins-Rector's involvement, and suggests that money from the new venture should go to the victims. Among other indications, when IGE first surfaced, it listed an address in Marbella, Spain, the town where the trio hid out. Paperwork for the company's incorporation in the United States was filed by Matt Rector, Collins-Rector's brother, along with Collins-Rector's former business partner, attorney Randy Maslow—then IGE's executive vice president.
The company is under no legal obligation to publicly disclose its finances or investors, and the bulk of its operations remain in Hong Kong. Without a court order obliging IGE to open its books, it's impossible to know whether Collins-Rector is in on the action. The company didn't return calls seeking comment.
Meanwhile, Collins-Rector appears to be up to his old tricks in London. In 2006, a U.S. District Court judge granted him "emergency" permission to leave the country to receive treatment for a brain tumor. Every week, his physician must assure a U.S. probation officer that the medical leave is vital. A spokesperson for the U.S. Attorney's office in Newark, New Jersey, which prosecuted the case against him, acknowledged being aware of Collins-Rector's residence in London, but said his parole was being handled by court officials in Florida and refused further comment.
After Collins-Rector made his cameo in the Sun, it appeared that officials were losing patience with the arrangement and making an effort to bring him back to the United States. "It's a slap in the face to the victims," says attorney Brian Brandt, who represented Daniel.
In a 2007 motion requesting termination of Collins-Rector's supervision requirement, his attorney argued that "life-changing medical events he has experienced have profoundly affected him and augur well for the success of his rehabilitation." In its response to the motion, the U.S. Attorney's office revealed that Collins-Rector had come up with what it called another "ploy to circumvent British immigration law," by claiming he "fell in love" and will form a civil union with a British citizen—which would allow him permanent residence status. As it happens, his love interest—who also works as his personal assistant—is a young man who just turned 18.
An in-depth look at Brock Pierce's online gaming gold-farming empire, IGE:
http://www.wired.com/gaming/virtualworl ... ntPage=all
Pierce had certainly thought about turning pro. Before DEN took off, in fact, he'd started a business in virtual trading cards in the online game Sanctum and had pulled down $30K a year. And it wasn't a legal issue: "There clearly was a market for selling virtual items for real money," Pierce says. "It was less clear that it was against the rules, and it was certainly not against the law anywhere." But what held Pierce back was a problem of scale: He still was looking for a way back to the multimillion-dollar business world he'd run away from, and somehow the $13-a-month fantasy world he'd run away to didn't seem like the place he'd find it. The kind of business it would take to fit Pierce's ambition—a truly corporate retailer of the virtual, complete with org chart, business plan, and potential IPO—was without precedent. It was a thing so improbable and awesome, come to think of it, that actually making it happen might redeem not just the years he'd lost to DEN but the additional year and a half he had now spent doing little else but play a videogame.
And once he finally did come to think of it that way, Pierce was playing a new game: making his redemption a reality. In May 2001, he founded IGE with what was left of his own savings, setting up corporate headquarters in a 700-square-foot office in downtown Marbella and hiring some locals to do the farming—to rack up EverQuest items he could sell for cash. The company's ultimate goal, Pierce says, was to shift to the far more efficient model of acquiring its supply entirely from freelance farmers—and within a few months, IGE would be doing just that. But first Pierce invited Debonneville down to Spain for a look around. There, as Debonneville would relate in a legal complaint several years later, Pierce introduced him to Collins-Rector and Shackley, explained that the three of them had made millions, and invited Debonneville to join him now in making millions more. "I told Alan this could be a $100 million business," Pierce says. "I had that vision."
Debonneville didn't hesitate. He moved to Spain and joined IGE with a 2 percent ownership stake and full responsibility for the management of sales, supply, and technology, thus freeing Pierce to concentrate on long-term strategy. And if, in the months that followed, Pierce was slow to give Debonneville a more detailed picture of his business background, well, who could blame him?
In any case, Debonneville got a pretty good understanding in June 2002, an eventful month that began with Pierce's mysterious failure to show up for work one day. Debonneville was told at first by Pierce's Spanish lawyers that his partner had gone on vacation to Thailand. In fact, Pierce was in government custody. According to Debonneville's initial complaint, which was later sealed by the court in the course of a business-related suit, Pierce later told him that a Spanish SWAT team had moved in on the house of the former DEN execs with guns and helicopters. Pierce and Shackley spent a month in detention before being released, but Collins-Rector remained in the Spanish prison system for another year and a half, fighting extradition to the US on criminal charges of transporting a minor across state lines with intent to engage in sexual activity. Debonneville claims Pierce spent much of that time trying to help Collins-Rector—at one point even flying to Africa to try to buy his former boss a Liberian diplomatic title and whatever immunity might go with it. At the same time, Pierce was busy sorting out his own legal affairs, hiring lawyers to help get the civil claims that had defaulted against him when he'd left the US dismissed.
Through it all, though, the sales of virtual platinum kept churning.
I first met him and Debonneville that November at the State of Play conference on virtual worlds in New York City, where academic games researchers and MMO designers all stared slack-jawed at these smiling emissaries from what many still thought of as a semi-criminal underworld. The boys wore nice suits, handed out business cards, and clearly meant business. IGE had set up US headquarters in Boca Raton, Florida, but the real base of operations—mainly engaged in around-the-clock delivery of EverQuest items—was now in Hong Kong and soon would occupy two floors in the same building as AOL Time Warner Asia.
I was in the business myself at the time, selling items in the classic MMO Ultima Online. After the conference, I blogged "Brock Pierce looks like a Norman Rockwell 13-year-old, talks like a coked-up 35-year-old, and happens to have turned 23 last Friday. He is either my new best friend or my new worst nightmare." What alarmed me was the news that IGE was planning to move beyond EverQuest to other games—including Ultima. "I haven't even had a chance to get my little five-and-dime up and running," I lamented, "and already the Wal-Mart is coming to town."
But I was kidding myself if I thought I was even on IGE's radar. All its efforts were aimed at crushing Yantis. "It was a market-share game," Pierce says. If Yantis lowered his prices, IGE did, too. If Yantis sought to exploit his more-established reputation, IGE sought to bury him in Google AdWords. ("We were probably one of Google's largest advertisers," Pierce says, adding that they spent about $1 million a month on text ads touting their affordable EverQuest platinum.)
For IGE, this was the beginning of an age of gold. Literally: World of Warcraft was released in November 2004, and over the next year the platinum of EverQuest's Norrath was replaced by the gold of WoW's Azeroth as the most heavily traded virtual currency in the world. WoW's growth rate was phenomenal—the game now has 11 million subscribers, 20 times as much as EverQuest ever had—and the RMT markets grew with it. But most important, WoW did something that made IGE's decision to move to Hong Kong the year before look practically clairvoyant. It ushered in the era of the industrial Chinese gold farm.
According to industry lore, China's first gold farms sprang up as early as 2002 just across the border from Korea. MMOs were huge in that country, and it was supposedly Korean player-entrepreneurs who hit upon the idea of hiring low-wage Chinese workers to farm the currency and equipment that other users craved.
But in the end it was the huge new market of Western WoW players that gave thousands of small-time Chinese capitalists a reason to set up gold farms of their own. And when they did, it was IGE that became the Wal-Mart moving all that product west to gold-starved players. The Hong Kong base made IGE uniquely suited for the job, and soon the company had a new Shanghai supply center and a Web site just for Chinese suppliers; they could see what the offering price for gold was on a particular server. "We had over 100 people working in Shanghai," Debonneville says, and the investment was worth every cent, securing IGE a truly reliable supply chain—and the sweetened profits that went with it.
The source of those profits, ultimately, was operations like the one owned and operated by 26-year-old Liu Haibin in Jinhua, China, which I visited a few years ago. With about 30 workers on staff, Liu was able to keep a gold-farming setup running around the clock. While the night shift slept upstairs on plywood bunks, day-shift workers sat in the hot, dimly lit workshop, each tending three or four computers. They were "playing" World of Warcraft, farming gold at an impressive clip by hunting and looting monsters, their productivity greatly abetted by automated bots that allowed them to handle multiple characters with little effort. They worked 84-hour weeks, got a couple of days off per month, and earned about $4 a day, which even for China was not a stellar wage.
Liu's income was better but not always by much. "Sometimes in a month you can lose all the profit you made in a year," he said, admitting there were days he regretted getting into the business in the first place. Why bother? "We also love this game," Liu told me.
Most American WoW players at the time knew little about how the farmers lived and worked. What they did know was that there seemed to be more and more of them in the game (broken English and repetitive playing patterns gave them away) and that WoW's publisher, Blizzard Entertainment, did not look favorably on their presence. A Blizzard policy statement reads: "They spam advertisements, use bots that make it hard for players to find the resources they need, and raise the cost of items through inflation." As the gold-farmer population grew, opponents flooded message boards with anti-Chinese invective and increasingly took note of the role a company called IGE seemed to play in the phenomenon.
The company was drawing more attention elsewhere, too. When Pierce and Debonneville returned to New York for the second State of Play conference, they came with an entourage. There was Yantis, now part of the team and looking not especially comfortable in the position. And there was a fiftysomething named Steve Salyer, a former Electronic Arts executive who had just been hired as IGE's president—and who made the eye-popping announcement there that the RMT business was now an $880 million industry.
"There's no question in my mind that in the future millions of people will make their living in cyberspace," Salyer told me soon thereafter, doing his best to sell the significance of the virtual gold trade in general—and IGE in particular. His job, after all, was to get the company taken seriously. The IGE founders had built a successful business, and now they wanted to make it a legitimate one: IGE wanted deals with game publishers that would give it license to traffic in virtual items without violating the games' terms of service. That sort of deal wasn't likely to get cut with a couple of college-age unknowns. As Debonneville put it, "Brock and I were not adult faces."
In the months ahead, IGE hired more adults, a slew of VPs with decades of industry experience among them. The company also brought on a former Goldman Sachs investment banker named Stephen Bannon, whose mission was to land venture capital.
By spring 2005, Yantis was telling IGE affiliates that the company would be announcing limited licensing agreements permitting it to operate aboveboard in at least five North American MMOs. Yantis himself, however, wouldn't be sticking around to see it happen. Pierce and Yantis had arrived at, as Pierce puts it, a "difference of opinion," and in June, after months of negotiation, the terms of Yantis' exit were finalized: For 22 monthly payments of $1 million each, the company would get Yantis' stake back, along with his agreement not to set up a competing business for at least three years.
Goldman Sachs started making visits, inspecting the Asian operations and talking with Bannon and others about terms. Finally, on February 7, 2006, the deal was inked: Goldman Sachs, together with a consortium of private funds, made a reported $60 million investment in the company. Part of the money was used to buy Pierce, Salyer, and IGE's general counsel, Randy Maslow, out of some of their stock in the company. Pierce walked away with $20 million and still retained the controlling share of a company that was doing more than a quarter of a billion dollars in sales a year. The only top IGE officer who failed to profit from the deal was Debonneville, who, for reasons that remain disputed, was excluded from selling any part of the 17 percent stake he'd built up. Two and a half months later, he left the company.
"A Drive Through Laurel Canyon With Brock Pierce"
Pierce says it was his bad luck to be lunching with his former business partners at their Spanish home when local cops swept in to arrest Collins-Rector on U.S. criminal charges, detaining everyone present, including the housekeeper, for reasons never fully explained.
I suppose I could have dragged that all out of him if I'd pushed hard enough that day in L.A. But somehow, the sight of Pierce bent over puking in the bright Hollywood sun convinced me this was not the time. We drove on to Greenblatt's, a deli on Sunset that Pierce told me was a favorite hangout for celebrities when they didn't want "to be seen." He recommended the matzoh ball soup, which indeed was excellent, though he barely touched his. Instead he talked and talked about the history of IGE, almost every aspect of it -- except its relationship to DEN. "Anyone who knows me knows I'm an open book," he said.
On the drive back up to his house in the Laurel Canyon hills, he kept talking, telling me about his current list of projects, entrepreneurial and otherwise. He had just sold a casino in the Phillippines. There was an oil deal in Kazakhstan. He was doing philanthropic work with the Clinton Global Initiative. He was working with the family of the president of El Salvador to make some worthy documentary or another. His list was delivered with an almost manic urgency. If I were to presume to have the slightest idea what really goes on inside Brock Pierce's head, I might suggest he was trying to establish by sheer force of talk the irrelevance of anything in his past to all the things he's doing today.
As I left him to get in my own car, he assured me he was eager to help me with the story. "I just ask that you steer clear of the more personal attacks," he told me earnestly, and it was the only moment in which DEN was even alluded to. Since then, I've wondered often: If it mattered to him that much how the story was told, why did he let unfriendly rumors and thinly reported news items define the story for so many years, instead of telling his own more coherent version long ago? But I said nothing, shook his hand, and thanked him for his time.