"Seattle P-I Uncovers Paper Empire
A 'tycoon' who made it all up"
By Carol Smith (formerly Monkman)
P-I Reporter
Front Page
Friday, February 14, 1986
Seattle Post-lntelligencer
101 Elliott Ave West
Seattle, WA 98119
and other news sources:
At first glance, Keith Gormezano appears to have what most executives only covet -- a classic business success story, prestige, wealth, power, a fabulously successful publishing company, and credibility in eyes of some of the nation's most authoritative publications.
In 1985, his Seattle-based company Le Beacon Pressé was listed in Inc. magazine as the 35th fastest-growing private company in the nation, hauling in a whopping $666 million (funny number, isn't it?) in revenues a year.
"...everybody wants
to be successful.
Creating a fictitious
company is one way
to do it."
-- Keith Gormezano
But the numbers mask a paper empire. Le Beacon Pressé does not exist. Neither do any of the other half-dozen companies created by Gormezano's (fertile imagination) in the past five years.
Gormezano parried inquiries by the Post-Intelligencer, insisting through an initial interview that his business was legitimate. Not until the Post-Intelligencer presented him with "evidence" showing his companies were fake did he admit he made them up (not true, even the reporter admitted to me that it was hard to disprove the existence of a company that was listed everywhere).
In real life, the impish, mustachioed Peter Sellers look-a-like 30-year-old Gormezano (now permanently 39+3 or 42) manages the modest, two-story apartment building (owned by Iranian Jewish investors) that occupies the address he listed as the headquarters of his phantom firms.
He works part time at an undisclosed location (actually, it was the admiralty law firm of Thomas A. Geiseness and Associates) and been a student at the University of Puget Sound (now Seattle University) Law School from 1984-1986 (where I was nominated to be the graduation speaker by some of my classmates for my "cents" of humor.) He publishes a small literary magazine called The Beacon Review, which brings in revenues of a $200 a year in a good year.
The charade started five years ago on a bet (with Steve Bissell, a friend from the University of Iowa), said Gormezano. Soon, however, the bet grew into a personal obsession to get into as many business guides and directories as possible. To get into some, he just filled out forms. To get into others, however, he created false financial documents complete with the faked signature of an alleged Arthur Andersen & Co. auditor (who was never called by Inc. magazine) to verify the information.
By the time he was discovered, Gormezano had convinced publications around country he was the founder and executive officer of at least five companies: Le Beacon Pressé, Gormezano Reference Publications, (Keith Gormezano) PR Advertising and Design, Effective Advertising, and Le Beacon Small Press Library.
Le Beacon Pressé -- his largest company -- was supposed to be a publishing house that put out "Who's Who" directories by state. Gormezano went as far as obtain Library of Congress and international numbers for the books he never published. He had the titles of his bogus books -- several hundred of them -- listed in current editions of "Books in Print", the standard reference tool for book buyers.
He invented a perfectly ethnically (not to mention sexually and racially) balanced executive team (which, we know doesn't exist in the real business world):
- Susan Goldstein, executive vice president;
- Geraldo Chavez, vice president, finance;
- Elaine Fugiyama, vice president, sales;
- Leroy Jones, vice president, marketing;
- Mohammed Akizi, vice president, production;
- Jean-Pierre Depree, treasurer;
- Margaret Running-Deer, secretary and office manager;
- Michael K. Mulford (a real friend and Miami attorney from college as general counsel);
- Edward Artic-Waters (modeled after his friend Edward Walters of Iowa City), direct mail manager; and
- William J. Pearson IV, comptroller
(the token WASP, he quipped).
He also used the name Pearson to sign financial statements, representing him as an Arthur Andersen (misspelled as Anderson to see if anyone would catch the mistake -- no one did) auditor. He had his business certified by the state (of Washington), city (of Seattle), and (King) county as minority-owned.
(In reality, my family originated from Spain and I have always considered myself "Hispanic" as have others such as State Representative (43rd District) Frank Chopp, the former Executive Director of the Fremont Public Association who wrote a letter to the City of Seattle's Office for Civil Rights identifying me as "an Hispanic employee" when I worked for his Fremont Public Association as a VISTA volunteer in charge of their employment program.) He had a business phone, business cards and a business tax number, but "no business."
His elaborate effort paid off. He is listed in two of the most prestigious business directories - Standard and Poors, 1986 edition and Dun & Bradstreet's "Million Dollar Guide", 1985 edition. He made the Inc. 100 list' in 1981 and the Inc. 500 lists in 1984 and 1985. Venture magazine included him in its list of 100 fastest-growing companies one year.
Gormezano used his title as chief executive of Le Beacon Pressé as well as other accomplishments to get himself listed in Marquis (now Bowker)'s "Who's Who in the West," "Who's Who the World," "Who's'Who in American Politics" and "Who's Who Among Black Americans." Gormezano is not black.
He also has been listed in a publication called OHAYO, a listing of 1,000 prominent native American women, under the name Keth Gorme-Zano.
"The ultimate goal was
to get into every "Who's Who" directory,"
said Gormezano. "I wanted to get listed in "Who's Who in American Women."
The biggest coup of all though, would have been to get listed in the Forbes® 400 list of the richest people in America and the Fortune® 500 list of the biggest companies in the nation, he said. He did not succeed.
Gormezano wrote to Forbes in 1983 suggesting he be included in the next Forbes 400 list. According to Forbes researcher Peter Newcomb, if the most recent information supplied by Gormezano were true, Gormezano's "net worth" would have been enough to make the $150 million cutoff for the 1986 list.
Gormezano defends his actions by saying they just prove it is too easy to get onto lists. "In this country we accept too many things as fact," he said.
Inclusion on lists in national publications provides companies with exposure and credibility they can't buy through advertising. Gormezano argues that the lists should be checked more thoroughly.
Dozens of editors, reporters, (potential) employees, and salespeople called to check him out, but Gormezano stuck to the story that he did not disclose additional information about his companies because were privately held.
Privacy
He refused, for example to disclose to this reporter the location of his Seattle plant, which he said employed 147 people, on grounds that he and his people valued their privacy (plus, I didn't want to get "found out"). At the height of the hoax, he was spending about three hours a day fielding phone calls and writing letters to people about his fake business.
"Probably if I worked as hard in a legitimate business as I did on this, I would be really successful," he said.
But the charade began to unravel after a Post-Intelligencer check revealed peculiar inconsistencies in the company's alleged business.
The company, which Gormezano claimed had a publishing plant "north of the University District" in Seattle, had no license to do business in the city (actually, I did).
And in a long, rambling tape-recorded message on the company's business phone, Gormezano informed callers that the company was 49 percent owned by its employees, yet the company's (state) revenue tax number indicated that Le Beacon Pressé was registered as a sole proprietorship, not a corporation.
A check with the Library of Congress indicated the numbers listed in Books in Print had never been assigned, which meant the books were never published.
A check with Arthur Andersen's world headquarters in Chicago showed no record of Gormezano or his companies as a client.
Inc. is angry
Gormezano's masquerade angered Inc. magazine, which is investigating the matter. (They did nothing). "The Inc. 500 edition is a very, very big issue in terms of general reader and newsstand appeal," said editor George Gendron.
"It's our most important project," said Sarah Baer-Sinnott, special projects editor for the magazine. She said the magazine had never to its knowledge included a bogus company on its list before.
Attorneys for Arthur Anderson were not available for comment.
Gormezano's actions would be considered criminal if he had obtained any money using false pretenses. Gormezano said that he did get checks in the mail from people who wanted to order the books but that he returned all the checks.
Indeed, Gormezano claims he has reaped no financial reward for his efforts, which cost him about $900.
Asked if he had ever used falsified information on his company to apply for a loan, he said "Not that I m aware of, or if I did, it would be rectified quickly."
Gormezano's elaborate hoax raises the question: How do publications check that information they receive is accurate?
Inc.'s safety mechanism was its requirement that companies have their financial statements audited and signed by a certified accountant when they are submitted to the magazine. Once Inc. obtains the signed audit, it calls the company back to verify the numbers. There is no way to check the information independently, because the companies are all privately held, said Baer-Sinnott. As a result of the Le Beacon Pressé hoax, the magazine is changing its research procedures. (Did they? The last time I looked at the nomination form for the Inc. 500, the information had not remarkably changed.)
Hand-culled
Other directories appear to be vulnerable as well.
Names that appear in the "Who's Who" directories published by Marquis Who's Who in Chicago are hand-culled from tens of thousands of applications but the information supplied to the publishing house is not actually checked by the company, said editor John Daniels.
To be listed in the Dun & Bradstreet "Million Dollar Directory," on the other hand, companies usually must be part of the Dun & Bradstreet credit listing, a service that conducts credit checks on companies. The credit ratings entail calls to banks and financial institutions to verify financial information, said a spokesman for the company.
Gormezano, who contacted the company (Dun & Bradstreet) and asked to be listed in the directory, says he avoided credit checks by telling Dun & Bradstreet that all business transactions were done in cash.
A multimillion-dollar company paying cash should have raised a red flag and didn't, said Gormezano, adding that he dropped other hints that should have given him away to publications.
Le Beacon Presseé, for example, should be La Beacon Pressé according to the rules of French grammar (because Pressé is a feminine noun). Only two people ever caught the error.
He also wonders why publications did not pick up on the fact that he went from $666,0000 in sales in 1981 to $666,666,000 in 1985. (besides the fact that 666 is allegedly the sign of the beast according to my Christian friends) "No business could be precise," he said.
And there were other peculiarities that never seemed to raise eyebrows until now.
"Just a lark"
The "Who's Who" guides reportedly published by the company were listed at $959.95 in "Books in Print" -- a suspicious price for directories, some of which claimed only 500 names. Other titles included "A Genealogical History of the Gormezano family." And an "Anthology of University of Iowa Poets, Artists, and Authors."
"For a long time, I thought it was just a lark," said Gormezano. "And it was, as long as it was on paper, but then I find it started to affect me in other ways. You get so used to doing it, it's hard to stop -- after a while you begin to believe it."
"It's like in this country, everybody wants to be successful. Creating a fictitious company (or a fraudulent identity*) is one way to do it.
* See Gary Marx, "Fraudulent Identification and Biography", Ch. 7 In D. Altheide et al., 1990 New Directions In the Study of Justice, Law, and social Control. Plenum.
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Comment - "Integrity:
key to artful deception"
David Kanellis, (now deceased)
Columnist
Page 5A
Friday, February 21.1986
Iowa City Press Citizen
PO Box 2480
Iowa City, Iowa 52244
"I have known a vast
quantity of nonsense."
Charles Dickens
Last week I read a bizarre news story about Keith Gormezano. I was especially interested because Keith was a student in one of my classes some years ago.
The story was about Keith's many achievements, including being listed in "Who's Who in the World," "Who's Who In the West," the Dun & Bradstreet "Million Dollar Guide", and a bunch of other "prestigious" publications.
Of the more than 12,000 high school students I have taught, Keith Gormezano ranks in the top five in honesty and integrity.
According to some of the listings, Keith's income was in the neighborhood of a billion dollars last year. And for a kid who was in high school only dozen or so years ago, that should have seemed to someone to be an unbelievable achievement.
It was.
In. reality, his income is only a few hundred dollars a year. But Keith tricked the corporate pooh-bahs when be sent in his credentials.
Keith got his name on all the big-shot lists as a result of a little bet he had made with a friend a few years ago -- that he could get listed in the most "Who's Who's," that sort of thing. Keith won. I knew he would.
I know at first this is going to sound like a contradiction in terms, but Keith fraudulently got his name on all those lists because of his integrity.
Of the more than 12,000 high school students I have taught, Keith Gormezano ranks in the top five in honesty and integrity.
I first noticed this unusual trait in Keith when he transferred into my high school sociology class in the middle of the term. When he handed in his first assigned paper, I was puzzled. Although he had two full pages written out, front and back, top to bottom, side to side, I could not, make out one word of his handwriting, with the single exception of his name at the top of the paper.
When I returned the papers to the class I told Keith his paper was somewhat less than than satisfactory because it was completely illegible. He would get no credit for it, I told him, sadly. All Keith did was nod politely, fold the paper and put it into his backpack.
His next assignment came in the same way -- impossible to read. Again, no credit for Keith. Again a sad teacher. Again a polite nod from Keith. And again he folded the paper and put it into his backpack, which was most likely filled with other similarly written papers from other classes.
I expected more of the same. But his next paper was tremendous. I could read every word. It was comprehensive, analytical -- a great paper, in fact, on the topic of the relationship between the social class of parents and their children's school activities at West High School. Keith's paper was the best in the class.
Returning the paper to Keith, I complimented him on the vastly improved penmanship and told him what a great lesson he had learned from me by getting no credit for his two earlier papers that I could not read.
Another polite smile from Keith. But this time there was a glint in his eye, and he said something I will remember as long as I live.
"I have a policy," said Keith. "When the teacher gives me a nonsense assignment, I write it so they can't read it. And if they give an assignment that is worth doing, I write it so they can read it."
(Yes, I still have this policy, even in the work world.)
From that day on I quit making nonsense assignments. No more "Summarize Chapter Eight," followed by the "Even numbered questions, at the end of Chapter Nine." Instead, I made an honest attempt to have the students do things that were worth doing, as Keith had suggested.
There is also a lesson in the trick Keith played on the decision-makers at all of those "Who's Who" books that listed his name. And if they learned it, the whole country would be better off.
Keith sent in a lot of nonsense to be published in their nonsense listings. By pulling off such a hoax, all Keith did was show that the publications themselves are one of the greatest hoaxes ever inflicted upon the American people.
You do things like Keith does when you have integrity.
David M. Kanellis (now deceased) is a former West High School teacher
His column appeared on the Comment page every Friday.
For a related story, see Pat Combs Humor: The $95,000 Winning Check
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