River of Schemes: Fredrick Scott claimed he could transform the East St. Louis waterfront. Now he's facing 20 years for fraud.

River of Schemes: Fredrick Scott claimed he could transform the East St. Louis waterfront. Now he's facing 20 years for fraud.
Tim Lane

In the summer of 2010, Fredrick Douglas Scott stood on the greens at Glen Echo, a private country club in north St. Louis County, wearing an expensive golf shirt and sporting a set of $1,200 Callaway Diablo clubs. Despite being just 26 years old, Scott fashioned himself a member of the financial elite — the kind of guy who takes a break from killing it in the stock market to kill it on the fairways. Then he swung his club.

"Where did this guy come from? Scott was supposed to be a Wall Street. But they don't talk about East St. Louis on Wall Street."

"I'm just starting to learn," Scott explained as his drive trickled down the fairway. He tried again, this time trying to put into action what the teaching pro at the club had taught him. Another swing, only slightly better. Scott's golf game needed time and practice.

A few minutes later, Scott put the clubs back into the bag and called it a day. The man who Ebony magazine once praised as Wall Street's youngest and most successful African American hedge-fund manager — with more than $3 billion in assets — walked to his car: a nondescript rented Toyota.

East St. Louis mayor Alvin Parks admits taking a chance on Scott but says it cost the city nothing.
Bill Greenblatt/UPI
East St. Louis mayor Alvin Parks admits taking a chance on Scott but says it cost the city nothing.
Evening Whirl publisher Anthony Sanders sensed that his golfing partner wasn't who he said he was.
Tom Carlson
Evening Whirl publisher Anthony Sanders sensed that his golfing partner wasn't who he said he was.

Back at his sparsely furnished apartment in the Central West End, Scott fried himself a hamburger that he placed between two pieces of Wonder Bread; they quickly turned soggy with grease and ketchup. Scott was living frugally, but it wasn't because he was a wealthy miser. Despite his carefully crafted persona, he was broke. In fact, he never had the riches he said he did. And whatever money he did have, he already spent in St. Louis trying to convey an image of wealth and success.

Needing some fast cash, Scott tried to make a mark out of Anthony Sanders, publisher of the St. Louis Evening Whirl and Scott's sometimes golfing partner whom he had met at a networking event.

Sanders doesn't remember the details of Scott's proposition. What he does remember is that Scott wanted $9,000, immediately. In return, he would repay Sanders a few days later with $11,000. It was a great offer, Scott assured Sanders. All he needed was that nine grand to make it work.

"I didn't care what the deal was because there was no way I was gonna give him $9,000," Sanders says. "But I could tell he was hurting for money. So I told him I'd give him $1,000. My wife wasn't happy, but he probably spent $1,000 or close to it on me with meals and golf, so I helped him out."

Sanders remembers Scott being profusely appreciative when he came to pick up the check. Scott promised to pay it back soon. It was the last time Sanders would ever see him in person. By June of last year Sanders had largely forgotten about his old golfing buddy and the outstanding loan when photos of Scott showed up in articles about a bogus hedge-fund manager accused of preying on African American investors. The tabloids called Scott the "black Bernie Madoff," and outlets as diverse as CNBC and the New York Daily News covered the scandal.

According to federal prosecutors in New York, Scott conspired to defraud investors out of hundreds of thousands of dollars by using essentially the same trick he played on Sanders: Give him some money, and he'd get you a lot more in return just days later. Instead, the money went straight into Scott's pocket. When the feds finally caught up with him last summer, Scott had fleeced multiple victims out of nearly $1 million. Yet upon his arrest, Scott's bank account was overdrawn by $91. He had already spent — or hid — every penny.

Today Scott sits in a New York jail, where he's awaiting sentencing on guilty pleas of forgery and wire fraud. He faces up to twenty years in federal prison.

"I always knew he wasn't who he said he was. What kind of millionaire big shot drives around in a rented Toyota and cooks hamburgers at home?" Sanders asks. "Nothing against Toyotas and hamburgers, but I know some big-money guys, and that's not what big-money guys do."

But who exactly is Fredrick Douglas Scott, and why — of all places — did he arrive in St. Louis from California in 2009? Those questions aren't easy to answer. For starters, Scott's biography is so riddled with lies it's unclear what — if any — part of his story is true. Also there's this: Those who knew him best during those days in St. Louis aren't talking.

This much, though, is certain: For a time in 2009, officials in East St. Louis, Illinois, saw the smooth-talking Scott as a potential savior for their impoverished city.


East St. Louis mayor Alvin Parks remembers the first time he met Scott during a one-on-one meeting at city hall.

"I didn't know anything about him, other than he seemed to be a relatively nice guy, a relatively intelligent young man, with a lot of passion, a lot of focus, also some flair," says Parks of the young visitor with a slim build and high-pitched voice who often donned fancy suits and bow ties. "He had a certain level of charisma and a compelling story once you got into it. But there's only so much you can tell about a guy in 25 minutes."

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4 comments
Devon L Johnson
Devon L Johnson

Can we just leave it at pretty much every East St. Louis resident is pretty much a hoodrat, crook, or general ne'er do well

Rick Kohn
Rick Kohn

Doubtfull his golf game will improve in the slammer.

MJChappell
MJChappell

So...I tell you,  deal with me and I will help you get a 5 million dollar loan from the bank, but it will cost you 250K. The bank deals with me and they approve your loan, but I tell you no, that they didn't.  But if you really want the loan, for an extra 125K, I will make sure the bank approves you. You know what makes this all possible? People who have money, may have or not have done the SAME thing to other people. Paying someone 250K to talk with a bank about getting a loan tells me one thing. You had 250K to just throw away. But I guess the money means nothing because imagine what that guy would have made and done with the 5 million dollar loan afterwards.

NormanBates
NormanBates

He will get a suspended sentence. Get some "community service" time.

The he will find Jesus and become a Reverend.

He is , and will always be, in the League Of Poverty Pimps.

 
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