Busy Banker

A barhopping good ole boy

By day, W. Darrell Wiggins, 48, was every inch a button-down banker. From 9 a.m. to 4 p.m., the senior vice president of Houston's Allied Bank of Texas (1980 assets: $1.3 billion) presided soberly and quietly over the bank's 15-man international division. But by night, the portly and bearded Wiggins moved onto a faster track, barhopping along Houston's nightclub circuit, where he showed affection to his favorite topless dancers with $100 tips.

On weekends, Wiggins immersed himself in an even more extravagant pursuit as a multimillionaire cattle breeder. He rode high in the saddle as owner of a six-state ranching empire that included the U.S.'s largest herd of Limousin beef cattle, a prizewinning French breed.

Though Houstonians had always assumed that Wiggins had a silent partner for his far-flung ventures, it now turns out, according to bank lawyers, that his unwitting sugar daddy was none other than Allied itself. By using a paper shuffle involving financial notes called bankers' acceptances, Wiggins, starting in the early 1970s, helped himself to $16.7 million from Allied's international department, say the lawyers. Says Barbara Hecker, 39, a former girlfriend: "I used to ask him why he stayed on at the bank when it seemed he could make so much more money raising and selling cattle. Now I know why."

Allied Bank thus joins a growing list of U.S. banks that have been victimized by unscrupulous employees. Earlier this year, California's Wells Fargo Bank was bilked out of some $21 million in a scam involving bogus transfers between branch offices, and last week reports surfaced of a $20 million loan fraud scheme at Chase Manhattan Bank in New York City.

As Bank Attorney Joseph H. Peck Jr. reluctantly confirmed, Wiggins' ploy was to sell bogus bankers' acceptances to unwitting buyers in New York. He was able to do this undetected because, in his capacity as head of international operations at Allied, he had authority to sell acceptances on behalf of the bank itself.

Bankers' acceptances are widely used in foreign trade transactions. If an exporter sells a shipment of goods to a foreign customer, three months or more can go by before the exporter gets paid. Meanwhile, he must carry the cost of the goods he has already sold and shipped. To get his money earlier, an exporter often negotiates a short-term bank loan. The bank then stamps the note ACCEPTED, which guarantees repayment even if the borrower reneges, and sells the document at a discount on New York's short-term money market. Many millions of dollars in such-notes are sold daily in New York, and last week they yielded interest rates as high as 19%. As confirmed by Peck, Wiggins apparently operated a disarmingly straightforward scheme. First, he dreamed up a borrower and drew up the appropriate document in that name. Next he stamped the note ACCEPTED, and then offered it for sale in New York. Finally, the money from the sale was deposited in a private checking account that Wig gins had set up under a phony name.

When he needed money for bar tips, cattle or a new pair of ostrich cowboy boots, Wiggins could simply draw out funds against the account.

Each time an acceptance came due, Wiggins paid it off by selling another bo gus acceptance. His scheme was uncovered last January when internal audits discovered that the bank's books were out of balance. The revelation came about for the simple reason that Wiggins over looked an acceptance that was due to mature.

Wiggins confessed to the rip-off in a statement to the bank, though he pleaded that it all began when he promised a loan to an unqualified customer. At the same time, confirmed Peck, he deeded over all his assets to Allied, and even agreed to a bank demand that he give up any literary rights he might have or acquire -- in case he decided, for example, to try his hand at writing a book about his ca per. In early April the bank sold much of Wiggins' cattle holdings for $2.4 million.

It has also written off $9. 9 million as a loss against 1980 earnings, and filed an insurance claim for $10 million more.

Though no one has yet been charged with any criminal offense, that could change. The FBI, the U.S. Attorney in Houston and Texas state law enforcement officials have all opened investigations, and a federal grand jury has begun taking testimony in the case.

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