Swindle in Swanton, VT

The Marble Man came in the spring, when the rushing Missisquoi River tumbles gray and white past forgotten mills in Swanton, Vermont. He could have been just another regular at Pam’s Place, swapping stories over coffee with the locals — hunters and fishermen, dairy farmers, truck drivers, border-patrol officers, and commuters to St. Albans and Burlington. He was unassuming, tall and rangy in his jeans and baseball cap, affable and mild-mannered, with an appreciation for local history and eager to put Swanton back on the map. He appeared one day like a miracle, driving up from Burlington in an SUV, steering past the village green with its Victorian bandstand, past the old cemetery with the Civil War monument, and stopping at Town Hall, which stands near a historic Episcopal church, fashioned a hundred years ago from rough red stone hewn from local ground. It was the red stone that had brought John Byors to Swanton, one of only two places in the world (the other is Spain) known to produce a marble of this particular red hue: a rich, dusky, creamy-veined stone known here as Swanton Red. It was first quarried from a hill on the edge of town in the late 1800s by George Barney, who had also built the mighty Barney Marble Mill on the Missisquoi. Once, the precious stone had been carted by boat down Lake Champlain and beyond, cut and polished to ornament the Vermont State House, the baptismal font of a church in Montreal, the Detroit Post Office, the U.S. Mint in Philadelphia, Washington’s Union Station, and the Southern California Savings Bank in Los Angeles, among other sites. But the quarry hadn’t operated on a regular basis since just after World War II. When Byors arrived in 2000 to reopen the quarry, it had been more than 30 years since any stone had been taken out. But now, in the Middle East and the Far East, there were new markets of opulence demanding Swanton Red, and serious money to be made. And Swanton would profit, too. Byors planned a magnificent marble museum to lure tourists speeding by on I-89, complete with horse-drawn carts and old-fashioned barges on the Missisquoi: a northern Vermont Rock of Ages (like the widely visited granite quarry in Barre), tinted Swanton Red. Over the next few years, Byors’s plan progressed. The quarry came alive again, with trucks rumbling down the dirt road, carting away stone. Byors donated a polished red marble sign to Town Hall and a marble countertop to the visitor’s center at the Missisquoi Wildlife Refuge. Swanton schoolchildren took field trips to the quarry. Byors optioned several hundred surrounding acres for his museum. He dropped by Town Hall and gave the secretaries red “Barney bears” — small animal figurines carved from polished marble. When residents asked, he paved their driveways with crushed marble chips. Occasionally, investors would come by to view the operation and leave reassured by the cool, smooth touch of the rock. The Marble Man had promised to double their money, and any doubts faded away as they surveyed the fortune at their feet. Dick Thompson, the Swanton town administrator, was cautiously optimistic when he first met John Byors and heard his plans. Thompson, a small, wiry man of 61, is a lifelong Swanton resident. He can tell you that Swanton, six miles from the Canadian border, is one of Vermont’s earliest towns, built on the site of older Abenaki and French settlements and chartered in 1763. Town Hall, a former schoolhouse, was built eight years before Abraham Lincoln was elected president. The son of a St. Albans railroad man, Thompson played as a boy in the abandoned shafts and tunnels of the old Barney plant, now Marble Mill Park. He worked 30 years for IBM in nearby Essex Junction, while marrying and raising a family in Swanton, and then became the town administrator in the mid-1990s. “Best job I ever had,” he says. Driving a reporter around town, past neatly tended homes and a downtown still struggling to come back, he points out signs of progress. The local industrial park contains a cheese processor, a manufacturer of maple-sugaring equipment, a precision-tool company, a maker of doors and windows, a pharmaceutical company, and Vermont’s first biodiesel facility. The U.S. Border Patrol has a regional headquarters in town. Swanton retains its rural flavor, with dairy and agriculture, but has grown from 4,000 residents when Thompson was a boy to 6,400 today, thanks to an influx of commuters. Thompson knew that there had been a quarry years ago on the edge of town, on a long, low ridge off Route 7. But it wasn’t in his blueprint for economic development until Byors showed up. Byors said he’d traveled in China and Saudi Arabia cutting deals, and that Swanton was the only place in the world that possessed this grade of marble — that it was prized not only for its color but for its hardness and durability, “almost gem-like.” Later, he agreed to buy land in the town’s industrial park for his marble museum, and maybe a hotel, too. He even contacted the Discovery Channel about producing a documentary on the history of the marble industry. “It sounded quite grandiose and aggressive for Swanton, but we had a responsibility to pursue it, to do what we could to maximize the town’s tax base,” says Thompson. “It seemed too good to be true. I thought, ‘Wow! This could put Swanton on the map.”‘ Much of the Marble Man’s past is shrouded in mystery, but this much is known: He said he came from Massachusetts — from Marblehead, of all places. He said that his father and his grandfather were in the construction business on the North Shore. He worked for a time in the family business, specializing in ductwork, but he didn’t get along with his father and struck out on his own. In the early 1980s, when he was in his mid-twenties, Byors was a student at a carving studio in Proctor, Vermont, a hub of the marble industry. In the early 1990s, he was a hair stylist, with a salon in Swampscott, Massachusetts, with his own line of hair-care products that he peddled to area salons. “John had a lot of artistic ability,” recalls Frank Macrina, a Salem hair stylist. “He had marble busts that he had sculpted for sale in his salon.” Byors eventually gave up his hair-products business, and “disappeared,” says Macrina. About eight years later, in 2000, Byors reappeared and announced that he owned a quarry in Vermont. “He asked me if I knew anybody who was interested in doubling their money,” Macrina recalls. Macrina introduced Byors to a friend, Mark Pasquale, who owns Halftime Pizza, a bustling restaurant in Boston, across from the TD Banknorth Garden. Pasquale loaned Byors $50,000. Byors based his business in the heart of downtown Burlington, Vermont. He also ran an art gallery and rented an office upstairs and a marble showroom in suburban Williston. Byors told Pasquale that the money wasn’t just in the blocks quarried for decorative use in elegant homes and fancy buildings, but in the marble waste left behind. The smaller stones could be ground into dust in crushing plants and used in molds to make columns, table legs, fireplace mantels, and other objects. Any skepticism about who would spend money on expensive marble evaporated when Byors uttered the magic word: Dubai. The wealthy Arab enclave was in the midst of an extravagant building boom, carving whole cities and playgrounds for the rich from the desert. Opulent hotels, skyscrapers, condos, and palaces were going up, and there was an insatiable appetite for marble. Byors would return from trips to Dubai with stories about meeting princes and attending horse races. About a year later, Pasquale and Macrina took a ride up to Swanton, in a freak autumn snowstorm, to look over Pasquale’s investment. Byors showed him the workers cutting the marble, the crusher turning the excess marble into dust. Pasquale noticed that Byors’s cell phone kept ringing, and that he’d often check the number and not answer. But he was a busy man, and Pasquale was so impressed with the operation, and the volume of stone that was being quarried, that he rolled over his $50,000 investment. “You’d walk by the rock, uncut, unfinished, but think, ‘Here’s a solid investment,”‘ says Pasquale. “He talked about meeting us on an island, having cocktails, playing golf.” One time, frustrated that he wasn’t being paid faster, Pasquale screamed at Byors when he found out that he’d bought a $90,000 Land Rover. Eventually, Byors repaid Pasquale’s $50,000, then borrowed another $125,000 and made Pasquale a partner in his expanding empire. Byors said he faced such a high demand for stone that he was going to buy a second quarry in Canada, and still another one in Oklahoma, where, Byors said, the outlaw Jesse James had buried some of his loot. “One time I said to him, ‘John, you’re buying quarries, doing all these things, can we settle on a price [for my investment]?'” Pasquale recalls. “He said, ‘What do you think is fair?’ I said, ‘You tell me. I feel guilty — you’re doing all the work.’ He said, ‘Three million.’ I said, ‘Fine.’ “Then I asked, ‘You’re so generous — what are you going to be making?’ And he said, ‘Twenty, thirty times that.’ That’s what I wanted to hear.” Tatiana Bechard was working at a bank outside Burlington when she met John Byors. The Russian-born woman, vivacious with curly blonde hair, was coming off a traumatic divorce from her husband of more than 20 years. All her life she had scrimped and saved, hoping to build a comfortable cushion for retirement while raising two daughters, and now her divorce had left her feeling financially and emotionally unmoored. It was the fall of 2003, and Bechard was the head teller at Charter One Bank in Williston. Byors, glued to his cell phone and casually dressed in shirts and baseball hats bearing his VMIG (Vermont Marble Investors Group) corporate logo, was one of her biggest accounts. That winter, after Bechard had left the bank to work for a software company, she ran into Byors at a restaurant, and he began talking to her about his marble business. “I needed a new future,” she says. “I needed a passion and a nest egg.” Byors told her that he was going to purchase a mausoleum, which was being designed in Massachusetts, and resell it for $300,000. In May 2004, Bechard agreed to loan him $50,000, and Byors signed a note promising to pay her back $100,000 within six months. A month later, Byors introduced her to a Florida man whom he described as a NASA engineer, and Bechard loaned him another $50,000. The engineer had worked with a special glue that was used to attach the heat-shield tiles to the space shuttle, explained Byors. He wanted to relocate the engineer to Vermont to test the glue on attaching building insulation to marble tiles. Later that month, Byors told Bechard that he needed $600,000 for a down payment on a marble-crushing plant, his third, which would allow him to become the exclusive North American and Dubai distributor for a big Italian marble company. Bechard mortgaged a three-family house in Boston that she had inherited from her parents and loaned him another $475,000. In August, Byors told Bechard that he had trucks waiting to deliver polished marble tiles to Home Depot stores across the country, but he needed money to pay the truckers. Bechard came up with another $30,000. By now, Bechard was nervous enough to check Byors’s passport for confirmation that he had, in fact, been to Dubai. She also felt reassured when she saw the paperwork for a $48 million contract arrive in an envelope from Dubai. The first shipment of marble tiles from Swanton was due there in December 2004. Then Bechard’s money would start rolling in. That Christmas Eve, while Tatiana Bechard was anticipating her windfall from Dubai, a fateful meeting was occurring some 250 miles away, in the old fishing port of Gloucester, Massachusetts. Elizabeth Bonnie Akerley, a Gloucester fisherwoman who owned her own small commercial boat, was discovering some alarming news about her own investment in the Swanton quarry. Over the previous two years, she had loaned Byors more than $600,000, and he’d promised to double her money. As collateral, Byors had put up marble blocks he said were worth $80,000 apiece. A divorced mother of two, Akerley had gotten into the marble business after losing $1 million in the stock market thanks to her broker’s speculative technology investments. An old family friend, a former police officer, recommended a respected local lawyer, Jon Conant, a Harvard grad and coach of the high school hockey team.Conant, who was handling a real-estate closing for Akerley, suggested that she invest some of the surplus cash from the transaction in a quarry that he owned with John Byors. Conant described the prized Swanton Red marble and showed her tile samples and photos of the quarry. He also showed her an appraisal that said the quarry was worth $130 million, as well as documentation for $7 million worth of orders. Akerley and the ex-cop invested $100,000 in January 2003, $40,000 in February, $40,000 in March, $40,000 in June, and then, after receiving the first repayment of $10,000, another $30,000 in August. Akerley received two more payments, totaling $22,500, in the fall, but then the money stopped. One reason for the delay, Conant told her, was that a substantial payment from a Middle Eastern customer, wired to a bank in Florida, had been frozen by the U.S. government as suspected terrorist funds. Another reason was lack of working capital to fill all the orders flooding in. Byors was unavailable, Conant said, because he was traveling in China and the Middle East, procuring new orders. Following an interest payment from Byors, Akerley and the ex-cop agreed to invest another $325,000 each in January 2004, and $100,000 more over the next two months. Byors and Conant put up their life-insurance policies as collateral. Akerley waited for her money. And waited. Payment was “just around the corner,” she was told. Then Byors stopped taking her calls, and Conant filed for bankruptcy. In December 2004, she called an old acquaintance, a Gloucester accountant who had been Conant’s bookkeeper. They met on Christmas Eve. The bookkeeper confided that she and a friend had also invested with Byors and Conant — more than $100,000 — and hadn’t been repaid. Furthermore, a local charitable foundation had sued Conant for misappropriating $10 million, including nearly half a million that had gone to Byors’s marble venture. The bookkeeper told Akerley that Conant would solicit funds from clients who came away from real-estate closings with surplus cash. Furious, Bonnie Akerley vowed to sue. Her case found its way to Bob Wolfe, a Vietnam-era graduate of Hamilton College who jokes that he takes the cases that other lawyers don’t want. Wolfe had also developed condos in Boston in the 1980s and knew something about marble. “When I was a developer, I wound up on the mailing list for a stone magazine,” he says. “Every month I would read how the stone industry was getting creamed by cheaper imports from China, Pakistan, India. Now here I have a client who comes to me, having invested all this money, and my first question is: ‘How could this be — how is Byors doing it?'” Wolfe checked the land records in Vermont and discovered that Byors didn’t even own the Swanton quarry. It belonged to the Barney Marble Company, which was leasing the quarry to Byors. The president of Barney Marble was Oliver Danforth of Rutland, who had been in the marble business for 40 years. Wolfe called Danforth and identified himself as a lawyer for someone who was thinking of investing in the Swanton quarry. Danforth “gave the impression that Byors was a competent quarry operator,” Wolfe later wrote in an affidavit. The year before the $130 million appraisal, Wolfe learned, Danforth had purchased the quarry for only $75,000, and then leased it six weeks later to Byors, with an option to buy it for $4 million. Wolfe studied the appraisal that had valued the quarry at $130 million in 2001. The papers supporting the appraisal were suspect. One bore the signature of a man who had died some time ago. Another, from a Boston architect working on a project in South Korea, was only a quote. The project was never built. The architect told Wolfe that Byors had shown him tiles of Swanton Red and that the marble was of very high quality but too expensive; developers on several projects had rejected the architect’s suggestion to use it. Wolfe unearthed a Vermont business journal article from 1999, quoting Danforth that higher labor costs made Vermont marble more expensive than stone from Europe or the Far East. In the summer of 2005, Wolfe hired an investigator, who went to Swanton and saw that the quarry was inactive. Wolfe checked with the Canadian processor who was supposed to be holding the marble blocks that Byors had pledged for collateral; the processor hadn’t received any stone from Swanton in nearly three years. The marble blocks weren’t worth what Byors had claimed, Wolfe concluded, and even if they were, they were either fictitious, gone, or pledged as security to other investors. Late in 2005, Akerley sued Byors and some of his associates, including Danforth’s company, charging a massive Ponzi scheme to defraud investors. “The reason for the lack of quarrying activity was well known to the defendants,” the lawsuit charged. “The costs associated with extracting, processing, and shipping marble from the Swanton Red quarry were simply too high to be competitive in the global marketplace.” Still, they wanted to believe. The allure of all that marble was just too seductive. Some of Byors’s creditors — including Richard Hearn, Mark Pasquale, and Burlington restaurateur Copey Houghton, who along with family members had loaned Byors more than $1 million — believed that Byors was sitting on a gold mine. He was disorganized, not dishonest. He needed financial discipline, tighter controls, a good bookkeeper. Hearn, a retired management consultant, had met Byors in 2002, when Byors rented Hearn’s house in Williston and then signed an option to buy it. He started borrowing additional m oney secured by land around the Swanton quarry. Hearn, a Yale and MIT graduate who had consulted for the Pentagon, found himself entangled in Byors’s affairs. He recommended a Washington-area consultancy firm to help straighten out his sloppy books so that he could qualify for bank financing. When Hearn saw paperwork showing that Byors had promised some investors a 100 percent return, he figured it was “loan shark money.” Later, in a court hearing, Wolfe asked Hearn how he had squared Byors’s grandiose talk of Dubai with the fact that he couldn’t pay his rent. Hearn attributed the incongruity to the typical travails of cash-starved startups. “What would you do if you found a diamond mine in your backyard?” Hearn testified. “Even though you don’t have a track record of running a business, you oughta do something with diamonds in your backyard.” Wolfe asked the appraiser, Fred Blais, whether he’d been troubled by the discrepancy between the $75,000 that Oliver Danforth had paid for the quarry and the $130 million at which he’d valued it. “No, we were not troubled by that,” he replied. “You buy a business, it’s failing. Your name is Bill Gates, you just bought IBM [sic], and 20 years later you’re giving away $38 billion. Not million, billion. That’s the Great American Way.” Early in 2005, Hearn and Houghton attended a meeting of frustrated investors with the Washington consultants in Burlington. It was eye-opening: For the first time, Byors’s creditors were realizing how many of them there were. Houghton says they identified more than 100. Even more alarming were the reports that came that spring from a new consultant who had spent time with Byors, trying to sort out his books: Byors basically had no books. He didn’t know how much money he’d borrowed from whom, no marble was being sold, and there were few assets. The chance of the Dubai deal going through, the consultant said, was less than 1 percent. Byors had put at least $150,000 down on a Florida estate, furnishing it with a grand piano, and another $150,000 toward buying a $695,000 house in Ogunquit, Maine. He had also renovated the house he was leasing from Hearn, installing a Jacuzzi and redoing the kitchen with marble countertops. He’d purchased four horses for his wife, who liked to ride. He’d bought a Hummer and a Mercedes. “I didn’t know better than to spend company money on personal items,” Byors told the consultant, according to court papers. Byors acknowledged that other consultants had advised him that his actions resembled a Ponzi scheme; he apologized, saying that it was unintentional. He wanted to pay everyone back, make everything right. The consultant also visited the quarry, where frustrated workers said that hardly any marble was being quarried anymore. One stonecutter, 72-year-old Winton Patnode, who had worked at the Swanton quarry in the 1940s, had quit in disgust, convinced that Byors didn’t know what he was doing. Workers said Byors had told them they needed to just hang around and look busy when he’d bring a potential investor by for a tour. Houghton had heard enough. He and some other investors went to the FBI in Burlington. Tatiana Bechard grew ill when she heard the news. But she still couldn’t believe it — she’d be admitting that her money was gone. Byors, who was calling her two and three times a day, fumed that the consultants were trying to discredit him so that they could steal his business, and that only he could save the company. “I was hanging in there,” she says. “I’m a very loyal person. When someone counts on me, I don’t like to let them down — until they take all I have, financially and emotionally.” When the FBI came to see her, Bechard questioned why Byors hadn’t fled, if he were really a con artist. But the authorities did worry that Byors might flee, and they arrested him on December 20, 2005. He was freed on bail, with the condition that he not try to borrow any more money. Three days after Christmas, he begged Bechard to meet him at Al’s French Frys, a South Burlington diner. Wild-eyed, he implored her to guarantee a $50,000 loan from a local businessman so that he could hire a lawyer and straighten everything out. He wouldn’t let her leave until she agreed. “He was relentless,” she recalls. When federal prosecutors found out about the loan, they moved to revoke Byors’s bail. He was imprisoned in St. Albans until he tried to borrow money from the family of another inmate. He was then transferred to Clinton County Jail in upstate New York. On April 13, 2006, Byors was indicted by a federal grand jury in Burlington on 57 counts of fraud, wire fraud, mail fraud, bank fraud, and money laundering. Byors was accused of taking up to $8 million from more than 75 people while repaying only 16 of them — one of the largest frauds in Vermont history. Byors, who is married and has two young children, one born while he was in jail two years ago, passed his 50th birthday behind bars. To visit him, his lawyer has to take a ferry across Lake Champlain, where the marble boats once sailed. Last spring, Byors signed a plea in which he agreed to admit to three counts and pay $8.3 million in restitution to his victims — a hollow figure, since few believe he has that kind of money. In return, prosecutors would recommend a prison sentence of six to seven years. But the deal fell apart. Bechard says that the feds told her that they had revoked the agreement because Byors was continuing to solicit loans from fellow inmates. (His lawyer, who was seeking a change of venue, and federal authorities in Burlington declined to discuss the case with Yankee.) His trial is scheduled to begin in March. Byors’s investors don’t expect to ever see their money again, but some wonder. “I feel that he has this stone buried up in Canada somewhere,” says Pasquale. “His personal expenses don’t add up to $10 million. A lot of marble went out of that quarry. So where’d it go? Maybe it’s just lying on the ground in Canada, and you’d never know to look at it.” Wolfe, who is pressing Bonnie Akerley’s lawsuit, also wants to go after those business associates he believes aided and abetted Byors in recruiting investors. Conant, the Gloucester lawyer, went to prison in Massachusetts for stealing money from clients in an unrelated real-estate deal and was disbarred. He moved to Vermont, where he made snow last winter at a ski resort. Tatiana Bechard was Byors’s biggest victim, losing $1.2 million and the Boston house where she’d hoped to live one day. She remembers going to court in Burlington and watching as Byors was led into the room in handcuffs. She sat directly in his line of vision, but he refused to meet her eyes, staring past her “like a ghost.” “After he went to jail, I started connecting the dots between all the stories,” she says. “It was actually a relief that he was locked up, because he couldn’t call me anymore. He had become a haunt. Now I didn’t have to deal with him asking for stuff. It was like an obligation was gone — and along with it, everything else. “He squeezed everything out of me that he could. He had absolutely no conscience,” she continues bitterly, wiping away tears. “Everything that I saved and never spent on myself, it’s all gone. Thirty years of denying myself. I feel like the biggest loser.” Back in Swanton, life goes on. Dick Thompson, the town administrator, drives a reporter down Route 7. “It’s a sad story all around,” he concludes. “John used to say that there was enough marble here for our grandchildren and our grandchildren’s grandchildren.” Farther down Route 7, there’s a natural spring near the old Bullard’s Tavern (now a private home), where George Barney, a prosperous local entrepreneur, stopped to water his horse one day in 1870 as he returned home from a speech to businessmen in St. Albans. He was the founder of the original Barney Marble Company and operated other quarries that produced black, green, and gray marble, as well as the bustling mill on the Missisquoi. That day while his horse drank, Barney looked down on the ground and noticed some alluring red rocks. He picked up some samples and analyzed them in his lab. Then he bought the land and opened the quarry that would supply the fabled Swanton Red. Thompson turns onto a dirt road, unlocks a metal gate, and drives carefully through a narrow tunnel beneath I-89. The road climbs past bogs, cow pastures, and scrubby fields, rising above the wintry mist and curving up to the top of a forested ridge. Great slabs of marble, streaked red and white, thrust up from the earth, veined and timeless. You can pick chunks of it off the ground. It’s heavy in your hand, a product of the forces that shaped it — the stuff that dreams are made of. Read about other New England frauds.