By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
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He typically went to Brazil between two and 12 times a year on business, buying his gems from a handful of trusted brokers.
Kalisch was successful enough that he was able to buy a studio apartment with a small backyard on the ground floor of the co-op on East 12th Street, and then, gradually, purchase the other two apartments on the floor and combine them into a nice pad for himself, his wife, and their daughter, who attended a private elementary school.
And so it went for many years. A man who lived by his wits, and his ability to buy and sell, made a steady income for himself.
"Marco would go down to Brazil, pick up stones, work on 47th Street a lot, trade on 47th Street, and then come home, and we would have a normal evening," Mayra later testified. "And that was our life."
But Kalisch yearned for something more ambitious, something involving the Cinta Larga reservation. He just needed to figure out how to get around the Brazilian law that banned mining of any kind there.
Kalisch formed a corporation in Brazil with two other partners: Marco Suarez, a Brazilian police official, and Marcos Glikas. They called the company "M-3 Imports," because of the similarity in their first names.
A few years earlier, Glikas had been indicted and convicted of money laundering in New Jersey. He'd been delivering illegal drug proceeds to the former president of a Brazilian company with a U.S. subsidiary, and $8 million in cash was seized when the authorities moved in. He served almost three years in federal prison in Coleman, Florida, then was released in 2002 and returned to Brazil.
Glikas would be responsible for converting U.S. funds into Brazilian money. Suarez was in charge of moving the merchandise and paying the bribes necessary to get past roadblocks and checkpoints. In a place like Brazil, where official corruption is so widespread, things would never get off the ground without someone like Suarez handing out bribes liberally.
While Kalisch was excited about the new venture, his wife, Mayra, was nervous. Despite working on the margins, Kalisch had long been a diamond merchant, and now he was wading into the messy world of Brazilian diamond mining. And the couple had a daughter to consider. "He started to speak to this gentleman, Marcos Glikas, from the house, which was unusual," she testified. "So I'm not happy with this. . . . He is changing. I said to him, don't get involved, don't do this. What good can come from you doing business with Marcos Glikas and doing this thing that you're telling me is not clear with the Brazilian government?"
The marriage became strained, and the couple started joint therapy. "I would really let loose in couples' therapy," Mayra testified. "I would tell him, you're going to lose your business. There's no way that this could end in anything good."
In a business plan later produced for his investors, Kalisch claimed he started working with Cinta Larga leaders, along with "state and local authorities," in March 2003.
Kalisch could say that because Glikas had met with the governor of the state of Rondônia, Ivo Cassol, and a top lieutenant who was in charge of the state's mining company. Glikas later told investigators that Cassol, in essence, was well aware of the smuggling scheme.
And Kalisch may have imagined that he was actually helping the Cinta Larga take control of their diamond reserves. At one point, he told his investors that he was "helping local indigenous people."
With government officials taken care of, Kalisch and his partners needed financing. Kalisch borrowed $400,000 from a credit line with Merrill Lynch and wired it to Brazil, where it was used mainly to purchase mining equipment and machinery for Cinta Larga use.
In the middle of 2003, the scheme began to pay off. Kalisch started buying and importing rough diamonds from the Cinta Larga lands.
Kalisch knew that he was on to a major new market, and he needed real money behind the venture. For financing ideas, he turned to his close friend, Victor Janovich, a man in the coffee trade in Nicaragua and Louisiana who had a summer home in Greenport, New York. Kalisch and his wife would often spend weekends with Janovich and his wife.
Kalisch and Janovich spoke at length about the scheme, and Kalisch would later testify that Janovich understood that paying bribes for unauthorized mining was involved.
During one of those summer weekends, Janovich suggested that Kalisch seek financing from the Maple Trade Finance Corp., an investment firm with a $100 million portfolio. Janovich had another old friend there named James Culver, who happened to be the president of Maple Trade. Those discussions began around June 2003.
Maple Trade was already "familiar" with the Brazilian marketplace, having done large business deals in Brazil, including a $40 million venture with a Brazilian sugar manufacturer.
Culver had an interesting background himself. He was an investment fund manager, and had worked as chief economist for the House Agriculture Committee and as a visiting professor of economics at Baruch College in Manhattan. (Culver, Kalisch, and their lawyers did not respond to repeated calls for this story.)