Ex-Goldman Trader Stung in Arms Plot, Shocks Colleagues

Like many of his brethren on Wall Street, Kevin Ingram, a top bond trader at Goldman Sachs and Deutsche Bank,

Like many of his brethren on Wall Street, Kevin Ingram, a top bond trader at Goldman Sachs and Deutsche Bank, had his share of career ups and downs. He had soared high at Goldman Sachs, moved on to a dream job at Deutsche Bank in 1996 and, like others during the bond-market collapse of 1998, was forced to resign.

Looking for something else to do, he started his own Internet bond-trading firm, which was recently forced to shutter its doors following the dot-com wipeout.

It was, for the most part, a typical Wall Street story–until June 21, when the U.S. Attorney’s office for the Southern District of Florida announced that it had arrested Mr. Ingram and a Pakistani national, Diaa Badr Mohsen of Jersey City.

The six-page affidavit supporting the charges went on to detail a plot straight out of Elmore Leonard.

In a sting operation in a Fort Lauderdale hotel room on June 12, the affidavit said, Mr. Ingram and an associate had been caught taking two cases stuffed with $2.2 million in cash from government agents. A Lear jet waited, fueled and ready to take Mr. Ingram to Amsterdam, where the money would be laundered, the affidavit contended.

Mr. Ingram was arrested as part of a broader sting operation on an alleged plot by Mr. Mohsen and another Pakistani national, Mohammed Rajaa Malik, to export arms, Stinger missiles and nuclear devices to an undisclosed foreign country.

Those who had worked with the 43-year-old Mr. Ingram during his 11-year run on Wall Street were thoroughly stunned. What in the world was Mr. Ingram, an M.I.T. graduate with engineering credits and a business degree from Stanford, doing mixed up in such a racket?

“I literally spat my coffee across the table when I read the story,” says one former colleague of Mr. Ingram’s.

Here was a guy who seemingly had it all. The academic degrees had led to a sparkling nine-year stint on Goldman Sachs’ government bond desk under such powerful patrons as Bob Rubin and Jon Corzine. Black Enterprise magazine had named him one of the top 25 African-Americans working on Wall Street in 1996.

Not until 1998, when he was tripped up by internal politics and the bond-market implosion at Deutsche Bank, was there a blemish on his career. But from that point, according to interviews with former colleagues, things started unraveling for Mr. Ingram. Entering the Internet marketplace at exactly the wrong time, his TruMarkets trading venture collapsed.

Still, it’s a long slide from a few business setbacks to charges of accepting a black bag stuffed with cash from an undercover agent in a Fort Lauderdale hotel.

Bob and Jon’s Pal

As one would expect, such a tale is heavy with mystery and contradictions. Mr. Ingram was a brilliant trader with casual work habits. He was a lover of fancy cars who lived in a New Jersey condo. A ladies’ man, he was also a doting father. A man with few loyalties, he was known to some of the most powerful players on the Street. And perhaps most telling: An African-American on Wall Street, he waited until his career’s end to play the race card.

When he did, it was a doozy: With the help of Jesse Jackson, he shook Deutsche Bank loose for a multimillion-dollar payoff following his forced resignation in 1998.

By all accounts, the highly sophisticated business of trading asset-backed securities came very easily to Mr. Ingram. After a brief stint at Lehman Brothers, he joined Goldman Sachs in 1988, and by 1992 he was promoted to run Goldman’s Collateralized Mortgage Obligations desk, overseeing all trading of mortgage and asset-backed securities.

“For pure quantitative skills, Kevin was as good as anyone I have ever met,” remembers one Goldman co-worker who knew him well. “He was outstanding and had a real ability to pull together complex financial structures.”

For the former engineer, it may have come a little too easy. Despite his rapid career ascent and considerable responsibilities. Mr. Ingram was known to coast a bit–coming in late, disappearing for hours. But at Goldman, results were what counted, and for Mr. Ingram the results were always there. Top Goldman executives like Mr. Rubin and Mr. Corzine were always on the lookout for minority stars, and they took a keen interest in fast-tracking Mr. Ingram.

By 1996, as co-head of Goldman’s government desk, Mr. Ingram appeared to be prime partnership material. He co-ran a major trading desk, was smart and was a minority. But he was also a puzzle, with his leisurely ways and his claims that he was a sports agent on the side, representing baseball stars such as Baltimore Oriole Jeffrey Hammonds, and a partner with Evander Holyfield, backing a black musical group.

His bosses and colleagues were always a little unsure of him. “There was always an edge to Kevin, a mysterious air,” says a Goldman associate. “He was smart and ambitious but, unlike everyone else, he was never chained to his desk.”

So when it became clear in 1996 that he was being passed over for partner–”I guess I’m not the chosen one,” he joked darkly to a colleague–Mr. Ingram began putting out feelers.

As luck would have it, Paul Jacobson, a former boss of Mr. Ingram’s who had left Goldman Sachs in 1993, had just joined Deutsche Bank to head its fixed-income division. He had been hired by Edson Mitchell, the notorious Merrill Lynch bond-trading star who had been given a mandate by the German bank to build–from scratch–a major-league investment-banking business.

In April 1996, Mr. Jacobson hired Mr. Ingram to run Deutsche’s mortgage-backed securities operation, giving him a blank check to build the bank’s business in all areas of asset-backed securities. For Mr. Ingram, it was a career move. He more than doubled his salary to $2 million-plus a year, controlled his own trading desk and had the giant Deutsche Bank balance sheet to wield in his pursuit of new business.

By the end of 1997, the desk–stocked with former Goldman colleagues–was generating more than $150 million in revenues. Mr. Ingram basked in success, adding a Bentley and Porsche turbo to his personal fleet, which also included a Lexus, a Range Rover and a 44-foot boat.

He was also stepping out. “Kevin always had these tall, incredibly beautiful models on his arm,” remembers a co-worker. “And they were not bimbos, either–they were 5-10 and gorgeous, with brains to boot. And the funny thing is that he was just 5-7. I would always ask him: ‘Kevin, how does a guy like you rate all these women?’ He looked at me and smiled. ‘Hey, man, it’s easy–80 percent of my competition is in jail.'”

In his early days at Goldman, Mr. Ingram had married a fellow Goldman employee, fathered a child and then separated from his wife. The boy moved to Michigan with his mother, but Mr. Ingram saw him often and even brought him into the office to run about the trading desk, colleagues say.

But while Mr. Ingram was collecting cars, he was living in a condo in Jersey City. His dress was modest. He didn’t seem to be a party boy, although the unexplained absences continued.

Meanwhile, he kept his distance.

“Kevin was a rough-and-tumble guy who looked out only for himself,” says a former longtime colleague. “He was loyal to no one. That was his biggest fault.”

Towards the end of 1997, Mr. Ingram’s main sponsor at Deutsche Bank, Mr. Jacobson, succumbed to an internal power struggle with Mr. Mitchell and left the firm. In January 1998, a trader under Mr. Ingram’s watch ran up a large derivatives loss, and the bank was forced to take a significant write-down. Yet in August 1998, Mr. Ingram was promoted by Mr. Mitchell to head securitization globally for the bank, a position that based him in London and made him one of the senior investment bankers.

Mr. Ingram was thrilled with the promotion, co-workers remember. But, they say, there had always been tension between him and Mr. Mitchell, who was eager to have his own man there. And with Mr. Ingram’s sponsor out of the way, the bad feelings between the two increased.

Colleagues remember that during the spring and summer of 1998, Mr. Ingram’s absences increased. Spending half his time in London and half in New York, he would sometimes go incommunicado for days–unusual for someone who ran a trading desk and was responsible for open positions of $7 billion and more.

“The absences could be from one day to three or four,” says a former colleague. “We would be leaving messages everywhere–his New York office, his two cell phones–and you wouldn’t hear from him. Then when he did call, he would never tell you where he was. I just assumed he was fucking off, at the beach, hanging out with a girl. But you really had no way of knowing.”

In September, the Russian market crisis and the blow up of Long-Term Capital sent the bond markets tumbling. Like everyone else’s on the Street, Mr. Ingram’s positions were shrinking as the markets imploded. A year’s worth of profits evaporated in weeks. In early September, Mr. Mitchell asked for his resignation, together with a bunch of other top bankers on his desk. But Mr. Ingram refused to give it to him: “You are going to have to fire me,” he reportedly said to Mr. Mitchell, according to those close to the matter.

Unlike his colleagues, Mr. Ingram refused to take the bank’s generous severance package. A stalemate dragged on. But Mr. Ingram, good bond trader that he was, knew a bit about leverage. According to former Deutsche Bank colleagues, Mr. Ingram threatened to sue, claiming he was fired because of his race.

Ingram’s Last Trade

At the time, Mr. Mitchell was in the midst of orchestrating Deutsche Bank’s high-profile, $10 billion merger with Banker’s Trust. But such an acquisition by a foreign bank would generate all sorts of scrutiny from Congress and regulators. A racially charged law suit would not help. So negotiations began.

It was then that Mr. Ingram brought in the heavy artillery. In January, Mr. Ingram was put in touch with Jesse Jackson through a third party at the Wall Street Project, a Rainbow Coalition-sponsored organization that pushes for increased minority hiring on the Street. A meeting was arranged. In March, Mr. Jackson and Mr. Ingram visited Deutsche Bank headquarters in New York and met with the bank’s then-U.S. chief executive, John Ross.

Traders were shocked at the sight: Jesse Jackson was on the trading floor. Kevin Ingram’s last Deutsche Bank trade, it seemed, would be a monster one.

Still, talks dragged on another month before a deal was struck, without Mr. Jackson.

“When Kevin Ingram was fired, it surprised a lot of people, including Reverend Jackson,” said a Jackson spokesman, Lou Colasuonno. “Jesse thought that there was more to the situation than performance. His unit was profitable; it seemed as if Deutsche Bank might have had other reasons.”

While the exact terms of the deal remain undisclosed, figures thrown around the Deutsche Bank trading floor have gone as high as $20 million. Deutsche Bank declined to comment, and Mr. Mitchell died last December in a plane crash. But Mr. Ingram’s former colleagues are certain a big deal was cut.

“Look, if I am Kevin and I’ve just been promoted to one of the top five positions in the bank, and then, three weeks later, I get fired for incompetency, I would have played it the same way,” one former colleague says. “He had enormous leverage. They had just ordained him. Edson Mitchell was dead wrong in firing him …. I would bet that he got at least $10 million. For Deutsche Bank, it was just another cost to getting the merger done.”

Mr. Ingram went on to join the Wall Street Project and, according to sources close to Reverend Jackson, made a contribution to Rainbow Push of “around” $100,000. Having thus squared his affairs, Mr. Ingram’s attentions turned elsewhere, and he soon fell out of touch with the Reverend and his organization.

Florida Transactions

While much of this was going on, Mr. Ingram, together with Peter McCarthy, a former Deutsche Bank colleague, started raising money for TruMarkets, which aimed to be a major online-trading platform for institutions to buy and sell bonds. In two years, TruMarkets raised some $30 million from sources that included Morganthaler Ventures, an early seed investor based in Silicon Valley; ex-Merrill Lynch president Herb Allison, who was also a board member; and the blind trust of Mr. Corzine. At the same time, Mr. Ingram began throwing his weight around politically, donating $20,000 to the Democratic Senatorial Campaign Committee.

According to government court papers, this was also the period of Mr. Ingram’s first money-laundering efforts. In June 1999 he showed up at the Turnberry Isle Resort in Aventura, Fla., with Diaa Badr Mohsen, owner of a Jersey City-based construction company and a supposed business partner, the government alleges. At the time, Mr. Mohsen was being tailed by undercover agents as part of a broader investigation into his involvement in an attempt to smuggle arms out of the U.S.

According to the affidavit, an agent held a series of meetings with Mr. Ingram in which he let it be known that he had funds coming in from arms sales that needed to be laundered. Mr. Ingram accepted $100,000 in cash from the agent, pocketed $9,000–his cut–and wrote the agent a check for $91,000, drawn on the account of Ingram Partners L.L.C. at Chase Manhattan bank.

A month later, the same agent met Mr. Mohsen and Mr. Ingram in Boca Raton and gave Mr. Ingram $250,000 in a black carry-on bag, the government alleges. Again, court papers say, Mr. Ingram took his 9 percent fee and explained how he would wire the money to a London account through his own company, Ingram Partners.

The papers say Mr. Ingram and Mr. Mohsen took the carry-on bag, got into Mr. Ingram’s yellow 1998 Ferrari Spider and boarded his boat at the Turnberry Isle Yacht Club.

By late 2000, the dot-com crash was having its affect on TruMarkets. It had an office on 33rd Street and a staff of 50, but no profits. In March, the company declared bankruptcy. Mr. Ingram was also forced to pull out of two development projects in Harlem.

Finally, on June 6, came the denouement. Court papers say that the same agent that had given Mr. Ingram money to launder almost two years earlier met up with him again at the Turnberry Yacht Club. This time, Mr. Ingram was alone; there had supposedly been a falling-out with Mr. Mohsen. The agent allegedly talked of $16 million in cash coming in from arms sales over the next year or so. But, according to the affidavit, Mr. Ingram was wary and asked that the agent not use such language.

But the agent insisted, saying that $2.2 million would be coming in over the next week. Would Mr. Ingram be interested in moving the funds through the same London account?

According to the affidavit, Mr. Ingram hesitated. “I’m a professional and I have a reputation, but I don’t mind making money,” he allegedly said. But he asked the agent if he was wearing a wire.

According to the government’s account, the agent reassured him that there was no cause for suspicion. Then the agent left, with Mr. Ingram saying he would get back to him. Fifteen minutes later, Mr. Ingram allegedly paged the agent and laid out his terms: He wanted a 20 percent transaction fee this time, and 5 percent more for transportation, the affidavit states.

Mr. Ingram allegedly also told the agent that he knew someone with a Lear jet and would personally take the money to London. The two arranged to meet on June 12 at the Boca Raton airport, according to court papers.

Mr. Ingram then allegedly met with the agent one last time at a Fort Lauderdale hotel and was handed his 25 percent take. Once again, court documents say, the agent said that the $2.2 million had come from arms sales; he also allegedly gave Mr. Ingram a photo of “their man in London.”

All was ready: the jet, the contact information. Mr. Ingram just needed the $2.2 million. According to the affidavit, the agent made a phone call and a second agent came to Mr. Ingram’s hotel room with two cases containing $2.2 million.

According to the government, as soon as Mr. Ingram accepted the cases, he was arrested.

Mr. Ingram has not been indicted and is free on $250,000 bond. His lawyer, Richard Lubin of West Palm Beach, insists that Mr. Ingram is in no way involved with arms smuggling. He declined further comment. Mr. Ingram did not return calls for comment. Ex-Goldman Trader Stung in Arms Plot, Shocks Colleagues