Underwater

NO ONE KNOWS where he is." That was the word that spread through his network of clients, in a panicky game of telephone, during the second week of July 2011.

His employees couldn't find him. He hadn't been to his office for days. There was talk he'd gone to unwind at the vacation house he owned in Galveston, Texas. There was also speculation, among the more anxious or the better informed, that he'd split Houston for somewhere in South America. Ominously, someone recalled seeing dark, unmarked cars parked in the lot outside the office of his investment firm on Friday, July 15. Men in suits were hauling out boxes. As the news got around, clients barraged his cellphone with calls and messages. Some were demanding their money; the run on the bank had begun.

It happened to be the febrile height of college basketball's recruiting season, and at a sports venue north of Houston called the Gym, a summer league tournament had just tipped off. The place was a hive of activity. Along with dozens of other coaches from across the country, Billy Gillispie, then at Texas Tech, had come to scope the talent. Surrounded by people who knew him well (he got his start as a coach in Texas high schools), Gillispie received a call on his cellphone. The blood drained from his face as he listened. "He looked like a zombie," a witness later recalled.

Gillispie had known David Salinas for some 20 years. Like many, he'd entrusted Salinas with a substantial amount of his life's savings -- in his case, a reported $2.3 million. Gillispie had spent many good times in Salinas' company. He'd taken his advice, accepted his trust. Now the friend and adviser was gone -- and all the money was maybe gone along with him. The coach hung up the phone and bolted for the exit. Later, acquaintances would hear that Gillispie had driven straight from the Gym to Salinas' Houston office, more than 30 minutes away. Salinas, though, was nowhere to be found.

THE RECORD SHOWS that for most of the latter half of his life, Joel David Salinas lived and worked in Friendswood, a quiet bedroom community 20 miles southeast of Houston. The record shows he arrived in 1983. It was the sort of town, founded by Quakers, that's described as an excellent place to raise a family, where the median annual income is $100,000, where the churches are many and where the Friendswood High School Mustangs rule. They knew David Salinas -- everybody called him by his middle name -- as a prosperous insurance man, or as a financial adviser to prominent college coaches, or as a sports-minded family man who once played football at Stephen F. Austin State University. The record also shows that he founded a summer league youth basketball team called Houston Select in 1992. He appears to have done so, like sports-minded dads everywhere, simply for the benefit of his son Chris, then 12 years old. Over the years, his team grew into an AAU "program," with a six-figure budget paid largely out of Salinas' own pocket, a national touring schedule, a staff of volunteer coaches, a sponsorship contract from Adidas and several alumni in the NBA.

Salinas called his team Select because there were, at least initially, no tryouts. He selected the players himself, plucking them from area schools, usually by word of mouth. To fill his roster, he looked chiefly toward the Houston inner city, especially the Fifth Ward and the Third Ward, where the median income is $5,300 a year -- less than the per-capita GDP of Botswana. In these precincts, Salinas built a reputation as a man who offered one-way tickets out. The tickets were college scholarships.

For the nearly 20 years that he sponsored Houston Select, Salinas was "in it to help the kids," says one basketball coach at a high school in the Third Ward. It's a bromide, of course, and often a self-serving one, trotted out by those who would seek to profit from the athletic talents of teenage boys -- agents, shoe-company executives, coaches, the NCAA, the universities themselves: We're in the business of helping kids. And yet, by almost all accounts, David Salinas rose above the filth of the AAU genre. Known for his tough love, he became something of an icon in Houston youth basketball circles. He may not have fielded the most talented summer league teams in the city, but it was widely agreed he had a monopoly on integrity.

"Believe it or not, I don't care about the wins/losses," Salinas once wrote in a blog that he used to chronicle the doings of his Houston Select program. "I do care about loving the game and playing with passion." If players misbehaved on trips to tournaments in far-flung places -- Las Vegas, Los Angeles -- Salinas would not hesitate to spend hundreds of dollars on one-way tickets home. His team slogan is cited by players and coaches to this day: "Live like a gentleman. Play like a thug." Most parents and players came to revere if not adore him. More than one has compared him to Bobby Knight.

Louis Truscott, a 6'7" forward, has spent the past eight years playing overseas, most recently for the Club Atletico Quilmes of the Liga Nacional de Basquetbol in Argentina. Truscott grew up in the Fifth Ward. For most of that time, his father was absent. In the eighth grade, he was sent by his mother to live with an uncle so he could escape the "wrong crowd." He bounced between guardians, living one year with the family of his sister's middle school math teacher. He flunked the eighth grade. But by the mid-1990s, by the time he was 19, four years after being recruited by Salinas to play for Houston Select, Truscott was ranked among the top 100 high school players in the country. Salinas began doing all he could to ensure that Truscott made good on his talents and earned a scholarship. Early on weekday mornings, he'd give Truscott wake-up calls to make sure he got to class before the bell. To secure his academic eligibility, Salinas paid for summer school. He forced Truscott's high school to update its 48H-form paperwork, vital to moving an athlete through the NCAA clearinghouse. Salinas helped financially too. He put Truscott to work and paid him an hourly wage. "I had to go by his house and paint the fences. I was washing his cars, cleaning his pool." Truscott played for the University of Nebraska before transferring to the University of Houston, where he majored in sociology and minored in African-American studies. Says Truscott, "He basically taught me how to be a man."

There were other Truscotts in other years. DeWayne Reed, Cartier Martin, Joseph Jones, Dexter Pittman. Salinas probably had one player in each class he felt compelled to help in this way. He bought some of them clothes for school. At one point, he basically had a tutor on his staff, a moonlighting teacher named Cookie Ragland. His largesse sometimes extended into players' college years; if they went to school far away, he might pay for their plane tickets so they could come home for holidays. "If David had died of a heart attack and none of this had happened," says a former Houston Select volunteer, alluding to the crimes that ultimately undid the man, "there would've been 300 former basketball players at his funeral telling great stories."

WHETHER DAVID DALINAS had some grand plan to target college basketball coaches is a mystery. Most who knew him doubt it, but the fact remains: By the mid-'90s, he'd built a sprawling network of contacts in athletic departments around the country. Salinas and his first wife divorced in 1994, and when he remarried in 1997, his wedding reception was full of coaches. At his Friendswood office, clients would gawk at the scores of framed, signed photographs of players that coated the walls. "To David ... " "For David ... " The network helped when Salinas looked to audition his Houston Select players for college scholarships; Houston Select, in turn, helped Salinas build his network.

You can trace it all back to 1987, the year Salinas incorporated the grandiosely named J. David Group of Companies, a business that law-enforcement authorities would later describe as an insurance and financial-services company. An insurance salesman for most of his career, Salinas at some point began taking money from friends and investing it for them. He also began to broker the kinds of coverages that protect college athletic departments and youth summer camps against injury liability. Among his biggest such accounts was Rice University. And it was through Rice in 1987 that Salinas met and befriended perhaps the most important contacts of his career: the new head basketball coach, Scott Thompson, and his young assistants Grey Giovanine and Willis Wilson. Salinas called them "my guys" and "my coaches." When they introduced him to their buddies from previous coaching stints and when they went on to new jobs and made friends on other staffs, the circle widened. Ray Giacoletti, Doc Sadler, Tim Jankovich, Gillispie. The college coaching community is a closed society, and Salinas now had a key to it.

He invested his coaches mainly in plain-vanilla assets: stocks, bonds, money market funds. But he promised and gave stable returns: 6 percent, 7 percent, 8 percent a year. "I'll be honest, I never even talked to him about the investments," says one coach-investor in the inner circle. "It was just he took care of it, you know?"

Salinas further cemented his status in the college sports world, at least locally, by donating hundreds of thousands to Rice and the University of Houston. His circle widened. The legendary Houston football coach Bill Yeoman, who retired in 1986, became a client, signing over to Salinas something close to $1 million of his retirement savings. Like many coaches who were Salinas clients, Yeoman wasn't a fastidious investor. "I'll tell you what," Yeoman said not long ago, "what cash I had saved up, and my wife had saved up and everything, we went with him. I didn't pay that much attention to it. It's terrible, but I've been in the habit of trusting folks all my life." Just days before the end, Yeoman sent Salinas a check for $50,000.

WORD GOT AROUND in the coaching world about the investment guy in Houston with the steady returns. Salinas rarely sold, rarely pitched. Clients came to him. "He just had a real good way about pulling people in to him, without it being obvious what he was doing," says Pat Foster, former Houston and Nevada basketball coach, who says he had money with Salinas for a short time in the 1990s. Salinas also loved to gossip. "That's where he was a real expert," one coach recalls. "A lot of people confided in him. He always knew when jobs were open or when guys were going to leave jobs." Coaching is a notoriously peripatetic profession, so whenever someone needed work, Salinas relished the chance to employ his Rolodex. Says Foster, "He'd call me every now and then and ask if I knew some AD or other, if I could help him get one of his guys a job."

Beginning in the late '80s, Salinas and his "guys" would gather each year in the host city of the Final Four. At first just some pals meeting for beers, over the years it became known as the "J. David" party. Hors d'oeuvres and an open bar, 300 people, usually held at the host city's Hard Rock Cafe. A guest list became necessary. Coaches looking for jobs would use the party to rub elbows with head coaches; coaches not on the list would try to crash it. Salinas, of course, worked the room, making sure his closest clients invited others they knew to the party. "That's how he grew the business," says one.

By the late 2000s, Salinas' assets under management had expanded considerably. Some people heard $100 million, others as much as half a billion. At least 18 coaches were clients of his in some capacity, including Gillispie, Gonzaga's Mark Few, Baylor's Art Briles (football) and Scott Drew (basketball), Nebraska's then-coach Doc Sadler, Illinois State's then-coach Tim Jankovich and Weber State's Randy Rahe, among others.

By far the most famous, though, was Arizona's Lute Olson. In Tucson, where he lives in retirement, his legend looms over the college town. The corridor walls in the Wildcats basketball offices feature life-size action shots of the legend in moments of high drama, a virile figure shouting at refs or signaling in plays from the bench. But on a morning in March this year, seated in an otherwise empty McKale Center arena, with championship banners hanging overhead, Olson seemed diminished -- and cagey on the subject of David Salinas. They had met in the early 1990s, through Scott Thompson, and became friendly, if not what you'd call close. "He was a very impressive guy," said Olson, who regularly attended the J. David Final Four parties. But not until 2007 did Olson sign on as a client. That's when Salinas flew to Tucson to make his pitch in person. He would manage for the retiring coach a portfolio of blue chip corporate bonds. Olson remembers John Deere and he remembers Valero. "And at the end of my career, I wanted to be very, very conservative." Ultimately, Olson says, he acted on the recommendation of Thompson. "He told me that even during the downturn, Salinas had been able to keep the profits going." Olson wrote Salinas a check -- the start of investments that ultimately totaled around $1 million. This was just months before the onset of the financial crisis. No one can know for certain, but that cool sum may have helped Salinas keep himself afloat.

FOUR HUGE PONZI schemes deeply linked to the world of college sports have come to light in the past few years: Nevin Shapiro's $930 million fraud, in which the homunculitic Miami Hurricanes booster channeled who knows how much stolen money to football and basketball players; an $80 million investment swindle, according to the SEC, allegedly helped along by former Georgia Bulldogs football coach and ex-ESPN analyst Jim Donnan; the $50 million Triton Financial fraud, which used Heisman winners (and Triton investors) Ty Detmer and Chris Weinke as pitchmen to unwittingly entice victims into a host of fake business ventures; and Joel David Salinas. Two of the frauds even had an overlapping victim: Salinas client Billy Gillispie also reportedly lost more than $2 million with the group that Donnan vouched for. (Gillispie declined to comment for this story.) Though fraud's ubiquity across the culture is plain to see on the business pages, one can't help but wonder if college sports are more predisposed to con artistry than other spheres of American life.

Experts in white-collar crime call it "affinity fraud." A scam artist moves like a virus among members of a tight-knit community, passed along by the natural trust each member has for others in the group. But the affinity must work both ways. Nearly every person who came in contact with Salinas mentions his easy charm -- a salesman so good he didn't need to sell.

"He was a lot like the coaches I've known," says Jason Skaer, a former Oklahoma State player and Salinas client. "He walked and talked and sounded like them. There's always that politician side of coaches, you know? They have to be good with people and work that system."

To preserve and defend their multimillion-dollar contracts, coaches must woo talented players. They must court alumni and stave off palace coups. They must, in other words, always be selling. Whether they saw Salinas in themselves or were projecting themselves onto Salinas -- in the end, it didn't matter which.

IN HINDSIGHT, IT'S clear that David Salinas was engineering an elaborate financial fraud. In hindsight, the clues seem obvious.

In 2006, Salinas embarked on an ambitious plan to create a new investment firm. Borrowing the name of his youth basketball team, he called it Select Asset Management. Beyond Salinas (who owned more than half of the firm's stock) and a few employees, its core shareholders were his oldest and best college coach clients. Many of their names appeared on Select Asset brochures under glowing recommendations. One old client, Grey Giovanine, even served as a member of a Select Asset Management investment committee, at least according to the marketing materials that SAM distributed to potential investors. Giovanine, who has led the Division III Augustana College Vikings of Rock Island, Ill., for the past 13 years, was known as one of Salinas' closest basketball-coach friends. And yet, according to Giovanine in an email, he knew nothing of his position on the investment committee until "I was informed so by the SEC ... I had no idea what was really happening."

Salinas' firm even had designs on expanding its clientele into the other big-time college sports. "We've had such great success managing investment accounts for college basketball coaches, we think we can replicate that with football coaches," read a marketing newsletter put out by Select Asset in 2010. That same year, the firm had a booth at the annual convention of the American Football Coaches Association.

There were other hints, other discrepancies. In the late 1990s, during the height of the Internet stock boom, Salinas acquired a taste for serious day-trading -- up $50,000 one day, down $50,000 the next -- according to a former employee who says he did little during the workday except trade stocks for Salinas' personal account. Salinas was sloppy with paperwork. He didn't possess the Series 6 and 7 licenses he would have needed to legally sell and trade financial instruments for clients. He did take the exams three times -- in 1985, '92 and '94 -- but failed on each occasion. When he spoke about his past at all -- "David didn't like to talk about the past; David was always about the present," says one old friend -- he had a tendency to embellish. He had never played football at Stephen F. Austin nor received a degree; he dropped out of the school after three years. There was no Wharton degree, as he claimed to at least one person he had earned. "He told me he had all of Rice's money, all of U of H's money," says one former Salinas client. Not so. He did not personally know LeBron James, as he often said he did. He did not manage $500 million or $100 million in assets, or anything close to it. There were also the investment oddities: the highly rated IBM and Boeing bonds that somehow paid a lush, risky-seeming 6 percent. There was the fact that when a trade went south for a client, Salinas would sometimes offer to reimburse the losses out of his own pocket, an illegal act. And there was the way in which he tried, in 2005, to persuade one investor to hold off on pulling out his money. Salinas came to the man's office one day and said, as the investor recalls, "If you're having any kind of problem, any at all, and you need me to hide money, just let me know. I'll hide it where nobody can find it."

EVEN IF A client had grown suspicious as several had, a Google search would have been incapable of turning up the undigitized morgue of the Corpus Christi Caller-Times, the newspaper serving the Texas town Salinas called home from 1976 until his rather abrupt departure seven years later. But had they thought to travel down the coast to Corpus Christi, and had they the time to scour the microfilm of that paper's archives, they would have found another David Salinas altogether -- a past life the current Salinas had managed to hide from even his closest associates.

In the late 1970s in Corpus Christi, Salinas was a rising political star, known as a charismatic and outspoken activist for Hispanic rights. He had a flair for the theatrical, for public relations. As the president of the local chapter of the League of United Latin American Citizens, he had a penchant for calling news conferences, says Ruben Bonilla, a lawyer and LULAC executive who knew Salinas well at the time. Also in the late 1970s, Salinas was the executive director of the local Big Brothers Big Sisters program. He was seen as a potential mayoral candidate with a bright political future not just in Corpus Christi but far beyond. Then, in 1983, just as the 32-year-old was about to begin a campaign for city council, his first run for political office, his ambitions were dashed. Someone -- most likely a political rival, Bonilla says -- tipped off the Caller-Times that the young phenom had not only fudged his resume ("including education, past employment and even his college sports participation") but had served time in Texas state prison on a felony forgery charge. In 1974, when he was 22, Salinas had attempted to pass bad checks, forging his mother's name. According to Salinas' own quotes in the Caller-Times, he had been trying to get money for drugs.

The incident was not isolated. Court documents show that after a Texas grand jury indicted Salinas for the forgery in 1974, he skipped town. He wound up in Northern California, in Shasta County, where he was busted in June 1975 on four counts of credit card fraud before apparently being handed back over to Texas authorities. He spent six months in prison on a two-year sentence. (A partial pardon from the governor in 1977 returned Salinas' rights as a citizen.) "You don't have the chance to do good if people know something like this," Salinas told the Caller-Times, attempting to explain why he'd falsified his past. "That only happens in books."

Salinas withdrew from the race, but the Caller-Times wasn't finished. A month later, in July 1983, the paper published another scoop, eventually revealing that Salinas had misappropriated as much as $92,000 from the Big Brothers Big Sisters program he once ran. State prosecutors were preparing to bring a felony case when he struck a deal to pay a portion of the money back. By the time the charges were dropped, he'd already fled up the coast some 200 miles to Houston -- a city that even in 1983 brimmed with wildcat promise and ask-no-questions verve, where men had long come to jettison their pasts.

IT WORKED FOR 28 years.

Then, in the summer of 2011, it all started coming apart. By that second week of July, when Salinas went missing, when Gillispie fled the high school tournament in apparent panic, when friends and clients began feverishly searching for the man, none of them had any idea how bad it had become. Unbeknownst to them, the SEC had already issued three subpoenas, two in the prior week alone, demanding that Select Asset turn over all documents related to the bonds Salinas had sold to more than 100 of his clients -- victims who would later claim losses in excess of $56 million.

The list was long and pathetic: Hope Village, a Friendswood home for the developmentally disabled, lost some piece of its nearly $5 million endowment. The Living Stones Church of Alvin, Texas, and its hardscrabble pastor, Al Jandl, lost 30 years of savings, more than $6 million. An elderly couple, members of the Living Stones Church, lost all of their retirement nest egg. Cartier Martin, journeyman NBA player, Houston Select alumnus and David Salinas favorite, reportedly lost north of $300,000 and, as some who know Martin speculate, possibly the total of his life savings.

As with Bernie Madoff or Allen Stanford or any other obvious-in-retrospect Ponzi schemer, what astounds today is that Salinas was able to keep it going for so long. The SEC's suspicions had been aroused more than six months earlier, in December 2010, when examiners found that Salinas had created two so-called lending funds -- pools of money raised from his top clients, many of them his "guys." The plan was to make loans to businesses. Sometimes they did. Other times, through a Gordian knot of transactions, Salinas essentially lent money to himself. He also made loans to a handful of clients, many of whom put up as collateral the very blue chip corporate bonds that Salinas had earlier sold them -- money cycling through his network like basketballs in a passing drill. Finally, in July, the SEC wanted to have a look at the bonds that were used as collateral. More subpoenas went out; Salinas disappeared. When the SEC traced the serial numbers that Salinas had long used to support the bonds' existence, the numbers referred to nothing at all. He was selling fake bonds. And poorly faked bonds at that. Monopoly money. Bush-league Madoff at best.

Regardless, by Thursday, July 14, Salinas had been unreachable for at least a few days to a small group of his Friendswood-area clients. Three or four couples who also counted themselves among his longtime friends, they had banded together to help search for the missing man. They went so far as to hire a private investigator. At that stage, according to one of those clients, they were merely concerned for Salinas' health; a decade or so earlier, he'd had suffered a moderate stroke. But soon those feelings changed radically. "Sometime on Friday," that client said, "he became a son of a bitch. We realized David didn't want to be found." Word had gotten around that the SEC was after Salinas. And with that realization came another: Their lives were about to worsen. Retirement savings gone. Children's and grandchildren's college funds gone. Work years extended. Safety nets burned. "We were betrayed by a friend," the client went on, the wounds still fresh. "That's what it is. A betrayal."

On Thursday night, Salinas' family filed a missing-persons report with the local police department. David's son Chris had driven to the vacation house in Galveston and saw it was vacant, according to a statement he later gave to police. There was, however, a missing Sea-Doo. Early on Friday morning, a Galveston officer made a call to David Salinas' cellphone, but the "mail box was full and unable to accept a message." Shortly thereafter, a Coast Guard helicopter rose into the air above Galveston Bay, and after less than two hours of searching, it sighted a man sitting motionless on a "damaged and disabled" Sea-Doo in the middle of the water. It was Joel David Salinas.

After being towed back to a nearby marina, Salinas told police he'd been out on the water all night and that he'd wanted to die. At some point in the dark, he'd gathered his nerve, squeezed the throttle and "rammed" the Sea-Doo into a post or pylon rising out of the waters in the vicinity of the marina. But, he told the officers, he "failed to hold on tight" and was thrown off the machine at impact. One of the officers asked him why he wanted to die. Salinas replied that he was "depressed" and "under a lot of stress" -- that he was "having big problems with his business." The officer noticed that Salinas was "choosing his words very carefully."

The officer asked why he couldn't just walk away from the business. His problems, he said, were "too big to walk away from." Salinas allowed the police to drive him to a hospital close to Friendswood for a psychological evaluation. Chris and other members of his family were there. Sometime Friday evening, or perhaps in the wee hours Saturday -- the record is unclear -- Salinas was allowed to leave.

On Saturday, the band of clients and friends who'd been searching for Salinas learned he'd come back to his house in Friendswood. Those clients included a University of Houston booster (and former Cougars football player under Bill Yeoman) and his wife, as well as another couple who lived directly next door to Salinas. They all assembled at the neighbor's house to confront the man who they believed had ruined their lives. Throughout the day, as that posse attempted to reach him, Salinas apparently did not answer his phone or the buzzer on the gate that blocks the winding drive leading to his house, where a later catalog of belongings included $19,000 in cash.

IT IS NOT KNOWN whether Salinas left a note. What is known is that in recent days and weeks, he'd made a last-ditch effort -- poorly conceived and ultimately unsuccessful -- to put things right. The record clearly shows that he had wanted to make "his guys" at least partly whole: He'd named a handful of them, including Yeoman, as beneficiaries on life insurance policies worth $4.8 million. It's a commonly held myth that insurance policies never pay out for suicides. David Salinas, longtime insurance salesman, would surely have known that they do.

On Sunday morning, the posse assembled once again at the neighbor's house to monitor Salinas' movements. Once again, they were unable to reach him. But at some point, they saw his wife's car pass down the driveway and through the gates. She apparently felt confident enough in her husband's mental stability that she left the house to take their teenage daughter to summer camp. Salinas was alone.

At one point, a neighbor saw him standing in his driveway. She may have seen that he saw her; he moved to hide behind a garage post.

And then, sometime before noon, as the people of Friendswood gathered for Sunday service at the town's churches, as his furious clients stood vigil at the house next door, not 100 yards away, Salinas crept unseen onto the patio where the swimming pool glimmered and beckoned. The air temperature surpassed 90 degrees; the sky was mostly blue. He was carrying a handgun. According to details later collected by the medical examiner, David Salinas entered the pool and sank below the surface -- underwater and in the deep end -- where no one could hear the sound of the gun.

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