Posted on 06/08/2002 2:55:27 PM PDT by tictoc
The kingdom of Tonga is not amused. It entrusted its fortune – admittedly a meagre fortune – to the official court jester and promptly lost it in a string of bad investments.
The jester, a Californian investment adviser with a sideline in "wellness" cures, insists he made an honest mistake, but the Tongan government believes he has been laughing all the way to the bank, and is suing to try to recover the money.
Jesse Bogdonoff first became chummy with King Taufaahau Tupou IV as an account manager at the Bank of America in San Francisco. That was where the Tongan leader had parked $26m (about £18m) in government revenues.
Mr Bogdonoff was soon being wined and dined in the Pacific islands and given the official title of court jester. Entrusted with the kingdom's nest-egg, equivalent to half of Tonga's annual income, Mr Bogdonoff quit his job at Bank of America, but came unstuck after investing in a dodgy asset management company in Nevada and a string of failing internet companies.
Mr Bogdonoff, who learnt of the suit by reading about it in Californian newspapers, says he is the victim of factional intrigues among the Tongan leadership. But he feels chastened by the experience. "The jester has so many implications for the human psyche," he said. "For me, it now represents the divine fool."
The New Zealand Herald has more info:
King of Tonga's jester sued over bad investments
SAN FRANCISCO - The King of Tonga's royal jester is now preparing for a United States court date.
The kingdom has launched a US suit accusing the court jester - a former US bank employee who doubled as a royal investment adviser - with defrauding the Government out of US$26 million ($53.4 million)
Despite the comic overtones, nobody is laughing.
Defendant Jesse Bogdonoff, who said he was simply trying to help his friend the King by channelling Tonga's money into better investments, now believes that he is the victim of political intrigue among vying wings of the island's royal family.
"I've had people in Tonga calling for me to be thrown underground and cooked like a pig," Bogdonoff said yesterday after hearing about the lawsuit.
"The message they are putting out is that I'm a crook - and it's not true."
Tonga's legal advisers say Bogdonoff cooked up an elaborate scheme to defraud the Government that ultimately cost more than US$26 million, or more than half Tonga's annual Government revenues.
"I hope we can get some of that money back," Bruce Ericson, Tonga's lead lawyer in the suit, said yesterday.
Tonga's run-in with its royal jester has been big news in the tiny Pacific island kingdom.
According to Tongan officials, Bogdonoff, who was then working at the Bank of America, struck up a close relationship with Tonga's King Taufa'ahau Tupou IV after noticing that the kingdom had millions of dollars sitting in a low-interest cheque account.
Bogdonoff - who later asked for and received the appointment as Tonga's court jester - persuaded the Government to put him in charge of the US$26.5 million Tongan Trust Fund, which was established largely with money earned through the sales of Tongan passports to foreigners.
In 1999, Bogdonoff and his company, Wellness Technologies, recommended that the fund invest US$24.5 million in three companies: a Nevada-based purchaser of life insurance policies, an energy start-up company and a web business.
It soon became clear the investments were not performing.
The Nevada company, Millennium Asset Management, was almost out of business, the energy company Trinity Flywheel Power is struggling and FilmAxis.com is in Chapter 11 bankruptcy - its name up for auction at a starting price of US$1.
"As a proximate result of Bogdonoff's negligence, the Tonga Trust Fund has been damaged in an amount ... that, at minimum, exceeds US$24.5 million," the kingdom said in its lawsuit, filed in a US District Court in San Francisco this week.
The suit further charges that Bogdonoff, who calls himself a musician, poet, and American Buddhist, colluded with executives in the US companies to squeeze the Tongans dry.
"Defendants paid themselves and their friends and business associates millions of dollars in charges, commission and fees which they did not disclose" to the fund, the suit said.
Altogether, the Tongan fund seeks restitution of at least US$26.5 million plus possible punitive damages.
Bogdonoff, reached yesterday at his northern California home, said he was determined to fight the charges and might countersue Tonga for character assassination.
He conceded that the initial investment in Millennium Asset Management had gone south.
But he said he travelled back to Tonga in October to present a plan to recover the money over five years through a revised investment portfolio guaranteed by Lloyds of London.
Bogdonoff said he walked into a royal power struggle - his allies on the losing side.
"They basically said we don't regard you as an ally and are coming for you," Bogdonoff said.
Two Tongan Government ministers who acted as fund trustees - Deputy Prime Minister Tevita Tupou and Education Minister Tutoatasi Fakafanua - resigned after the Government began investigating.
The plan was that an unclaimed atoll that remained underwater at low tide was claimed by these folks. The plan was to build a seawall to allow dry land. The nation would be run on libertarian principles and funded by fees generated by trading in the planned port. The country was called Minerva after some Godess of something or other. There were even coins minted and sold as a means to raise funds.
I recall that the king of a nearby island, which I believe was Tonga came over in a 'War Canoe' and drove the new country folks away, claimed the atoll as part of his kingdom and that was the end of the story.
So, if my recollection is correct, I say "Yipee" to their loss. ;*)
Didn't know about that, thanks. I used to believe that pre-handover Hong Kong was the world's most libertarian country. Now...
Apropos of nothing, whatever became of former Patriot running back Mosey Tatupu?
Likewise my fellow Canadian have been electing jesters like that for the past 30 years or longer.
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