AMERICAN HEARTLAND---May 27, 2005—What does one call a man who has spent the greater part of his life luring people to invest in schemes that never work out? More charitable people might say that Karl was a dreamer or a Walter Mitty type.
Some might call him a grifter, others might call him a hustler and still others, a con man. Regardless, the one thing that Americans cannot afford to call him is President. It would not be a change for the better. Very much like the current President, Karl Wilhelm Schwarz hasn’t had a successful business. His dreams and stories have always outstripped his realities. Unlike Dubya, Karl did not use those dreams cynically. He believed that he could make his dreams into reality.
At least, it appears that he did in the beginning. Karl Wilhelm Schwarz, also known as Bill Schwarz, also known more recently as Karl W.B. Schwarz, was born on May 1, 1951, to a blue collar family in Arkansas. His father, Norris Schwarz, abandoned Karl and his two siblings, Robert and Viki, when Karl was only 9. For weeks, the slight, blue-eyed boy sat on his porch waiting for his dad to come home.
His mother, Robbie, with the help of his grandmother, raised the three kids by herself. Much like her son, Robbie was a dreamer. She dreamed of instant riches, compulsively gambling and squandering the family’s meager assets. Furtively borrowing from her mother’s savings earned in the local sewing factory, Robbie managed to stay just ahead of her creditors. Finally, Robbie remarried and the family had stability for a while.
Robbie’s new husband was James Dickson. They would have a child together, James Jr. Karl was close to his stepfather and supported him through legal troubles that incarcerated Jim Dickson when Karl was a young man.
Exceptionally bright, and gifted with a near photographic memory, Karl learned quickly. He attended the University of Arkansas at Fayetteville for three years, but did not graduate. Instead, anxious to get out and make money, Karl took an exam that gave him an architecture license without a diploma.
The state architect licensing board reported that: “Karl Wilhelm Schwarz was licensed as an architect in Arkansas on February 22, 1982. His license to practice in Arkansas was revoked due to failure to renew his registration July 31, 1985. He would not be eligible to become licensed in Arkansas as an architect because Arkansas now requires a five (5) year degree in architecture.”
With his architecture license as an entrée, Karl associated himself with three other men of the firm, Turner, Dyer and Alessi. He quickly came up with a scheme to build a “slack water harbor” in Helena, Arkansas. For those unfamiliar with this term, “slackwater” harbors are large ditches dug from deep rivers to a specific point inland. The idea is to give a city without a seaport, access to over water transportation. While this might have been a great idea in the days of the mighty riverboats, it hasn’t been the big industry or tourist attraction it often is sold as.
Convinced that his idea would create a tourist attraction, generate new industry and lots of cash for everyone, Karl raised money from everybody that he knew and from anybody that anyone else knew. Relentlessly charming and industrious, Karl persuaded his sister’s husband’s father’s friends to invest. Member of large Italian families from New York, those friends of inlaws gave Karl about $300,000. One hundred thousand came from local affluent families; about $200,000 came in from friends, and a trusting banker at the Worthen Bank lent Karl around $100,000. The money went quickly. $90,000 on a feasibility study, a salary for Karl, options on land that might be profitably developed, offices and entertainment of clients.
Even the Arkansas Times ran a story in 1983 on Karl and his amazing plan.
For a couple of years, things looked rosy mostly because ignorance can be bliss. Secretive by nature, Karl managed to keep his investors from discovering the disarray in the project. By 1985, it was clear that the harbor wasn’t happening. The Worthen bank called their note.
Typical of traditional Southerners, this had been a handshake deal. When the trusting, elderly banker learned that the loan couldn’t be repaid, his heart seized. He died. Others were ruined. They lost their savings, investment properties and their homes. Some interviewees asked that their names not be mentioned either because remembering the deal’s repercussions was too painful or because remembering how a friend fleeced them cut too deeply for words.
Within his personal life, Karl was as secretive and chaotic as his business. Married young to Lois Love, by 1985, they had a young son, Ryan who was the apple of his mother’s eye. Lois had problems conceiving because of her anorexia-bulimia. When she controlled her need to purge enough to be able to conceive, she was overjoyed. While Lois reveled in motherhood, Karl was frequently gone. At first, he was out working investors in the slackwater harbor. Then he took up hunting or at least that is what he told Lois although he seldom brought home any game. Finally, it became clear that something else was going on. Karl was hunting, but not deer.
He was pursuing a woman, Marilyn McDougald Moody. Karl has called her “the love of my life” to many people who have corresponded with him via email. Lois asked Karl whether he wanted to work on their marriage or give up. He moved out the next day. A week or so after Karl’s departure, Randy Lee Moody, Marilyn’s husband phoned. He was trying to collect on a hot check of Karl’s. Comparing notes, Randy and Lois discovered that Karl’s “hunting trips” appeared to coincide with Marilyn’s overnight visits at girlfriends or “out of town” forays.
Randy and Lois became friends through this difficult time. Later they would marry and sue Karl for unpaid child support. Karl and Lois’s divorce battle turned bitter quickly. There are over 12 years of court records reflecting the blood-soaked turf of child custody, child molestation allegations, property divisions and much more.
Howard Lovy’s Nanobot blog, Portland Indymedia Blog and PicassoDreams have run queries and located the voluminous court records available. Attorneys on both sides suggest that the depositions, replete with tales of a CIA/mob connection, and various other “fantasies” were entertaining, but factually impaired.
When Karl was ordered to quitclaim a piece of property to Lois, he made out a quitclaim to an incorrect address and then attempted to unload the property by forging Lois’s name. This resulted in another lawsuit against Karl and could have landed him in jail. But, like so many of Karl’s adventures, when admonished about the illegality of his actions, he blamed the situation on other people.
Throughout the peregrinations of fortune that Karl experienced, he failed to pay the $35 a week pittance ordered as child support. Even when he was flush, Karl did not pay $140 a month to maintain his son. Eventually, after the arrears reached $6,000, Karl was sent to the county jail by a judge who called him a sociopath before sentencing him.
While in jail, a church with a fundamentalist orientation sent members to visit Karl and even lent him a car when he left. Perhaps praying to get out of jail with these church members is where Karl began what he has described as his prison ministry in his book, “One Way Ticket to Crawford.”
For 12 years after the harbor fiasco, Karl dodged creditors and set up other businesses that failed. In 1987, he created a “digital video business” under Marilyn Moody Schwarz’s name with Thurman B. Patterson as the only other officer.
Marilyn and her two children fared no better than Karl’s son Ryan in that he did just about as well supporting them as he did his son. Their lives were filled with chaos and poverty. Karl and Marilyn filed for bankruptcy in1992. The following citations of this case are taken from the PACER online federal court information system.
4:92-bk-41522 Karl Wilhelm Schwarz and Marilyn Schwarz
Case type: bk Chapter: 7 Asset: No Vol: v Judge: Mary Davies.Scott
Date filed: 06/17/1992 Date discharged: 09/15/1994
The records show that the bankruptcy was discharged near the end of 1994. Karl moved the family to Maryland to start over, but quickly became embroiled in yet another get rich quick scheme. From what can be pieced together, Karl convinced a number of investors to pool money to lease or option an office building that the GSA indicated interest in buying.
When the GSA bought the building directly from the owner, Karl sued. When the case was dismissed in Maryland as groundless, Karl and Marilyn returned home to Little Rock.
Again, my thanks to the blogs who have done the research.
Back in Little Rock, Karl purchased a 5,000 square foot house in Chenal Circle that he could not make the payments on. Eventually, the utility companies turned off their electricity and water. Karl and Marilyn lived in this huge house, bathing and washing with the water from a neighbor’s hose. Occasionally, that same neighbor would invite them over for a hot shower.
After much wrangling, with Karl appearing pro se (as his own attorney), the house was repossessed. Marilyn, tired of the chaos of the “Life with Karl” daily drama, filed for divorce.
By 1997, things were again at rock bottom. Karl had filed for a second bankruptcy to avoid both creditors and paying Marilyn a property settlement. Even though she entered marriage with a house, it is not clear that she left with anything.
Yet another victim of the Karl Express to Glory train of financial gain. Casting about for something to do, Karl became very interested in telecommunications and the Internet. It is not clear whether he or cronies set up the e*Capbank and the GlobalAxxess sites.
Both were part of an attempt to secure funding to take over failing telecommunications companies. Karl intended to purchase these companies with OPM and meld them into a worldwide conglomerate with himself at the helm. The deals failed, because despite all the effort expended (i.e. a Delaware LLC., an Arkansas corporation, an Antigua trust), Karl could not find the money to make the deals happen.
Actually, there was another problem. Karl’s proposal to save Global Crossing violated a number of pension and other agreements. The fact that Karl lacked the experience to run a huge conglomerate was just a little fly in the ointment compared to his finances. Throughout the 2000, 2001 and 2002, Karl worked his GlobalAxxess, Commaxxess activities.
He never acquired any of the companies that he targeted and Chiaro has not confirmed that he had any relationship with them. There is a judgment of $2 million against Karl by UUnet. As of this date, it is not clear whether they have any way to collect on this judgment. According to Arkansas’s Secretary of State, Department of Corporations, GlobalAxxess and Commaxxess have had their charters revoked. In Delaware, the names for GlobalAxxess Holding Inc is available. That’s a good indication that the state revoked the company’s charter.
When asked about how he jumped from real estate to telecommunications, Karl explained that he learned all this high finance as a broker. A search of the National Association of Securities Dealers (NASD) yielded no - absolutely no - license for a Karl W. Schwarz, a Karl W.B. Schwarz or derivatives thereof.
Flash forward to another Karl venture circa 2002. Reichenbach Group, LLC, a publishing company formed by T.B Patterson, would publish Karl’s book, “One Way Ticket To Crawford, Texas.” When the book was available, the newly christened, Karl W. B. Schwarz began to make the rounds of the Internet sites relating to 9/11.
He wrote a series of articles entitled, “Pop Goes the Bush Mythology.” Doubtless, Karl’s energetic evangelizing of this topic revealed many fundamental questions about 9/11. It galvanized people’s interest. Karl sold these ideas as he sold so many of his schemes.
Unable to resist self-aggrandizement, Karl tried to add gravity to his efforts, by portraying himself as a big player within the Republican National Committee (RNC). A search of the FEC records at Political Money Line turned up no political contributions made by Karl Schwarz or his company Patmos.
He further embellishes his image with his claims of being the CEO of a nanotechnology firm, Patmos. Actually, many of his trips to speak about 9/11 have had a dual purpose; he is also seeking investors for Patmos.
Interestingly enough, many of Karl’s targeted investors are women, wealthy women. Those who have watched him in action opine that Karl’s goal is to find an extremely wealthy woman who can keep him and his dreams in the lap of the luxury that he’d like to believe he was born to. Patmos has been his vehicle for gaining access to these women. There are many of them, too. Deborah on the west coast, Paula in Georgia, Amy, a nurse in Canada, to name a few.
Like so many Schwarz ventures, Patmos is more idea than reality. Searches of international and national patent databases conducted via the US Patent office yield no intellectual property under the name Patmos, Patmos Nanotechnologies, Karl W.B. Schwarz, Karl Schwarz, Carl Schwarz, Bill Schwarz or any combinations thereof.
Searches of pending patents also yield no results. There are patents under Karl Q. Schwarz and Benjamin Schwarz, but not only do these not share the name of Patmos’ CEO, but the patents are not “assigned” to the company. Searches of nanotechnology sites and postings left there indicate that in the small community of materials science, Karl Schwarz is not a recognized name.
In Arkansas, where Patmos is incorporated, the department of securities has never heard of Patmos, which means there are no shareholders.
So, considering that Karl W.B. Schwarz is as hollow a man as Dubya, why does he hate him so? An educated guess might be that Dubya hasn’t been caught and Karl has. Both have deceived and betrayed, but one man was a fortunate son whose wealth and familial connections obviated his need to ever pay the piper for his fiscal, moral, ethical and personal misdeeds. The other son wasn’t so fortunate.
Author's note: Many people were interviewed for this article. Public government sources provided information on licensing, business licenses, court cases and other aspects of the story. Some information was also gleaned from the web.
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