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This episode of Swindled may contain graphic descriptions or audio recordings of disturbing events which may not be suitable for all audiences. Listener discretion is advised. This optimism, raised higher by avarice as hot air raises a balloon, rose until 1969. By then it had produced Bernard Kornfeld in an outfit called Investors Overseas Services.
Bernie Kornfeld is an American success story. Born in Istanbul and raised in Brooklyn, Bernie started his career as a cab driver, became a social worker, and then made a fortune as a mutual fund tycoon. The mutual fund industry was taking off in the late 1950s. Following the Great Depression, the average investor had become more risk-averse and diversified. The pooled assets of a mutual fund were the perfect response.
Bernie Kornfeld recognized which way the wind was blowing, but he took a good idea and made it even better. In 1956, Bernie moved to Paris and established an offshore mutual fund, meaning that his mutual fund would invest in American mutual funds but would be free from the annoyances of U.S. regulations and taxes. Ex-pats, service members, and foreign nationals did not hesitate to buy in.
Over the next decade, Kornfeld's Switzerland-based company, Investor Overseas Services, or IOS, became a $2.5 billion financial empire. There were over 1 million shareholders in 120 different countries. IOS oversaw 60 banking, insurance, and real estate subsidiaries, all outside the law and the palm of Uncle Sam. Bernie Kornfeld called it, quote, people's capitalism.
Why have you chosen to live like this, the way you do? It happens to be a very agreeable way to live. And I think...
Most people would probably enjoy living this way if they could and I'm happy that I'm able to live this way. I try to surround myself with interesting and attractive and creative people generally and certainly attractive women are a part of this and I really enjoy having them around. They're one of the things that make life
Sparkling. Bernie Kornfeld's lifestyle was legendary. The small, bearded man lived in an 80-room, 13th century castle in the French Alps, part of which he had redesigned to replicate the Lower East Side apartment where he had grown up. One of the rooms would be full of young, beautiful women, drinking wine and playing backgammon, shooting daggers at Bernie through the mirrors on the ceiling, waiting for him to get off the phone.
In the next room you might find Bernie's octogenarian mother, who also lived on the premises. Down the hall you might come across half a dozen bodyguards, the four Great Danes or the two Ocelots that roamed freely. Bernie Kornfeld also had a townhouse in London and an apartment in Paris. He visited each one on a routine basis with the convenience of a private jet. He had a speedboat, sports cars, Rolls Royces, and Cadillacs. Bernie had it all.
And while he reveled in his wealth, his sales force of up to 25,000 people were busy selling one of iOS's 18 mutual funds door-to-door throughout Europe. iOS even sold one mutual fund that invested in nothing but other mutual funds. It was called the Fund of Funds, and it became a problem.
American securities laws barred any fund from owning more than 3% of any other fund. By 1965, IOS's fund-to-funds owned half of one popular mutual fund and almost 30% of another. The U.S. Securities and Exchange Commission took action. IOS capitulated. Bernie Kornfeld agreed to stop selling his products to Americans stateside or abroad.
It stunk, but IOS would survive. The company's mutual funds were growing in popularity among the Germans and the Arabs. There wasn't much that could hurt IOS unless the market tanked. Three years later, the market tanked. Investors panicked and began withdrawing their funds from IOS. Plus, the company was responsible for paying out guaranteed dividends. IOS was losing up to $5 million a day.
In order to raise money to keep his funds afloat, Bernie Kornfeld had no choice but to take the company public. Employees, investors, outsiders, and even Bernie himself purchased the stock, which quickly plummeted from $18 a share to $2.
By 1970, iOS's board of directors was also panicking. They voted to oust CEO Bernie Kornfeld from his own creation and replaced him with a 36-year-old businessman from New Jersey named Robert Vesco, who bailed out iOS with an emergency $5 million loan.
Vesco has brought a sense of stability to iOS. Investor confidence is his biggest problem. He still has to clean up the mess, the legacy of mismanagement and lavish spending left by Kornfeld and his associates.
What the board of directors did not realize was that Robert Vesco was a criminal whose own conglomerate was in deep financial trouble. While he pretended to be working on a cure for IOS's financial woes, Vesco secretly looted the company of its remaining worth, $224 million.
Robert Vesco fled to the Bahamas in 1973 with the money in his bank accounts, then to Costa Rica, and then to Cuba. He allegedly tried to return to the U.S. by donating $200,000 to Richard Nixon's re-election campaign, but the plan was snuffed out. Robert Vesco was eventually arrested in 1995, but that's another story for another day.
Back to Bernie. I feel that iOS was an unusual, even a beautiful company that was doing an extraordinary job in the financial field and that was destroyed by Vesco. And obviously, I can't have any kind feelings for anyone that did that kind of thing. But I
Investor Overseas Services never recovered. Its collapse took down a few European banks with it, and it almost took down Bernie Kornfeld. Bernie was arrested in Switzerland in May 1973. He was charged with defrauding 350 employees at a
out of $39.5 million for selling them stock while knowing the company was failing. He spent 11 months in jail before bailing out, time that Bernie described in a letter to friends as, "...not as unhappy as I would have expected. I'm alive. I'm well. I've lost some weight, trimmed my beard, and look great. I'm doing many of the things I wanted to do for the past two years." Bernie Kornfeld pleaded not guilty to the charges.
and was later acquitted after several affected employees testified at the trial that bernie had done nothing wrong this is a picture of bernard kornfeld he made millions of dollars selling mutual funds then his firm ios lost millions of dollars and kornfeld lost his firm he is no longer a tycoon he is living quietly in california and here he is the perfect picture of a ruined millionaire
The poor, ruined millionaire had to move out of his 80-room castle into a 40-room mansion in California. The Gray Hall Mansion, to be exact. Beverly Hills' second oldest residence. Other notable owners include Mark Hughes from Herbalife,
At Gray Hall, Bernie Kornfeld's party picked up right where it had left off. The rooms were filled with his favorite things: young women playing backgammon, while Bernie was in his office making overseas phone calls, trying to get back in the game. Overseas phone calls were expensive back in the day, so a more cost-conscious Bernie Kornfeld allegedly instituted the use of what's called a "blue box,"
Blue Box has allowed people to make free, illegal, long-distance phone calls by mimicking the same 2600 Hz switching tone to trick automated telecom systems. Over a four-month period, Bernie Kornfeld, his girlfriends, and his employees made 343 free overseas phone calls, ripping off Pacific Bell Telephone Company for more than $1,000.
The FBI raided Gray Hall Mansion in 1975 and recovered the blue boxes. Bernie Kornfeld was convicted of telephone fraud in 1976 and sentenced to three months in prison. He maintained his innocence and claimed he knew nothing about the blue box and that his secretaries had used it without his knowledge. Some of those secretaries had even testified at the trial that Bernie was telling the truth.
Other girlfriends testified that Bernie knew about the blue boxes the whole time. Vicki Morgan was one of those girlfriends. She had lived at Gray Hall during the summer of 1974. Vicki initially played dumb when questioned by the FBI but ultimately decided not to commit perjury. Vicki decided that she was too pretty for prison.
Besides, her relationship with Bernie ended on a sour note when she fled Greyhall in his Maserati, and he was more concerned about getting the car back than getting her back. So, fuck Bernie Kornfeld. He could rot in prison for all she cared. As for Vicki Morgan, she would go back to the waiting arms of Alfred Bloomingdale, her rich, old, loyal, and married sugar daddy, and she would be ruined forever.
A mistress's 12-year-long love affair with an heir to a department store fortune ends in violence and conspiracy on this episode of Swindled. ♪
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Diner's Club, the first card.
Even before being dubbed "Father of the Credit Card", Alfred Bloomingdale breezed through life like any other rich kid with a famous last name. Alfred was the grandson of one of the brothers who founded the Bloomingdale Department Store in New York City. But Alfred only briefly worked for the family business in the late 1930s after dropping out of Brown University where he reportedly studied football and female anatomy.
With a safety net strong enough to accommodate many magnitudes of risk, like many other children of wealth with similar privileges, Alfred Bloomingdale decided he was an artist. He became the youngest producer on Broadway at the time. Most of his productions were panned by the audience.
After World War II, Alfred Bloomingdale headed for the West Coast, where he reshaped his delusion and started working on the business side of show business. But he soon grew bored. Alfred then took a job as vice president of the Dine and Sign restaurant charge card, invented by a businessman in New York who had forgotten his wallet while eating out one time.
Alfred Bloomingdale spearheaded the dine and sign cards expansion to the West Coast when, in 1952, he was presented with the opportunity to buy the company outright. So he made that investment, took control, and expanded the company's vision beyond restaurants. Alfred renamed the company to Diner's Club, the world's first multi-purpose charge cart, and its popularity multiplied.
But believe it or not, Diners Club was not Alfred Bloomingdale's best idea. His best idea was to marry Betsy Newlink, who Alfred referred to as "Knitwit" lovingly, I think. Betsy Bloomingdale had no interest in business. Her only aspirations were social and nature. She was the best dressed at every party. Alfred Bloomingdale adopted his wife's lifestyle.
In short order, the once Jewish Democrat from New York metamorphosized into a California Republican. The couple moved to Bel Air, where Betsy Bloomingdale would eventually meet and become best friends with throat goat Nancy Reagan.
I'm sorry that's uncalled for. Even if the rumors were true that Nancy was known for giving the best blowjob on the MGM lot when she was an actress, that didn't necessarily mean it was by choice. She probably just wanted to get hired like anyone else. And back then, sucking some old smelly dick was usually part of the audition process. Still is in a lot of places.
Nancy's husband Ronald Reagan was wiping his mouth a lot when he was elected governor of California in 1966. The Bloomingdales were now very well connected. Unfortunately, soon after, Alfred Bloomingdale was looking for a new job.
By then, American Express had come onto the scene, followed by Visa and Master Charge. Diners Club was losing market share. Alfred Bloomingdale was bored with it anyway. In 1968, he resigned as chairman of the board and CEO. It already sold his ownership in the company. Alfred Bloomingdale's hands were clean, just in time to find a new passion that would consume the rest of his life. And no, we're not talking about international floatels, his floating hotel business.
This story has multiple versions, but here's the most widely accepted. Alfred Bloomingdale, in his early 50s, had a business meeting somewhere on Sunset Boulevard in LA when he spotted the most breathtaking young woman he had ever seen walking into the Old World Restaurant. Alfred followed her in. "Pardon me, do you play tennis?" he asked the tall, thin, blonde teenager.
The girl told Alfred that, no, she didn't play tennis. He continued on with some small talk about his wife. He mentioned that he was lonely, and he asked for the girl's phone number for the, uh, tennis. Right, of course.
Alfred Bloomingdale started calling the girl up to 20 times a day. Her name was Vicki Morgan. She was 17 years old. She was already married to a clothing wholesaler 30 years her senior. His name was Earl Lamb. He wore a hairpiece. Alfred Bloomingdale didn't care. He practically begged for a lunch date anyway.
Vicki Morgan had just moved to Los Angeles from Montclair, California, about 30 miles east. Vicki had dreams of becoming an actress, a model, or both, but so far she was having a tough go of it. She had met Earl working as a restaurant hostess. She needed him for security, but she wanted him because she had attachment issues and trauma. Up until that point in her life, every man Vicki had met had disappointed her.
starting with her father, who left the family high and dry when Vicky was about three. He sent a check every month, but she never saw him again. Luckily, Vicky's mother Connie met a wonderful man afterward who dropped dead from a heart attack when Vicky was nine. The worst part is that Vicky's stepdad was in the process of switching jobs and died during a window when his life insurance had lapsed. Vicky's mom had to return to work in a school cafeteria where she stayed for the next 17 years.
Then when Vicki was 16 years old, her high school boyfriend walked out on her when she got pregnant. Vicki dropped out and entered St. Anne's Maternity Home for Unwed Mothers, where they taught her how to operate a cash register.
Vicki Morgan gave birth to a son named Todd. She wanted more for him than Montclair could ever offer, so with baby Todd, Vicki moved to LA without ever looking back when the opportunity presented itself. A small town girl in the big city who had never even heard of the Bloomingdale Department Store.
Alfred Bloomingdale's name did not impress Vicki at all, but she gathered he was rich and persistent. After a thousand requests, Vicki agreed to meet with Alfred. They went back to the place where it all started, the Old World Cafe. Alfred had brought an older woman with him, not his wife apparently. It was an employee or something. That meeting felt almost like a job interview.
Apparently, Vicki Morgan had made a good impression because Alfred Bloomingdale wanted to see her again. Alfred arrived with a different woman this time. She looked like she was at least 30 years old. "Alfred wants you to know that he thinks you are very special," the unknown woman told Vicki as she helped her into the passenger side of a car. The woman, with Vicki in tow, followed Alfred's Mercedes. She continued the conversation.
Alfred has a real interest in you and I'm here to tell you that he's going to want to beat you when we get up to the house. He'll probably tie you up. He wants me to tell you this but he also wants me to let you know that you're special to him and he will make special allowances.
At the house, Alfred Bloomingdale instructed 17-year-old Vicki Morgan to sit on the couch. "Do you know what this is all about, Vicki?" he asked her. "I think you're a very special girl. I knew it the minute I saw you, and I want you to become my mistress."
Vicky reminded Alfred that she was married. "Don't worry about that," he told her before offering to solve the problem financially. "Just ask your husband what he wants, what it will take to get him to step out of the picture." "I'll take care of it," Alfred assured. "In fact, if you let me, I'll take care of everything for you from now on." "How about it? Let's you and me have some fun upstairs." Upstairs, two other women waited. They were seasoned pros.
Everyone in the room, including Vicki Morgan, was instructed to undress. "Get the apparatus ready," Alfred ordered, while tying multiple neckties together into a makeshift rope. Alfred Bloomingdale used that rope to tie up the two women, arms overhead, while Vicki sat on the bed and watched. Once the bindings were nice and tight, Alfred Bloomingdale started wailing on their backsides with his belt.
The two women screamed for mercy, partly because that's how he liked it, and it's what the script called for, and partly because it really fucking hurt. "Isn't this fun?" a maniacal Alfred Bloomingdale demanded to know.
Vicki Morgan later recalled that startling scene, quote,
Alfred pulled Vicky across his lap and spanked her bare bottom. Then he had sex with her and made her shower with him. He told her not to be scared. It's just a game, he said.
Alfred Bloomingdale played the game up to three times a week at that same house which Vicki Morgan soon deduced he rented for that sole purpose. Alfred had been extra careful since he was blackmailed by a pimp who had recorded his encounter through a two-way mirror back in the 50s. Alfred was far more comfortable if he was in control of the environment.
The rules of the game remained consistent, but the cast would change constantly. Alfred would beat his catch of the day like a wild animal, while Vicki Morgan looked on in horror. It was like Jekyll and Hyde, Vicki later said, comparing Alfred's behavior to something you'd see in a hospital or in a movie. It'd almost completely lose control. Quote, Okay, I mean, it drooled.
Vicki Morgan thought this man must be out of his gourd. A few months later, Vicki Morgan would be tied up right along with the other women and taking beatings of her own. And she kept coming back for more. Please stop saying that. That's Gordon Basikas. He wrote a book about Vicki Morgan. More on him later, but yeah, part of Vicki enjoyed the pain.
Alfred and Vicki's affair was in full bloom. He started giving her an allowance of up to $5,000 a month, which he hid through his company's payroll as interior decorating consulting work. Rumor has it that Alfred Bloomingdale paid off Vicki Morgan's husband for her freedom. At the very least, he threatened Earl Lamb's livelihood enough that he did not dare interfere.
Vicki Morgan moved out, and Alfred rented her a house not too far from the one he shared with Betsy and their children. Vicki was now driving a Mercedes. She had a full-time housekeeper and a private chef, mostly for companionship because Vicki Morgan hated being alone. Her son Todd was back living with Grandma in Montclair.
Vicki nearly had a second child in 1971. It was Alfred Bloomingdale's, but he didn't want it. He told her he was too old to start a second family, and it wasn't a good time to divorce his wife. He happily paid for Vicki's abortion, but did not bother to show. This was one of the first of many heartbreaks Vicki Morgan would endure throughout her affair with Alfred Bloomingdale. At some point, Vicki had genuinely fallen in love with the man, at least the closest thing to love that she had ever experienced.
Alfred Bloomingdale kept Vicki Morgan on a leash and a budget for years. He tried to help with her acting career, sent her to cooking school, bought her a dog. Vicki was Alfred's worst kept secret. He would even drop Vicki Morgan off at the same hair salon where his wife and Nancy Reagan were regulars.
Unsurprisingly, this lack of caution caused problems. One day, an excited Alfred Bloomingdale embraced Vicki Morgan on the street in public view without realizing that his wife's best friend, Nancy Reagan, was on the same block. She had witnessed everything. Again, this is the writer, Gordon Basikas. And here's Nancy aghast, apparently, because here is Alfred Bloomingdale, her good friend, jamming his tongue down the throat of this sweet young thing.
What is wrong with you? Anyway, there was also an incident where Betsy Bloomingdale and her daughter saw Alfred with his mistress in public.
Vicki was unbothered. She wasn't afraid of Betsy. In fact, Vicki kind of liked rubbing the relationship in her face. Women and that kind of money, if they're faced with it, if they walk in and I'm in her house in bed with her husband, what is she going to do? What was no secret was that Vicki Morgan wanted to marry Alfred Bloomingdale. She wanted him to stop playing his sadomasochistic sex games, and she wanted him to prove his commitment by buying her a house she could call her own.
Alfred Bloomingdale was open to it. He promised Vicky he would take care of her forever. They would shop around, but then there would always be some kind of falling out. They'd get caught and have to cool off for a while, or Alfred would have a health scare from his five-packs-a-day smoking habit.
Other times Vicky would get frustrated or bored, and they'd go their separate ways. Sometimes Vicky would go so far as to marry someone else, mostly to make Alfred jealous. And it would work. One time Alfred drove through the gate of her new lover's home with a folder detailing Vicky's expenses from the previous year. Another time he demanded reimbursement for a $10,000 freezer he bought for her rental home.
When Vicky told Alfred that she was getting married for a third time, he reportedly wept and offered her a million dollars not to go through with it. Vicky agreed. Alfred never paid. During the lulls of her affair with Alfred Bloomingdale, Vicky Morgan had brief relationships with the King of Morocco, a plastic surgeon, a heroin-addicted Saudi princess. At her lowest, Vicky was fucking the switchboard operator at her apartment building, as well as the former bookie that lived a few floors above her.
Most memorably, Vicki Morgan became one of financier Bernie Kornfeld's live-in girlfriends at Gray Hall, one of about 40. But no one could make Vicki feel as special as Alfred Bloomingdale did, so the cycle would repeat itself. Vicki Morgan would end up flat broke and desperate with a worsening drug habit. Alfred Bloomingdale would rescue her and remind her that she was too good to live like that, something Vicki Morgan already knew.
Or was she just delusional? Because she'd been living like that for nine years now. Living as the other woman. Banished to the shadows. Holding on to empty promises. Waiting for someday.
At 26 years old, Vicki Morgan checked into the mental health center at Cedars-Sinai Hospital in Beverly Hills to treat her drug abuse and depression. Alfred Bloomingdale paid for it. When Vicki got out, Alfred rented her another house and another Mercedes and started giving her an $18,000 monthly allowance. Alfred Bloomingdale was in a good mood. His buddy Ronald Reagan had just been elected president of the United States.
As a major donor and member of what they called Reagan's Kitchen Cabinet, which was a group of longtime supporters and unofficial advisors, Alford anticipated a major appointment in the administration.
The Bloomingdales went to Washington, D.C. Vicki Morgan was also in town for the inauguration, although she had to watch from afar. Unexpectedly, Alfred and Betsy's common interest in making 1980 America great again brought them closer together than they had been in years. Even though Betsy Bloomingdale's recent felony arrest for concealing two Christian Dior dresses from customs inspectors reportedly cost Alfred his much-desired seat in the administration. But the Bloomingdales did have a seat at the royal wedding in July 1981.
Vicki Morgan was left behind, but would have plenty of opportunity to spend quality time with Alfred when he returned. It was the beginning of the end. Alfred was diagnosed with terminal throat cancer. He had to have part of his esophagus removed, which was followed by major complications: kidney failure, ulcers, and loss of hearing and speech. Betsy Bloomingdale visited Alfred in the hospital when she could, but as the first friend of the First Lady, her calendar was quite full.
He told me that his wife was too occupied with her social life, her shopping, her lunches with designers and lady friends to give him the support he needed, Vicky later said. He said he wanted me to promise him that I would help get him well, no matter how long it took, and to supervise the nurses whom he said he did not trust. He said he was afraid of the nurses. On his deathbed, he's afraid of his wife, not me.
Vicki spent hours by Alfred Bloomingdale's bedside trying to make him comfortable. Sometimes she would dress as a nurse just in case Betsy bothered to pop in. Alfred and Vicki wrote notes back and forth all day. It was probably the most intimate they'd ever been at any point during their 12-year affair. It was quite nice, but eventually Alfred was released to spend his final days at home.
Vicki Morgan continued to visit Alfred because Betsy was always out of the house. However, one of the family's servants tipped off the wife that Alfred had a regular female visitor. Betsy was incensed, mostly because she found out that Vicki's Mercedes was newer than hers. Alfred wrote a note to Vicki. There's no point in trying to come over to see me. She's given orders that you're not to be allowed in.
and so the visit stopped but as the end grew nearer alfred bloomingdale convinced the nurse to take him to see vicky for lunch on wednesday june 16 1982 vicky morgan bought a new outfit and a one thousand dollar floral arrangement for the occasion she also hired a private chef even though alfred couldn't eat anything it was the thought that counted and when he arrived alfred bloomingdale needed assistance walking his caretaker set him down at vicky's table where he began to sob uncontrollably
The lunch was cut short as his nurses whisked him away. It was the last time Vicki Morgan and Alfred Bloomingdale would see each other. Support for Swindled comes from Rocket Money. Most Americans think they spend about $62 per month on subscriptions. That's very specific, but get this, the real number is closer to $300. That is literally thousands of dollars a year, half of which we've probably forgotten about.
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Alfred had told her for 12 years, I'm going to take care of you the rest of your life. I mean, he gave her thousands upon thousands upon thousands of dollars over the 12 years. Millions, probably. It was probably into the millions, if you calculate it right. And she had left? Nothing. She didn't want to be alone. She was petrified to be alone. I would say she was paranoid.
In June 1982, two months before Alfred Bloomingdale died, Vicki Morgan sued him for $5 million. It was a palimony lawsuit for compensation between an unmarried couple. Vicki wanted the lifetime support that Alfred had promised her. She had witnesses who had heard him make that promise.
As his constant companion, confidant, and business partner, the filing read, Vicki Morgan agreed to give up employment opportunities to instead devote her "time, efforts, and energies" to Alfred Bloomingdale. In her deposition for the case, among other things, Vicki claimed she basically acted as his sex therapist to help wean Alfred away from his S&M desires, which Vicki described in great detail and which everybody else would learn about when the filing became public.
Which never would have happened had the Bloomingdales settled the lawsuit out of court. But they didn't. With Alfred incapacitated with cancer, Betsy Bloomingdale had taken over the family finances and a few weeks after Vicki filed the Palamoni lawsuit, Alfred just happened to sign a new last will and testament, leaving most of his assets to a family trust. Vicki Morgan was not mentioned.
However, back on February 12th, 1982, while he was still in the hospital, Alfred Bloomingdale had put his lifelong promise to Vicki in writing, kind of. He wrote two letters, which he sent to a business associate. Both were submitted as evidence in Vicki's case. The first was an agreement to pay Vicki Morgan $10,000 a month for two years, for a total of $240,000.
Should my lawyers, business managers, heirs, or anyone else object to this agreement, this letter will serve as your authorization to follow through on the above. Signed, Alfred Bloomingdale The second letter transferred half of Alfred Bloomingdale's ownership interest in a pizza restaurant called Showbiz Pizza to Vicki Morgan, probably with the idea that it would provide Vicki with a future income stream. But the business was just starting, so there was no guarantee.
This is curious because, excluding his steak and showbiz pizza, Alfred Bloomingdale was worth an estimated $100 million and owned plenty of real estate. Why was Vicki Morgan's future dependent on a pizza franchise? We will never know. Alfred Bloomingdale died on August 23, 1982, before the case could be heard. He died alone at St. John's Hospital. His wife Betsy was at a dinner party. She found out when she returned home at 1 a.m.,
The next day, the multi-millionaire was buried in a $200 casket in a private ceremony. Within days, Vicki Morgan had found out which cemetery. She visited Alfred's grave to leave a lonesome rose and was shocked by what she found.
I went to the cemetery and I found there was not one flower on the grave except what I put there, she told the Los Angeles Herald-Examiner. When I saw that, I was shocked. I still am in a state of shock. That was, believe me, all done because of Vicki Morgan. She buried him, and excuse my expression, like a dog. This woman only thinks of one person, Vicki said, and I'm excluding her children, and it's Betsy, Betsy, Betsy.
The Palamoni lawsuit continued after Alford's death, but with a procedural change. The Bloomingdale estate was now the named defendant instead of Alford, and Vicki Morgan had amended the suit for an additional $5 million, alleging that Betsy had interfered with her contractual agreement with Alford by cutting off her $18,000 monthly allowance. The public and the media were sympathetic to the widow,
Vicki was upset with this perception. She blamed her lawyer, whom she called on the phone, asked for his astrological sign and then fired him. His replacement fared no better. Vicki Morgan's Palamoni case was dismissed on September 26, 1982. The judge said Alfred Bloomingdale's agreement to support his mistress for the rest of her life was "illegal" because it involved sex for hire and that he was just telling her what she wanted to hear to get what he wanted.
The judge described the relationship as quote, "no more than that of a wealthy older married paramour and a young well-paid mistress." The judge did, however, let stand the two counts of action outlined in the signed letters, the $10,000 a month for two years and the joint business PizzaVenture ownership. Unfortunately, a decision would not be made on those items anytime soon, so until then, Vicki Morgan was broke again.
She sold her jewelry and her Mercedes. She moved into a duplex in Studio City. She was driving a Jeep Cherokee. It was awful. Vicki also tried to sell some paintings Alfred had given her, only to discover they were worthless. It seemed like the old man kept screwing her from beyond the grave.
Vicki Morgan became angry, depressed, and full of self-pity. Completely bitter towards the world and only 30 years old. She got heavier into drugs and heavier into denial. Her white wine intake was tallied by the bottle, not the glass, and she was taken 10 to 15 volumes every day. All Vicki Morgan did was lay around her house feeling sorry for herself. She lost a ton of weight and stopped wearing makeup. She was too paranoid about her notoriety to show her face in a grocery store.
Lucky for Vicky, her mother, Connie, cared enough to visit often. Connie would clean Vicky's apartment, wash her dishes, empty her ashtrays, and help care for her teenage son, Todd. But Vicky's family wasn't always available. And notoriously, Vicky Morgan couldn't bear to be alone. She started spending more and more time with her friend Marvin, whom she'd met in a mental hospital a few years earlier when she'd tried to get sober. Vicky and I just sat in the corner and laughed at everybody else. Marvin reminisced.
Marvin Pankost has been described as a completely average, well-spoken, unflamboyant gay man who loved brushing shoulders with celebrities. Famously, one of Marvin's prized possessions was an address book filled with celebrity phone numbers, most of whom he had never met.
One famous face that Marvin Pankost did actually meet was Alfred Bloomingdale. Vicki would invite Marvin to tag along on trips with her and Alfred. Not only did Marvin make for a great beard for the affair and the presence of company, but he was also a willing participant in Alfred's game, which had evolved into dressing Marvin up in diapers and spanking him. Marvin Pankost had been in and out of mental health facilities for most of his adult life,
He had been diagnosed with multiple serious disorders, including chronic schizophrenia. There was also a conflicting diagnosis that Marvin was HIV positive. Marvin told the doctor that if he didn't have it, he wished that he did.
Marvin Pankost was a masochist. This might explain why he decided to move into Vicki Morgan's duplex in the summer of '83. Marvin had just lost his job at the William Morris Agency and didn't want to move back in with his mother. Vicki was still reeling from Alfred's death and losing her palimony suit, and she had an extra room at the duplex. Misery loves company.
and living with Vicki Morgan was misery, Marvin Pankost quickly found out. Pure hell, he would later describe it. "She never did anything. The only time she moved was when she was manipulating somebody, and usually she was manipulating Marvin Pankost. He became Vicki Morgan's unpaid gopher, or as he called it, 'little slave.' Marvin cooked and cleaned for her, brushed her hair, painted her toenails, and massaged her back and feet.
He also let the "Queen of Sheba" borrow a Ford Mustang that he leased and within days she had gotten drunk and totaled it. Vicki Morgan was exasperating, but it was Vicki's relationship with the writer that truly sent Marvin Pankost over the edge. Vicki claimed she had learned a lot of dirt about the Reagan administration from Alfred Bloomingdale and had been threatening to write a book. She claimed it would be so explosive that it might quote "bring down the government."
Yet Vicki had difficulty selling the idea without a sample, so she was put in touch with an unaccomplished freelance scriptwriter named Gordon Basikas, who had a fondness for sweet young things.
More importantly, Basikas agreed to romanticize Vicki Morgan's story as she wanted it to be. The author and subject agreed to split the future profits 50/50. Gordon Basikas and Vicki Morgan recorded hours of conversation in preparation for writing the book. Within five weeks, they were sleeping together.
Eight months later, not a single word of Vicki's book had been written, but Gordon proved his worth in other ways like buying her groceries and paying her bills. Still, with no income, Vicki Morgan's financial situation grew more desperate by the day. She was months behind on her duplex rent and was scheduled to be evicted on July 7th, 1983, which was only a few weeks away.
Vicki Morgan did not want to move back home with her mother and Montclair, even though she did not have many other options. She floated the idea of moving in with Gordon Basickas, but he didn't think it was a good idea since he had a wife and a newborn baby at home. A week later, Vicki Morgan wouldn't have even considered it. On Thursday, June 30th, 1983, Gordon Basickas excitedly presented the first draft of the first chapter of Vicki's book. He became incensed when Vicki Morgan hadn't bothered to read it.
Allegedly, their argument turned physical and Gordon forcefully set Vicky down on the couch by grabbing her forearms. She also had a bruise under her eye. Vicky kicked Gordon Basickas out of her house. She never wanted to see him again. Fortunately, Marvin Pankos came to the rescue. He offered to take care of Vicky and Todd if needed. Vicky and Marvin even joked about getting married so she could be on his health insurance too. Marvin wasn't laughing.
Now, Marvin Pankos didn't have a job or any other income per se, but he did secure a $3,500 loan from his grandma to help him find a new place. So Marvin went apartment hunting for him and Vicky, who couldn't muster the energy to get out of bed and join him.
The lack of urgency was concerning. It was July 5th. Vicky's stuff had to be out of the duplex in 24 hours. Marvin signed a lease for the most affordable and immediately available place he could find. It was a one-bedroom condo in Burbank. He returned to the duplex to share the news. Vicky Morgan wasn't thrilled. Burbank? You mean the boondocks? The middle of nowhere? Living in Burbank was beneath Vicky Morgan.
Marvin Pankost was losing his patience, and his goodwill was tested even further later that evening when Gordon Basica slid back into Vicki Morgan's good graces. Gordon came over around 10:30 that night. He and Vicki sat on the couch, discussing their differences, drinking wine and snorting coke. They could hear Marvin Pankost pacing around in the upstairs bedroom directly above them for hours. "You need to give Marvin a break," Gordon advised her.
The next morning, Marvin Pankost went downstairs. Gordon Basikas and Vicki Morgan were still awake on the couch. "Go out and get some breakfast things for us," Vicki instructed Marvin. "And we need coffee too." When Marvin returned with the requested goods, Vicki scolded him for buying the wrong brand. "Gordon likes chock full of nuts. You should have got that."
After eating the bagels, Marvin Pankost said Gordon and Vicky went upstairs to bed. "They went up and she's fucking the rider. They fucked until about 10 and then slept until 2. Her mother and friends showed up, helped pack, but she wouldn't get out of bed. She didn't want to deal with anything." The countdown to eviction was less than 20 hours. When Vicky's mom and friend arrived to help pack, something was obviously bothering Marvin Pankost.
"You go home," Connie told him. "This is not your responsibility. We'll handle things here." "No, I'm staying. I'm going to settle this today with Vicky once and for all," Marvin responded. "Good," Connie said. "I hope you do."
Around 2 p.m., July 6, 1983, the rekindled lovers came downstairs. Vicki had Gordon drive her to check out the condo in Burbank that Marvin had picked out. The writer dropped her back off at the duplex about 45 minutes later. Vicki immediately vocalized her disdain for the property and proclaimed that she wasn't sure what she was going to do.
Around 9:00 p.m., Vicky's mother, her mother's friend, and her son Todd had all left the duplex for the night. Marvin Pankost and Vicky Morgan were the only ones remaining in the house besides Katie, Vicky's Doberman. One of Marvin Pankost's daily chores was to walk Katie. On this evening, Vicky joined him, where she again expressed her displeasure with the Burbank condo. She told him she might rather put her stuff in storage and stay with her mom for a while.
Marvin said Vicki Morgan complained and waffled like this the rest of the night. She reminisced about Alfred Bloomingdale and how often he made her worries disappear. Marvin Pankos just wished she would shut up. He wanted to go to sleep because he had to wake up incredibly early to retrieve the check from his grandmother so that he and Vicki could continue to have a roof over their heads. Marvin had invited Vicki to join him to show some appreciation, but Vicki said she'd rather sleep.
And now her constant yammering was keeping Marvin awake. He tried massaging her feet to calm her down, but that didn't work. "I want to listen to music," Vicki announced. She demanded Marvin go downstairs to retrieve her Michael Jackson cassette, and he did.
Marvin pressed play and lay in bed next to Vicky Morgan. He pretended to doze off to the music, hoping Vicky would do the same. Instead, Marvin could feel Vicky's body jerk to the beat and she would start giggling. Marvin became fed up and threatened to leave, but Vicky begged him to stay. After that, Marvin said Vicky Morgan gave up on sleep. She sat up in her bed and started chain smoking, performing her trademark act of snubbing out her cigarettes and half-chewed pieces of gum.
Marvin Pankos couldn't take it anymore. He left the room and went downstairs to the kitchen. He sat at the table and ruminated for an hour and 45 minutes, later telling the Los Angeles Herald-Examiner that this was when he got the idea.
He was going to kill Vicki Morgan. She wanted to be dead anyway, Marvin claimed. Vicki had written some suicide notes in the past and even attempted it on one occasion by ingesting too many pills. Most assumed that instance was for attention since she knew someone would find her before it was too late.
So, Marvin Pankost figured he would do Vicky the favor, since she was too cowardly. He thought about strangling her. He pulled the belt out of his bathrobe and pulled at Todd. Yeah, that should do the trick. Wait, Marvin Pankost stopped himself. What about Todd's baseball bat?
Marvin remembered it was in the back of his car. He went outside to fetch it, returned inside and climbed the stairs. He walked into the hallway bathroom and turned the faucets on full blast to cover the noise. Marvin said he waited until the light in Vicky's bedroom was just right so he could sneak in unnoticed. It was almost 3 a.m.
Vicki Morgan was lying on her back, but she was still awake, experts say, because when Martin Pankos landed that first forceful swing of the bat into her skull, she sat straight up screaming and used her arms to block her face.
Thud. Thud. Thud. Marvin Pankos landed at least six additional blows. He kept hitting until Vicki Morgan stopped moving, until she stopped talking, and then he laid the bat across her body and went downstairs. He grabbed his pack of cigarettes, put them in the pocket of his windbreaker, climbed into his car, and drove to the North Hollywood Police Station.
Los Angeles police said today that Vicki Morgan, the former model who sued millionaire Alfred Bloomingdale for palimony, was beaten to death with a baseball bat this morning. Police said 33-year-old Marvin Pankost was arrested in connection with that killing after he turned himself in. Pankost, who is said to have lived with Miss Morgan, allegedly told police they had a fight last night.
The 31-year-old Ms. Morgan filed a $10 million palimony suit against Mr. Bloomingdale last summer. He died later. Parts of that lawsuit were dismissed, but other legal claims are still pending. Marvin Pankos walked into the police station at 3.20 a.m. on July 7, 1983. I just killed someone, he told the lieutenant on duty. She's at 4171 Colfax Avenue, apartment D. I left the door open, but look out for the Doberman.
Officers arrived at that address to find the door unlocked, just as the man had described. Inside there were boxes everywhere, looked like someone was getting ready to move. With their flashlights leading the way, the police slowly made their way to the upstairs bedroom. They flipped on the light switch and found a woman's body. She was wearing a yellow t-shirt, blue underwear, and red toenail polish. She was still warm but had no pulse.
It looked like the entire right side of her skull had been bashed in. Her arms and hands were battered and broken from a typical defense response. There was blood splattered on the wall. A de Doberman curled up next to her owner's bedside. Not aggressive at all. Back at the station, Marvin Pankos provided a taped confession. "'I just couldn't take it anymore,' he told detectives. "'So I hit her enough times on the head so that she would go to sleep.'"
Pankost made sure to let them know who Vicki Morgan was, how she had been Alfred Bloomingdale's mistress, how she had sued him. It was in the news.
Pankos also spoke about how Vicky bossed him around, how she quote "needled and manipulated him for the entirety of the three weeks he lived at her duplex," how she was too quote "coked out, valumed out, alcoholic-ed out to do anything for herself." Pankos also complained they had been paying for everything and kept on giving her moral support and believing in her when other people didn't and didn't care anymore, Pankos said. "They called me a hanger-on, but it was Vicky who was hanging on to me.
Marvin Pankow shared plenty more details, some conflicting, about what led to the murder and jailhouse interviews with seemingly every media outlet that asked. "'I expect to die in the gas chamber,' he told the Herald-Examiner. There was no doubt in his mind. "'Well, that was easy. It appears to be an open-and-shut case. Great. Let's all go home. Not so fast.'" Four days after the murder, the same day Vicki Morgan was buried, there was a massive discovery.
Steinberg said the tapes, quote, are things of high risk to the national security of the country. He added, there are elected officials in the government who are videotaped. It's the kind of thing this country doesn't need right now.
Steinberg said, "It reaches all the way to the head of the country." There were tapes, according to this man. It looked to me like I was taking a home film or the old-time stag film in the frat. It was a very amateurish photographic type of thing. Robert K. Steinberg, a 46-year-old widely respected criminal defense lawyer who had never met Vicki Morgan.
However, he told a pack of reporters he had gathered that two days after Vicky's murder, a blonde mystery woman walked into his office with a Gucci bag full of Betamax video cassettes. Steinberg said the woman told him that what was in the bag would help Marvin Pankos' defense. "I didn't get more than 40 words out of her," recalled the lawyer. "She did very little talking. It was take it or leave it. These are yours now. Use them or don't use them. If you don't, I'll go somewhere else." Robert K. Steinberg accepted the tapes and watched them.
And what did he see? 40 minutes of black and white amateur shot footage of a group of people engaging in what appears to be playful sadomasochistic sexual activities. For example, in one scene, an unidentified dominatrix is pinning carnations to the pubic hairs of several men. Who are these men? Well, one of them was clearly Alfred Bloomingdale. His frame was unmistakable.
The others, according to Robert Steinberg, were unnamed Reagan administration officials and executives of the construction and oil and gas industries. There were half as many women in the videos. One of them was definitely Vicki Morgan.
Steinberg said he had only shown the tape to two other people. He said he didn't want to name names because he didn't find the footage relevant to his client Marvin Pankos' case in any way. He assumed the videos were surfacing only to embarrass and humiliate, and Steinberg felt that that's not what the country needed at the present time. "I am calling the president tomorrow," Steinberg told the press. "If he wants to look at these tapes for whatever reason, I will deliver them to him. Otherwise, they will be destroyed."
Robert K. Steinberg tried to answer every question that came his way over the next several hours, but holes were emerging in his story. The lawyer took offense at his credibility being questioned. Quote, I've been in Vietnam for four years, I was a prosecutor eight years, and I've killed people.
Two days later, around 8:30 a.m., the Los Angeles County District Attorney's Office instructed Robert Steinberg to preserve the tapes as potential evidence and not destroy them. Someone would be by later to pick them up. A few hours later, Robert K. Steinberg called them back.
Yeah, you know those sex tapes you wanted to borrow? I hate to tell you this, but they were stolen. Someone from the press corps went into my library this morning and removed those tapes. How do you know that, sir? We know which one of the two it was, and it's under investigation right now. Robert Steinberg claims he was planning to play racquetball that day, so he just threw everything, including the tapes, into his gym bag.
He said when he got to his office, he got worried that someone would steal the bag from the trunk of his car, so he went back outside to retrieve it. Steinberg says he brought the bag inside and left it in his law library, where some reporters later gathered. One of them walked off with it. Steinberg said he knew which one it was, too.
This story fell apart quickly. The parking lot attendants at Steinberg's law office never saw him come back outside to retrieve a bag that day. Reporters were in the law library that day, but none recalled seeing a bag. Robert K. Steinberg's trustworthiness took another hit when the publisher of Hustler magazine, Larry Flint, came forward with the claim that he had a $1 million deal in place to buy the tapes from the lawyer, but Steinberg never showed up to the meeting.
Robert Steinberg responded by claiming he had never spoken to Larry Flint. After reporters did more digging and found blatant falsehoods on Robert K. Steinberg's resume, a narrative emerged that the tapes probably did not exist, and that the entire thing was a hoax, a ruse, by Robert Steinberg to weasel his way into the defense attorney role in a high-profile murder case.
Despite Steinberg's previous claims that he represented Marvin Pankost, that also was patently untrue, according to Arthur Behrens, Marvin Pankost's actual defense attorney.
However, Marvin Pankost claimed what Robert Steinberg was saying about the sex tapes was true. They do exist, Marvin confirmed. Vicki Morgan herself had shown them to him. It was why she was paranoid all the time, he said. That's probably why someone had her killed, Pankost claimed. I didn't kill her.
Marvin Pankost recounted his confession. He said he woke up next to Vicky's dead body. He said he could smell something sweet, like he had been knocked out with chloroform. Marvin said he crawled out of the bloody bed around 3 a.m. when he was hungry. So he started driving to get a hamburger and somehow ended up at the police station confessing to a murder. It was just one of those days. Petrified of the administration. Petrified of...
One particular gentleman in the administration, not the president. On August 13th, 1983, Marvin Pankos pleaded not guilty to first-degree murder and not guilty by reason of insanity.
At the trial, the defense would argue that Pancoast was a victim of a conspiracy. A conspiracy to suppress a book in which Vicki Morgan would expose the embarrassing sexual habits of some government officials. A conspiracy to smother embarrassing videotapes that could ruin careers and families. As a result, Vicki Morgan lived in constant fear, and it was justified.
To support this theory, Marvin Pankos' lawyers pointed out the botched murder investigation. The baseball bat was sealed in a plastic bag instead of a paper one. The resulting humidity destroyed all fingerprint, hair, and blood evidence. The blood tests that were performed weeks after the murder were almost certainly worthless. There was no presence of Valium or cocaine in Vicky's blood, despite multiple eyewitnesses saying that there definitely should have been.
Furthermore, the crime scene had not been sealed. The front door was left unlocked. Drawers were opened. Boxes were dumped on the floor. Reason enough to believe that someone may have rifled through the duplex unattended. If it's not an inept police investigation, then it's a deliberate cover-up, Marvin Pankos' attorney claimed. But what about his taped confession? Full of factual inaccuracies, the defense said.
This mentally ill man was a habitual confessor. Marvin Pankost tried taking credit for the Manson family murders after they had already been solved, and Pankost has since admitted to shooting Marvin Gaye, even though he was already behind bars for another murder that he did not do. Someone else killed Vicki Morgan, Arthur Behrens told the court. Marvin Pankost loved her.
So, who killed Vicki Morgan if it wasn't Marvin Pankost? Was it the FBI? Was it the Mafia? Something like that, the defense assumed. Unfortunately for their case, the sex tape testimony had been disallowed. The tapes were never found. Robert K. Steinberg pleaded the fifth on every question at the trial. He was later slapped with a misdemeanor criminal contempt charge for refusing to answer or provide the tapes.
According to the defense, there was also another suspect, Gordon Basikas, the writer who had a recent falling out with Vicki Morgan over a failing book deal.
Basikas was also well-versed in the art of hypnotism, the defense claimed. Perhaps Marvin Pankost had been hypnotized into confessing. Maybe not. Gordon Basikas had an alibi. He was at home that night watching the Major League Baseball All-Star Game with his wife. The American League won 13-3.
and Marvin Pankost was found guilty of first-degree murder on July 6, 1984. The same jury would appear at a second hearing at the end of July, where they determined that Pankost was indeed sane at the time. Marvin Pankost broke down crying when he heard the decision. The 34-year-old was later sentenced to 26 years to life in prison.
A few months later, a jury ruled that the letters signed by Alfred Bloomingdale to transfer funds to Vicki Morgan were indeed enforceable contracts. Unfortunately, the ownership in Showbiz Pizza was worthless, so Vicki Morgan's estate was awarded only $200,000. Her son Todd received the money. Don't worry, Betsy Bloomingdale got by just fine without that $200,000. She died in 2016 at 93 years old.
Marvin Pankos died in a prison hospital 15 years earlier, in 1991, at the age of 42. Complications from AIDS, just like he had wanted. Let's just say there were plenty of times when Vicki and I discussed how it might end. Marvin Pankos said in an interview with authors Joyce Milton and Anne Louise Bardock for the book Vicki, but she always said if it happened, it would have to be in a way that would do credit to Alfred. Do credit to him? How? The authors asked.
By getting a lot of publicity, she wanted to make Betsy squirm.
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