Several recent stories have featured me as the smug hero or the sympathetic victim. So, in the interest of balance, here is one where I am the dupe! Enjoy.

MY PERSONAL DEBT CEILING

Hamlet’s advisor, Polonius, said: “Neither a borrower nor a lender be.” Polonius was no dummy.
In 1986, a man named Billy Feehan invited me into his weekly tennis foursome. He was an amiable raconteur in the mold of an old-time politician. He slapped backs and shook hands like he was pumping water. He bear-hugged his doubles partners after winning shots and laughed at jokes, particularly his own, with a hearty laugh. His hair was suspiciously dark and thick for a man approaching fifty, but he never admitted to extracurricular efforts in that regard and it would have been awkward to ask. After all, Billy owned the beautiful court where we played; to be a regular in his Saturday morning doubles was a privilege in our northern Jersey community where wait-times at public courts and tennis clubs were substantial and unpredictable.
Billy was proud of his tennis ability. He propelled his barrel-chested torso with surprising agility over chicken-thin legs. After he made a winning shot, he often declared: “Whoa, bet you didn’t think I could get to that! No, you didn’t. I’m da best!”

Though I only knew Billy in the context of suburbia, I had no reason to doubt his youthful tales of stickball dominance in some corner of “da Bronx.” Trash-talk, for Billy, was an integral part of the game.
Ownership of a backyard tennis court might create a misimpression about Billy’s social status. Though surrounded by wealthy communities, his town of Hawthorne was largely working class. The court took up the entire yard. In fact, its perimeter fencing formed the boundary lines. By what means the local zoning board approved such a configuration the local planning board, I couldn’t imagine. Perhaps, Hawthorne had simply never conceived of the possibility of a backyard tennis court, so had no regulations.
In any event, Billy ran an insurance agency he inherited from his father, and professed to do well. Besides Billy and me, our group consisted of Ray and Gary. The four of us didn’t interact outside of Saturday mornings. Typical of such all-male groupings (this may be hard for women to believe) we never discussed anything of substance and knew almost nothing of each other’s personal lives. Though Ray and Gary knew of my real estate law practice, I didn’t even know their last names. Post-tennis discussions over bagels and orange juice, which we took turns providing, proceeded as follows:
“Hey, I really kicked butt today,” said Billy.
“You played tough,” I said.
“I’d whip you guys for another set but I gotta check out some land,” said Billy. “Got some investing to do.”
“Sounds good,” said Gary. “Where is it?”
“Oh, up in Westchester, Rockland, y’know,” said Billy.
“Great,” I said, skeptical in the face of such vagueness.
“I might do some developing,” Billy continued. “Any of you interested in a big payday?”
“I’ll pass,” said Ray.
“I’m happy enough with my little paydays,” I said.
Billy turned to Gary. “You?”
“No, Billy, I don’t have cash,” said Gary.
“What a bunch a’ chickens,” said Billy.
And so on. Our little group was cautious by the standards of the mid 1980’s go-go real estate market, and we were especially cautious by Billy’s standards, apparently.
On occasion, Billy referred clients to me for legal representation in the purchase or sale of a home. I appreciated his efforts and I reciprocated, when appropriate, with insurance referrals. I viewed such a business relationship as normal. I was fortunate to have similar arrangements with other local realtors, bankers, neighbors and existing clients. I also received referrals from other insurance agents.
One day, Billy called to ask if I would have lunch with him. This surprised me since I’d never seen Billy off the tennis court. I’d never seen him in street clothes.
“I’ll take you to my club,” he said.
“I didn’t know you belonged to a club,” I said.
“Yeah,” he laughed, “Gino’s Pizzeria.”
“Listen,” said Billy, when I slipped into the booth across from him a couple days later, with my two slices. “I’ve got a proposition for you…”
In my experience, such a sentence rarely portended good things. I girded myself. Billy continued: “I’m trying to build up my insurance book, and I could really use your help. For every home buyer you refer to me, I’ll give you a friendly envelope, if you know what I mean.”
“Billy,” I said, having anticipated something along these lines: “That’s not necessary. I refer people without strings, without expecting a kickback, not to mention it would be illegal.”
“Okay,” he said. “I understand where you’re coming from, you being a lawyer and all. I just figured everyone could use a little extra cash. I know I could.”
We finished lunch quickly, me feeling as though I’d touched something dirty and Billy devoid of his usual swagger. Our tennis games, however, proceeded as though nothing had happened. Several months later, I had nearly forgotten our awkward lunch when Billy announced, during a water break: “I’m adding mortgage brokering to my business. If any of you guys (he looked straight at me) know someone who needs a mortgage, I sure could use the help.”
“Wow,” said Ray, “you’ve always been focused on insurance.”
“Well,” said Billy, “insurance isn’t what it used to be. My commissions are getting squeezed.”
“That’s surprising,” said Gary, “since real estate is booming and all.” Addressing me, he added: “You must be doing great.”
“Yes, it’s been a good run,” I said, also wondering if there was more to Billy’s story. I renewed my determination to avoid entanglements with him beyond the ordinary.
Soon thereafter, Billy referred a young woman to me. She was buying a condominium in Hawthorne, and Billy said he was arranging her mortgage. Her contract appeared straightforward from my perspective, and she impressed me as a nice person, calmer than the average first-time homebuyer. Whatever concerns I may have felt initially, due to her connection to Billy, were assuaged as the transaction proceeded routinely. The day before closing, however, Billy called sounding frantic:
“There’s a problem with Maria’s deal,” he said.
“What do you mean?” I asked. “Title is clean, her mortgage commitment looks good.”
“I may have made a little mistake with her paperwork,” said Billy.
“Hunh?” I said, gripping the receiver tighter, tension filling my gut.
“Um, ah,” sputtered Billy. “She had to show some liquid assets to close, but, ah, she doesn’t really have any.”
“How did she get the mortgage commitment?” I asked.
“Well, I ah, sort of, ah created some documentation for her,” said Billy. “I figured she could get the cash from a buddy of mine in Paterson for a second mortgage, but he says he’s tapped out.”
“Are you saying you forged her application?” I asked.
“Hey, ‘forged’ is a pretty harsh word,” said Billy. “I ‘improved’ it.”
I breathed deeply and remained silent for a moment while the ramifications welled up in my mind. I recited them off aloud:
“Maria has already waived the protection of the mortgage contingency since she received a clean commitment. She stands to lose her deposit of $20,000 if she doesn’t close. The seller won’t be able to move and he could lose his deposit on the house he’s planning to buy. His sellers are screwed, too. This is like disaster dominoes. Maria could be on the hook for it all, too, and she’s going to sue you, Billy, for sure.”
“And everybody else in this deal,” said Billy, pointedly.
I felt anger pounding in my temples, anger on behalf of Maria, and anger on behalf of myself. I hated crises, of course, particularly when I’d played no role in their creation. This situation was like a comet falling on my head from clear, blue skies.
“Only you can save the situation,” said Billy.
“How’s that?” I asked curtly.
“If you provide $20,000 for the closing, I’ll get you paid back in a week. I’ll rustle up the dough,” said Billy.
“Are you crazy?” I asked, my heart pounding to match my head. Besides the outrage of his assumption that I would simply write a check for $20,000, I was certain lending money to a client was frowned upon by the rules of ethics.

“Billy, if it’s that simple, why don’t you write the check?” I asked.
“Oh, I’m not liquid,” he said. “My money’s tied up in land.”
“What does Maria say about this? Can her parents help?” I asked.
“No,” he said. “They don’t have money. I told her I’d take care of arranging the down payment. She doesn’t even know about this. She’s just a babe in the woods.”
“That apparently makes two of us,” I said.
“Listen,” Billy said. “It’s simple. You provide the $20,000, Maria gets her condo tomorrow, no one loses anything, and no one gets sued. I’ll pay you back in a week. I’ll even get you an extra thousand bucks, cash. That’s half of my commission.”
“I don’t want your commission,” I said, bitterly. I felt revolted, like I’d tasted something rancid. In a way, I had.
I tossed and turned that night. I didn’t share the dilemma with anyone, at work or at home. Finally, when I weighed the risks and benefits, I decided I’d rather risk the money and decent sleep for one week than consign Maria and her innocent seller to the meat grinder of our legal system. I’d be stuck in it with them, too, with Billy, and it could take years to resolve. I’d have to pay $5,000 for my insurance deductible, at a minimum, and have higher rates moving forward. Anyone familiar with shotgun litigation, where everyone within range gets sprayed, will understand my decision to risk $20,000 was not without some rational basis.
The closing took place as scheduled. Maria appeared delighted and had no idea of the source of her down payment. I gave her a bouquet of flowers as a house gift, as I did to all home buyers. Billy arrived as we were finishing the first mortgage paperwork. I barely acknowledged him, but he made a big splash presenting Maria with a bottle of champagne. He winked at me when we made eye contact.

“Don’t worry,” he whispered. “It’s all set. One week, and you’ll be fine.”

He had Maria sign a note for her “second mortgage.”
I tried to put the matter out of my mind. Fortunately, I was busy with other closings and Saturday tennis was rained out. When the seven days were up, I drove to my office with dread. I hadn’t heard from Billy all week and wondered if he would show up; I tried not to consider what to do if he didn’t. To my relief, Billy stood on the landing at the top of the steps outside my office door with a broad smile and an envelope.
“What did I tell you?” he asked.
I didn’t respond, but took the envelope.
“Are we still friends?” he asked.
“I’ll think about it,” I said, pointedly failing to accept his handshake.
Billy turned and went down the stairs. Figuratively speaking, I’d dodged a bullet. It was like finding your car’s parking meter expired but you hadn’t gotten a ticket – except the magnitude was a thousand times greater. A reprieve! I felt elated. At my desk, in private, I opened the envelope. Instead of the hundred dollar bills I was expecting, there were tens and twenties. They totaled only $5,000. I felt like my head might explode.
I called Billy’s number and left a message demanding full payment and quitting the tennis group. Sparing the reader tedious details, I called and beeped (an annoying technology of the 80’s and 90’s) Billy’s number several times a day for the next several months, leaving messages on his answering machine ranging in tone from sarcastic to angry to pleading, depending on my mood. Rarely did I receive a response, but he eventually delivered two more $5,000 installments via a messenger, who ran into my office without notice and handed me envelopes.
Billy soon disappeared altogether. I left a message or two on his phone each week, out of habit and passive-aggression, but despaired of receiving full payment. As a relatively prominent local real estate attorney, my hands were tied. It was too embarrassing to report Billy to the police, let alone chase him in court. If I did, I would have to address my own stupidity, the ethical problems involved in my awareness of his forgery, and my lending of money to an unknowing client.
Nearly a year after the closing, by which time Billy’s line was dead, I happened to notice a newspaper headline: “Hawthorne Insurance Agent Charged With Fraud.” The article indicated that Billy had been arrested. Allegedly, he had accepted payments from customers and forged their coverage over a period of years, without forwarding payment to actual insurers. Six months later, I read of Billy’s conviction and sentence to several years in prison. I also read, with satisfaction, that he’d lost all his assets in the real estate bust precipitated by the 1987 stock market crash.
Considering the magnitude of his criminality, I considered myself lucky to have lost only $5,000. I hadn’t exactly been a “lender,” in the classic sense of the word, but the caution counseled by Polonius still made sense. I applied it with increased diligence for the rest of my career.

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