After failing at several different ventures, Jones ran into Bart-mann, a lawyer who had moved to Oklahoma from Des Moines and had gone bankrupt selling oil pipes. Together they started CFS in 1986 and in the next decade made it into a huge financial success. In addition to his regular salary of $1 million-and that was tax free, since every April the company also covered whatever he owed the IRS-Jones took an annual distribution from company profits to the tune of several millions more. And since CFS was a partnership and Jones owned 20 percent of the company, on paper his net worth added up to between $500 million and $1 billion.
In those months before prison, when he wasn't sleeping well and his eyes would blink open at two or three in the morning, Jones would sometimes kill the time until dawn by taking a sorry inventory of the material riches in his life that were now lost. He would think about the $5 million, fourteen-thousand-square-foot dream house that he and his wife had started building south of Tulsa. As conceived, it had granite walls and huge gables, a main staircase inspired by the one in Tara from Gone with the Wind and two artificial ponds connected by a waterfall. To people driving past, it would have looked as if someone had managed to airlift in a full-blown chateau from one of the wine regions of France. It didn't look that way at the moment, to be sure. Right then it sat forlornly in a field of mud, its siding wrapped in tar paper and its windows open to the rain and the snow. Around it was a chain-link fence with a big padlock on the gate and a sign advising people that the U.S. government had a lien on the property.
He also thought about those trips in the company's $25 million, fifteen-passenger Gulfstream G-IV, which he ordered up for spur-of-the-moment vacations for his wife and two grown daughters and their husbands and two or three other couples as well. Fly to Paris and the Caribbean, to Bulls games in Chicago, front-row-center seats, put it all on the company tab as a business expense. Give all that money to the government, it would only waste it. Most frequently, he and Jennifer flew to Las Vegas, where they both gambled heavily. Jones's game of choice was craps, and he could easily drop $30,000 in a weekend. Her husband playing craps is a picture that Jennifer still keeps in her head; she loved the way he would try to make a point, bent out over the table, his fist shaking with the dice and a foot flailing loose in the air. "I find it hard to describe what it was like," Jones said about being so suddenly so rich. "It was the realization when you walked into a store, no matter what kind of store it was, not that you could just buy anything you wanted but that you could buy the whole store! It was a feeling, I don't know if 'power' is the right word. More, I'd say, 'awe.' "
Another thing feeding on his mind those nights was how he might have provided his life story with a more positive ending. Aside from the criminality involved, the downfall of CFS had its roots in the company's very success. In the late nineties it grew so fast-from fewer than two hundred employees in 1995 to twenty times that number just three years later-that it lost the personal touch on the telephone that had produced such a high rate of return. Back in the early days when he and Bartmann were calling debtors, they developed a patter that was "sweet as peaches," Jones recalled. "First you get into their minds, let them know you're there and you're not going away. Then you get into their hearts, create a friend: 'I'm here to help you, not hurt you, harass you. We don't want to see you suffer. I been there myself; I know how it feels.' Then, after you get into their minds and their hearts, you get into their pocketbooks."
The ability CFS developed to wheedle money out of former deadbeats had generated an A rating for the bonds it sold to investors. That meant more money so CFS could buy more loans. But with collections beginning to flag in early 1997, it needed the bond money even more, not only for new loans but also to pay the interest and principal on previous bond issues that could no longer be covered by loan collections. In essence, CFS embarked on a garden-variety Ponzi scheme, borrowing hundreds of millions from new investors to pay off old ones, hoping somehow that collections would pick up in time to cover the difference. As a stopgap measure, CFS started selling off some of its loans to a firm in Chicago to make it appear to investors that its collectors were still reaching their monthly goals. That September, however, the Chicago company announced that it would buy no more loans, and CFS suddenly faced disaster.
What happened next is the thing Jones now regards with deepest regret. Although he founded the company with Bartmann, his main task as vice president had been to devise the computer program that rated the collectability of the loans; once that was done, he largely stayed on the sidelines, came into work when he wanted, practiced his guitar in the office. He recalled: "Here I am, sitting out there, fat and happy. I've got millions in the bank and many more millions in the company, and a gazillion dollars as far as net worth, I mean cash, unencumbered. When I was worrying about the cost of the house we were planning, the accountants told me, 'You fool, you're worth so much money you don't have to worry!'
"So in late September of ninety-seven, somehow I became aware the Chicago company is not going to buy any loans this month. Bill had this amazing ability to convince you to do something before you-I have a hard time describing this-but he could in some manner plant a thought in your mind to make it your idea before he proposed the idea or even brought it up. He's a great thinker, and somehow I became aware we are not going to reach our goals in September, and if we don't, I thought at the time, in all probability it's going to destroy our bond rating. So I said, 'Hell, I got the money in the bank, I'll buy 'em.' And Bill says, 'You can't do that, you're an insider.' And I said, 'What if I find somebody to do it for me?' And he said, 'Maybe.' " (Bartmann's attorney did not return calls.)
That very day, Jones recalls, he phoned a lawyer friend down in Shawnee and got him to set up a straw corporation called Dimat, into which Jones fed money from his share of CFS profits so that the company could begin purchasing loans from CFS as a replacement for the firm in Chicago. The scheme provided camouflage for a year, to the tune of $63 million in bogus loan purchases. Then in October 1998, an anonymous letter arrived at Standard and Poor's, one of the rating firms that had been giving CFS bonds their A rating. The letter revealed that Dimat was really a sham corporation and that all its "purchases" of CFS loans were a ruse, paid for by money from CFS itself, to give investors a false picture of the company's financial health. Virtually instantly, the market for CFS bonds dried up; with no cash coming in, the company defaulted on payments to previous bondholders. Bankruptcy ensued, and by the following July, CFS was no more.
Needless to say, this was not the way Jones thought things would turn out. In his mind, the Dimat scheme was only a temporary arrangement, to give CFS managers time to get collections up to their previously high level. "The choice was certainly mine, whether I fully realized it or not at the time," Jones told me. "That first time, when it started, the company wasn't in that bad trouble. But as it got further, I should have recognized that if we'd quit after the first two times, if we did that, there would still have been no harm, no foul. We could have simply said, 'Guys, we've missed the projections here.' We could have said, 'We're going home, and you've got to figure out what to do.' I wouldn't have liked that, it wouldn't have been great for investors, but certainly there would have been no criminal activity."