A
Lurid Aftermath to a Hedge Fund Manager’s Fast Life
JUPITER, Fla.
— A life of private jets and black-tie balls ended with Seth Tobias,
a wealthy investment manager and a familiar presence on CNBC, floating face
down in the swimming pool of his mansion here.
It was just
after midnight on Sept. 4 when Mr. Tobias’s wife, Filomena, frantically
called 911. “Please send somebody, please!” Mrs. Tobias screamed.
“He’s not breathing!” By the time the police arrived, she had
pulled her husband’s body to the edge of the pool, where she cradled
his head in her arms, sobbing.
Mr. Tobias,
who was 44 years old, had apparently suffered a heart attack, his brother
Spence said at the time. The police did not consider his death suspicious.
But now an unfolding
drama over Mr. Tobias’s estate is providing a lurid account of fast money
and faster living in the volatile world of hedge funds. Mr. Tobias’s
four brothers and Mrs. Tobias are locked in a legal battle over the estate,
which is worth at least $25 million. And, in a civil complaint, they have
gone so far as to accuse her of murder.
The brothers,
Samuel, Spence, Scott and Joshua, claim Mrs. Tobias drugged her husband and
lured him into the pool. Bill Ash, a former assistant to Mr. Tobias, said
he had told the police that Mrs. Tobias confessed to him that she had cajoled
her husband into the water while he was on a cocaine binge with a promise
of sex with a male go-go dancer known as Tiger.
Mrs. Tobias’s
lawyers call the claims outrageous. She has not been accused of any crime.
The mystery
deepened when it emerged that Mrs. Tobias spent $9,628 to have the pool drained
and resurfaced days after her husband died, according to documents filed in
an unrelated case.
The salacious
accusations have captivated this wealthy enclave north of West Palm Beach
and transfixed the investment world in New York, where Mr. Tobias ran a $300
million hedge fund from an office on Park Avenue. From the Breakers hotel
in Palm Beach, a stately symbol of old money, to trading floors on Wall Street,
the epicenter of the explosive wealth now reshaping American society, the
case is seen as a parable of the modern gilded age.
“I don’t
understand why this hasn’t ended up on ‘CSI: Miami’ yet,”
said Jim Cramer, the host of CNBC’s stock-picking show “Mad Money”
and Mr. Tobias’s former boss on Wall Street.
The questions
keep piling up, starting with the big one: How did Mr. Tobias die? The police
in Jupiter have not opened a homicide investigation but are awaiting the results
of toxicology tests before making a final determination, said Sgt. Scott Pascarella.
At the center
of the dispute is Mr. Tobias’s will, which designates his brothers
as beneficiaries but does not name Mrs. Tobias. She contends that she
is entitled to the estate because the will was signed before the couple married.
In court filings, the Tobias brothers invoke Florida’s “slayer statute,”
which prohibits inheritance by a person who murders someone from whom they
stand to inherit. They claim she “intentionally killed” her husband
“by asphyxiation and drowning.”
One lawyer representing
Mrs. Tobias, Gary Dunkin, said he was shocked by the accusation. “In
my 25 years practicing law, this is the most reckless allegation I have ever
seen,” he said in court. Her lawyers, which include her prior husband,
Jay J. Jacknin, have asked the court to put off her depositions, citing her
“psychiatric condition.” They said she hired contractors to empty
the pool because she was distraught over her husband’s death.
However this
mystery plays out, it is providing a treasure of details about the lavish
lifestyles that hedge funds can afford their founders, and perhaps sheds light
on how all that money ultimately influences personal lives.
Mr. Tobias,
a native of Philadelphia, entered this secretive, often volatile corner of
the financial world after spending less than a decade on Wall Street, including
a stint with Mr. Cramer’s former money-management firm. He formed Circle
T in 1996, with $4 million, and parlayed that into a $300 million hedge fund
and brokerage firm. Circle T is in the process of returning investors’
funds; clients have not lost money.
He counted among
his investors Samuel Zell, the billionaire who recently agreed to buy the
Tribune Company. Mr. Zell, in an interview, said he rarely interacted with
Mr. Tobias. “I knew Seth for 10 or 15 years on a very unconnected basis,”
he said. “He was a good, smart guy.”
Along the way,
Mr. Tobias collected the trappings of success. He spent days at the Kentucky
Derby and nights at Donald Trump’s Mar-a-Lago Club. He frequently shuttled
by private jet between New York, where he worked in the Seagram Building in
Manhattan, and Florida, where he owned two homes.
Mr. Tobias made
— and apparently spent — millions of dollars a year, court documents
suggest. Outstanding expenses at the time of his death included $52,532 on
his American Express Centurion Black Card and $7,960 on his Bank of America
credit card. His mortgage payment for one of his homes was $35,000 a month.
He paid $1,367 a month to lease a Land Rover. His monthly cable bill from
Comcast was $535.19.
But the boyish
Mr. Tobias never ran with the titans of Wall Street. He was a small player
in an industry where successful managers command billions or even tens of
billions of dollars. Nonetheless, Mr. Tobias managed to make a name for himself
on financial-news television, appearing on “Squawk Box” and “Kudlow
& Company” on CNBC.
Now, the hints
emerging about his private life have captivated Wall Street. Mrs. Tobias told
the police that her husband may have been using cocaine on the night he died,
according to police reports. Some of Mr. Tobias’s former associates say
he used drugs regularly and often disappeared from his office for days or
weeks at a time.
Mr. Tobias’s
life was apparently as volatile as his investment returns. After Circle T
lost 5.3 percent in 2005, his marriage began to fray. In March 2006, the police
were called to the Tobiases’ home because of a domestic disturbance.
A few days later. Mr. Tobias filed for divorce. It was one week before the
couple’s first anniversary.
The Tobiases
later reconciled. But the divorce filings included a laundry list of accusations.
Mrs. Tobias stated that she caught him having an “adulterous affair”
and that he “gambled away tens of thousands of dollars and used other
funds on illicit habits.” She asked the court to award her $46,000 a
month for living expenses. He argued that she was constantly spending too
much money.
Even after the
couple reconciled, they fought constantly, mostly over money, according to
several friends, who asked not to be identified for fear of being subpoenaed
in connection with the case or because they were worried that their professional
reputations would be harmed by being associated with the case. At one point,
Mrs. Tobias bought a Porsche on her credit card and then cried when Mr. Tobias
told her to return it, one friend recounted.
They also secretly
frequented a gay bar called Cupids in West Palm Beach, in a strip mall along
a main thoroughfare. It was there, according to Mr. Ash, that Mr. Tobias first
met Tiger.
“Seth used
to come in here back when it was crazy,” said Adiel Hemingway, the longtime
manager of Cupids. As a flat-screen television blared hard-core gay pornography,
he said that Mr. Tobias often came to the club with his wife. Mr. Hemingway
took out a picture of Tiger in his office. Tiger is blond and covered with
tattoos that look like stripes.
“I know
exactly who he is, but I’m not telling you,” Mr. Hemingway said.
The Tobias brothers have subpoenaed Tiger, using the address of Cupids, but
have been unable to learn his true name.
The day Mr.
Tobias died, he spent the afternoon at the Breakers with his wife and several
friends, drinking and possibly using cocaine, according to Mrs. Tobias’s
statement to the police. From there, Mr. Tobias went with one of the friends
to E. R. Bradley’s Saloon, a boisterous open-air bar in Palm Beach that
looks over the Intracoastal Waterway.
What happened
next is unclear, except that Mr. Tobias was dead in the pool, with abrasions
on his nose, forehead and back. When the police arrived, Mrs. Tobias, on the
advice of a friend who is a lawyer, refused to let them enter the house, which
is perched on the edge of the sixth hole of a Jack Nicklaus-designed golf
course in a gated community. After returning with a warrant, the police found
a Ziploc bag with a white powdery substance and a small baggie and a straw,
as well as two empty plastic prescription bottles. Mr. Tobias’s eyeglasses
and a drinking glass were discovered on the bottom of the pool.
According to
the brothers’ lawsuit, Mrs. Tobias caused her husband “to ingest
one or more controlled substances that induced loss of consciousness and capacity
to breathe.” They further claimed that she caused him “to enter
the swimming pool at their residence after his ingestion of controlled substances
and in his stuporous and helpless condition he was asphyxiated and died.”
Mr. Tobias’s best friend, Patrick Bransome, said in a statement to police
that he had not seen him go in a pool or swim in years. Mr. Bransome declined
to comment.
A few weeks
later, Mr. Ash called the police and told them that Mrs. Tobias had confessed
to him and that he had a tape recording to prove it. Mr. Ash has a past: he
has been arrested at least 11 times on charges ranging from larceny to prostitution;
He has been called Mr. Madam because of a past connection he says he had to
Heidi Fleiss, the Hollywood Madam. Investigators flew to Mr. Ash’s home
in San Diego and spent a day interviewing him.
“She confessed
to me on tape,” Mr. Ash, said in an interview. “I believe she absolutely
did it.” He would not provide the tape, but expressed outrage that the
case was not moving more quickly. “I’m the only one standing up
for him. Who else in this whole crazy thing is looking out for him?”
The police in
Jupiter appeared unimpressed with Mr. Ash’s allegations. “You can
take it for what it is worth,” Sergeant Pascarella said.
Through her
lawyers, Mrs. Tobias refused to comment for this article. In a recent interview
with The Palm Beach Post, she said, “I’m broken. I haven’t
gone out in six weeks. I’ve been in and out of the hospital. I just pray
all day and wonder why people could be so evil.”
She said of
Mr. Ash: “All those rumors are disgusting. He’s a very sick man
who should be institutionalized.”
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