Adashing, highly successful Wall Street financier is murdered just days before he is due to complete an acrimonious divorce from his wife. The wife inherits almost everything and soon marries her boyfriend, an electrician who has served several jail terms and has stated publicly that he is a target of the murder investigation. Less than two years later, the wife dies of cancer -- and now a battle is brewing over her will.
As the saying goes, you just can't make this stuff up.
Almost two years after the murder of R. Theodore Ammon, the crime has yet to be solved. It is an incredibly sordid, complex saga. But just as murky are the financial questions left in the wake of the killing of Ammon, a 52-year-old former Kohlberg Kravis Roberts & Co. partner and chairman of Jazz at Lincoln Center. How, for example, did Ammon's assets -- worth an estimated $200 million at the peak of his career -- dwindle to $34 million by the time his estranged wife, Generosa Ammon Pelosi died? What has happened to the Ammon Foundation, the charity that has been virtually inactive since its founder's death? And what about the lawyers who will now exercise almost unfettered control over both the foundation and the trusts established for Ammon's 13-year-old twins?
In an exhaustive review, BusinessWeek has managed to account for Ammon's missing millions, most of which disappeared in the tech stock collapse of 2000. But the investigation amplifies questions raised by Ammon's friends over whether the remaining millions will be used as he intended. Under the wills of Ammon and his wife, the foundation is due to receive about $40 million now that Generosa has died.
Some friends of Ammon are surprised at the central role his wife created for her two lawyers, Michael G. Dowd and Gerard J. Sweeney. Both Dowd and Sweeney began representing her just after the murder. Despite the brevity of this relationship, Generosa's deathbed will names the lawyers executors of her estate and trustees for the Ammon children, a son and daughter adopted from the Ukraine. The will also names Dowd and Sweeney sole trustees of the Ammon Foundation.
These multiple roles create the potential for a rich stream of fees for the two lawyers. Usually, a will names one executor who collects a standard commission -- about $1 million on an estate the size of Generosa's -- estates experts say. Yet both Dowd and Sweeney are named executors, and Dowd confirms that each will collect a one-time commission of as much as $1 million. That arrangement is legal, but it has raised eyebrows. "It seems a bit unusual," says R. Edward Townsend, a Manhattan estate attorney.
As trustees for the $15 million Generosa left to the twins, the lawyers can also legally collect 1% of the estate's income each year, plus 1% of the principal every time a distribution is made to the twins. Those sizable fees would last until the children are 50 years old -- a provision Generosa insisted upon, according to a source familiar with the will. Says Dowd: "I would guess we would both be collecting commissions [as executors]. I don't know if we are both collecting fees as trustees." Sweeney would not comment on the record. Dowd and Sweeney could also earn annual fees as trustees of the Ammon Foundation.
Daniel Pelosi, the electrician whom Generosa married after Ammon's death, is challenging his estranged wife's will. He received $2 million under a post-nuptial agreement but was not named in the will. His estates attorney, James Spiess, claims Dowd and Sweeney "exerted undue influence on [Generosa] when she was on her deathbed" and that her signature on the will is illegible. Dowd vehemently denies this and says cancer had crippled his client's right hand.
Sweeney and Dowd are somewhat controversial figures themselves. Dowd, a Manhattan attorney who has represented several women accused of murdering their husbands, had his law license suspended for four years in 1990 after he confessed to doling out kickbacks to Queens (N.Y.) politicians in a scheme involving the Parking Violations Bureau. The scandal implicated Queens Borough President Donald Manes, who subsequently committed suicide.
Sweeney has been a legal bigwig for the Queens Democratic Party since the 1980s. For years he has been allowed, by court mandate, to collect fees from the estates of all Queens County residents who die without a will or survivors. While legal, it's a job for which he has been widely criticized. "Sweeney makes about a million a year from doing this -- despite being in private practice as well," says a Queens lawyer who asked not to be identified.
The Ted Ammon murder could be this century's Stanford White tale. On Oct. 22, 2001, the handsome, athletic Ammon was found naked and bludgeoned to death in his $10 million ivy-covered East Hampton manse. Among the 1,000 or so mourners at his funeral were such powerful Wall Streeters as KKR Chairman Henry R. Kravis; Apollo Management's Leon Black; investor and former Deputy Treasury Secretary Roger Altman; and Quadrangle Group head Steve Rattner. "Ted, even by Wall Street standards, was an exceedingly skillful and talented businessman," says Altman. "But more than that, he was a golden boy, the most attractive person you ever met -- out of a Fitzgerald novel."
Although never a legend, Ammon was a prosperous and energetic presence on Wall Street in the heady '80s and '90s. He joined KKR in 1983 and worked on the firm's signature deal, the 1988 RJR Nabisco takeover. In 1990, he testified against junk-bond king Michael R. Milken on KKR's behalf.
Ammon was only the second partner ever to depart KKR voluntarily, cashing out in 1992 at age 42 for an estimated $50 million. Shortly after, he founded Big Flower Press, now called Vertis Inc., a highly profitable company that printed newspaper circulars. He later started a private-equity firm, Chancery Lane Capital, to fund other ventures.
Ammon also started giving money away. In 1988, he created the Ammon Foundation, naming Generosa as co-trustee. He donated more than $1 million to Jazz at Lincoln Center and almost $15 million for scholarships at alma mater Bucknell University, the school's largest gift ever. "Ted didn't want his name on any building. He was incredibly selfless," says Bucknell President Steffen H. Rogers.
Some of Ammon's friends say they were perplexed as to why he was married to someone like Generosa, who could be "difficult even in the best of times," says one. They married in 1986. In later years, Generosa became more and more demanding. Convinced he was having affairs, in 1999 she demanded that he move with the family to Coverwood, a $6 million estate Ammon had bought in Surrey, England, say friends. "Ted gave in to Generosa until he couldn't take it anymore," says a friend. Once the couple separated, she had him followed by a private investigator, friends say, and began dictating his time with the children.
Some months before Ammon's untimely death, Generosa had taken up with Pelosi, an electrical contractor she had hired to supervise the renovation of an $8 million Upper East Side townhouse. More "dems and dose" than debonair, Pelosi had been arrested numerous times over the years on felony and assault charges and served three jail terms for drunk driving. Pelosi had installed the video-surveillance system in the Ammons' East Hampton house -- equipment that was shut off the day of the murder. Pelosi's criminal defense lawyer, former John Gotti defender Gerald L. Shargel, would not comment on the murder investigation.
After the murder, Generosa and Pelosi wed and immediately moved, with the twins, to Surrey. The family was soon forced to return to the U.S. so Pelosi could serve jail time on Long Island for drunk driving. In the spring of 2002, Generosa learned she had cancer. She died on Aug. 22, 2003. Days later, Pelosi was pictured in the New York Post with Generosa next to him at the bar at the Stanhope Hotel -- that is, her ashes in a box. He had ordered their favorite drinks, lit a cigarette in her honor, and summoned a photographer. Generosa and Pelosi had been living separately for months prior to her death, say her lawyers.
There's no question that Ammon's estimated $200 million fortune dwindled considerably -- perhaps by half -- after the NASDAQ crash in March, 2000. Ammon invested in numerous Internet startups in the late '90s. For instance, he held major stakes in Cais Internet Inc., which went bankrupt in October 2001, and 24/7 Real Media Inc. (TFSM), an Internet advertising company.
Ammon's estate, according to an inventory filed with the New York State Surrogates Court, was valued at $97 million gross shortly after his death. The document, compiled by his executors, J.P. Morgan Chase & Co. (JPM), details Ammon's assets down to the last penny. He owned a collection of wines valued at around $154,000, a membership in the Hamptons' Atlantic Golf Club worth $175,000, and an Aston Martin, a Porsche Carrera, and a BMW.
But Ammon's estate had to repay $31.5 million to J.P. Morgan, mostly for a loan that funded his private-equity business. He had charitable pledges and estates fees totaling some $9 million, according to J.P. Morgan sources. Half of his remaining fortune passed to the Ammon Foundation. Although Ammon held $40 million in life insurance policies, none of that money passed to Generosa. More than half belongs to the children and the rest to Chancery Lane Capital.
Generosa was convinced Ammon had been hiding millions from her because of the divorce, say friends. And J.P. Morgan Chase initially took the unusual step of challenging her status as co-executor of the estate after the murder.
J.P. Morgan eventually gave in, deciding "it was ultimately up to the courts to decide whether [Generosa] was fit to administer the estate," says a source within the bank.
Generosa sold off at least $40 million in real estate holdings in less than a year -- some at a loss. She unloaded Ammon's $26 million interest in printing company Moore Corp. (now Moore Wallace Inc. (MWI)), according to Securities & Exchange Commission documents, and auctioned artwork -- including an $85,000 Alexander Calder sculpture -- for a total of at least $2 million.
An orphan who grew up with relatives and in foster homes, Generosa had no family to turn to when she learned she had cancer. So she appointed her housekeeper as the twins' guardian -- a move that has been challenged by Ammon's sister. The court recently appointed lawyers to look out for the children's share of the estate.
The twins' lawyers would not comment on the record. But estates experts say their mother's will -- signed on July 22, a month before her death -- is ripe for challenge. Says William P. LaPiana, a wills, trusts, and estates professor at New York Law School: "This is shaping up to be a classic will contest. The children's lawyers could argue, for instance, that a bank would be a more objective trustee" than Dowd and Sweeney.
Pelosi's lawyers are also poring over the will. If it is invalidated, her prior will would be enforced -- and that left almost her entire estate to Pelosi. Meanwhile, Pelosi was recently charged with second-degree grand larceny for stealing electricity by rewiring his Long Island home. Shargel says Pelosi has pleaded not guilty.
After the World Trade Center disaster and just before his death, Ammon made a pledge to the nascent Twin Towers "Tribute in Light" project. A source close to Ammon doubts the pledge was fulfilled. A project spokesman was unable to verify the gift by press time. "Generosa seemed almost averse to giving money away," says a family friend.
The Ammon Foundation appears to have been dormant since the murder. It has not filed any Form 990s, the tax return nonprofits must complete for the Internal Revenue Service, according to the Foundation Center, a private foundation researcher. In the last return available, for the year ended on Nov. 30, 2000, the foundation received about $1.7 million in contributions from Ammon and gave out $1.35 million, primarily to Jazz at Lincoln Center, leaving it with $450,000 in assets.
The foundation is now set to receive about $15 million from Generosa's estate and $25 million from a trust, established by Ammon, upon Generosa's death. A source close to the case says Dowd and Sweeney plan to preserve the foundation's assets as much as possible until the children take over as trustees at age 25. "It's too early to talk about plans for the foundation," says Dowd.
Dowd has his hands full. He was recently forced to testify in front of a Long Island grand jury about the laptop computer that was used to gain access to the security system at the Hamptons house the weekend of Ammon's murder. Dowd admits the laptop ended up in his firm's possession after the murder but says it "was burned in a fire."
Ammon's friends are concerned about the fight over his estate. "You hate to see so much of what Ted worked for be tangled up with these lawyers and potentially even go to a murder suspect," says one. "It's tragic."
If Ted Ammon were alive, he would likely be using much of his fortune to better the world, say friends. These days, his money doesn't seem to be doing much good at all.
Corrections and Clarifications
The Ammon twins will inherit approximately $15 million, according to Generosa Ammon Pelosi's July, 2003, will -- not $25 million, as reported in "A murder mystery, a money mess" (Finance, Oct. 20).
By Marcia Vickers