Weird People of History: Tino De Angelis

Tino De Angelis was the most persecuted man of all time.

Everywhere he went, he was dogged by people out to get him. The government. The big soybean oil exporters. Opus Dei, for some reason. All out there, screwing over the little guy so they could make their big profits. Deals he was counting on would suddenly fall through. Prices he thought for sure would stay low would suddenly be jacked up. And, most of all, there were the constant accusations of fraud.

It just broke Tino De Angelis's heart. He was a hardworking, intelligent, selfless man, a man who only wanted to provide for his family, and yet he was constantly accused of committing fraud. Every time he started a business, someone came around like "you're supposed to pay your taxes, Tino" and "why did you sell me rancid soybean oil, Tino?" and "what exactly are you doing with all those bags of small unmarked bills, Tino?" It truly baffled him, why they always made all these frivolous accusations. Why did everyone have it out for Tino De Angelis? Probably it was all Opus Dei's fault somehow.

Fortunately, Tino De Angelis gave extensive interviews to Norman C. Miller, author of The Great Salad Oil Swindle, so we can see his own perspective and understand how truly and deeply marginalized Tino De Angelis really was.

De Angelis was born in 1915, the son of Italian immigrants. His woes began when he was a teenager and got his first job at a fish and meat market in the Bronx. A few years later, he was fired (De Angelis claimed) because his boss was jealous of how smart he was. His boss immediately regretted his decision to fire De Angelis, so he blacklisted De Angelis from the entire fish and meat industry, so that De Angelis would have no choice but to work for him again. But De Angelis refused to give in and transitioned to hog processing. Whether you think this is a plausible explanation of De Angelis's exit from the fish and meat business is between you and your deity of choice.

De Angelis was very, very good at cutting up hogs quickly. Norman C. Miller managed to get independent confirmation of this fact, so I'm including it because it's a refreshing change to have one fact about De Angelis's early life that is verifiable. De Angelis climbed the ranks of the hog processing business and wound up running his own hog processing business. He escaped the draft in World War II because he was a major pork producer. During World War II, he became a very wealthy man. Some people said he sold meat on the black market but surely that is a slander against such a honest and straightforward man as Tino De Angelis.

In 1947, he decided to expand his hog business to Yugoslavia out of sheer altruism and concern for the Yugoslavian people. He made lifelong friends with the Yugoslavs after this. Now, there was some minor matter where the Yugoslavian government sued him for delivering substandard lard and he had to pay $100,000 ($1.5 million in today's money) to settle the lawsuit. But this was clearly all a misunderstanding or something, and actually all of Yugoslavia was full of gratitude for Tino De Angelis.

De Angelis's persecutions continued. For example, one of his companies got a contract to sell meat to schoolchildren. Of the 19 million pounds of meat the company was supposed to supply, 2 million were uninspected and therefore inedible. Of course—De Angelis pointed out—this was because the government wanted the wrong things out of its inspections, and if De Angelis had provided inspected food, the meat would have been inadequately cooked and the children would get food poisoning. Did the American government want American schoolchildren to get food poisoning? Were they so invested in false accusations against Tino De Angelis that they would let children throw up from bad meat?

In 1955, De Angelis founded a salad oil company, Allied Crude Vegetable Oil.¹

De Angelis worked for eleven hours a day and was obsessed with making money. He rarely listened to music. The only book he read was Lose Weight The Doctor's Way. He talked primarily about his career accomplishments, the money he earned, and how dreadfully persecuted he was. To be fair, if I were as persecuted as De Angelis I would be talking about that all the time too.

De Angelis had a team of 22 loyal goons, each of whom was paid $400 ($4,200) a week plus a company Cadillac. When he was feeling generous, De Angelis would give them presents of up to $10,000 ($106,000). Some of his goons played important roles in his business; others were randos that he happened to like. He saw his goons as a family, with himself as the benevolent father.

De Angelis was a generous man in general. For example, one time he paid the bills of a government agent, purely out of the kindness of his heart and his sheer love for his fellow man. And then he was accused of bribing a public official! So unfair! Can you believe how mistreated Tino De Angelis is at all times?

Tino De Angelis was also a selfless family man who devoted himself to his wife and children. Indeed, he was so concerned for his wife and his children that he lived separately from them in a hotel room, so that they wouldn't be disturbed by his late-night work and telephone calls. Or, for that matter, by his assignations with his mistress.²

In the four months before Allied's collapse, it spent $458,000 ($4.8 million) on "petty cash." De Angelis explained in court that this was yet another result of his continual persecution. It seems that De Angelis was continually set upon by grifters making false claims of rancid salad oil and so on, and the only way to get them to go away was to pay them off. Too, truck drivers and clerks all expected a tip of $10-$20 ($105-$210) as you went about your business. De Angelis said proudly that he was an honest man: he had never spent a dollar of the petty cash on his personal expenses.

Now, other salad oil companies had advantages over De Angelis's salad oil company, such as "money" and "expertise in the salad oil industry" and "choosing their location based on economic considerations and not based on where De Angelis's cohort of loyal goons lives." But because salad oil hadn't really been exported before, they didn't know much about how to do exports, and here De Angelis found an opportunity.

He bought salad oil, took it to New Jersey (where his goons were), and then sold it to commodity export companies to export. He would pay high prices so farmers would sell to him, and sell at low prices so exporters would buy from him, and soon he would have all the business. He just needed a few small loans from the export companies to finance all this, which they happily gave him. Not only were the export companies getting all these profits from the soybean and cottonseed oil, they were also getting interest payments on their loans to Tino! Wow! It was like a license to print money!

Now, this might raise some questions about where exactly Tino De Angelis was making a profit, if he was buying high and selling low and paying interest to boot. The export companies had a satisfactory answer: he was clearly working as a money laundering front for the Mob. So they didn't have to worry about him defaulting on his loans: The Godfather had it covered.

De Angelis's primary business was related to the Food for Peace program. Schematically, the Food for Peace program involved paying farmers for surplus goods, and then giving those goods to starving people in low- and middle-income countries. However, this was a very unpopular program. So it was made more complicated than that in the hopes the American people would fail to understand what the program did. For their services overcomplicating the program to confuse the American people, commodity export companies made hefty profits.

The people running the Food for Peace program continually had it out for De Angelis, to the point that one really wonders why he didn't switch to some other line of business with less vindictive and hateful people. For example, there was once a minor paperwork mix-up where De Angelis shipped soybean oil to Spain before the United States government bought it, then backdated paperwork to make the shipment look like it happened after the purchase. De Angelis made $1.2 million ($12.7 million) from this misunderstanding—really just pocket change. And then he had to pay a settlement! He was even briefly suspended from the program!

De Angelis supplied 347 million out of the 400 million pounds of oil and shortening sent abroad by Food for Peace. As a brilliant businessman, De Angelis had decided to pack the oil and shortening in cheap cans to save money, while telling the persnickety bureaucrats in the government that he packed them in normal cans. And then people claimed that the cans leaked! That the oil was rancid! That not only was none of the oil he supplied fit for human consumption, it also made all the other food shipments unfit for human consumption because they were soaked in rancid oil! How could De Angelis's enemies have slandered him so?

Meanwhile, Tino De Angelis faced legal trouble: he was accused of perjury related to his meatpacking company and of evading $1.5 million ($15.8 million in today's money) in personal income tax. He had also been fired as a client from two different banks for repeatedly bouncing checks. Minor peccadillos, I'm sure. Understandable problems for any businessman to face.

None of these problems, according to Tino De Angelis, had anything to do with anything he had done wrong. The source of all his problems was that a "clique" in the Agriculture Department was deliberately trying to screw him over because they were jealous of how successful he was and because they were racist against Italians.

The Agriculture Department wasn't the only group of people persecuting Tino De Angelis. For example, he suffered greatly under the hands of Opus Dei, which secretly ran the Spanish soybean oil industry and didn't want competition from a hardworking American like De Angelis.

Even his own workers betrayed him. For example, De Angelis once offered to buy all the drums he used to deliver oil from the Spanish government—only to discover that a competing export company had also included the same clause in their own contract. The only explanation for this blatant plagiarism was that the competing export company had gotten to De Angelis's typist and stolen De Angelis's idea. After all, the clauses were exactly the same, and it's not like legal contracts are a highly formulaic genre where people use exactly the same language over and over again.

Now, the other thing we need to understand to understand this fraud legitimate business scheme is bank loans against commodities. Any commodities trader needs to maintain a large inventory of the commodity so they can quickly fill orders. But a warehouse full of soybean oil isn't very liquid (financial), so companies often need to borrow money to pay their bills. So if you're a bank, you can make a loan with the soybean oil as collateral and collect the soybean oil if the trader defaults on the loan.

For safety, banks require that collateral commodities be placed in an independent warehouse that inspects the commodity and issues a statement to the bank saying that the commodity is there and exists. Sometimes, the independent warehouse is literally a separate building, but that's inconvenient. You constantly have to move your soybean oil in and out of the separate warehouse, as you borrow and pay back loans. So people make "field warehouses" which are on the company's property.³ Usually, the field warehouse is a specific part of the regular warehouses with the independent storage company's name on it. For convenience, the independent storage company usually hires a bunch of the commodity trader's warehouse employees, so they do the same job for both companies.

Would you believe that fraud was endemic in this industry? It was. The fraud rate was particularly bad because companies that use inventory as collateral usually don't have any better credit sources, so they were likely desperate for money.

American Express decided to get into the field warehousing industry, because all the banks did business with them and trusted their travelers' checks and credit cards. Unfortunately, the division was incredibly unprofitable and on the verge of shutting down.

And then a savior appeared—so noble, so self-sacrificing, so heroic, a veritable chevalier of capitalism. Tino De Angelis.

De Angelis couldn't borrow money from banks, because the endless persecution had left banks under the surely mistaken impression that he was the slightest bit of a credit risk. So he wanted to borrow money from the export companies. The export companies figured that American Express had obviously checked and was trustworthy even though De Angelis wasn't trustworthy. For its part, American Express assumed that the export companies had obviously checked and the role of the field warehousing company was purely bureaucratic.

Soon, Allied was American Express Field Warehousing's biggest customer. For the first time, American Express Field Warehousing was profitable! Sure, there were a few missteps: oil pledged as collateral sold to a customer here; the supply of the wrong kind of food oil there. Sure, they had a bunch of De Angelis's goons on the payroll as the inspectors. Sure, American Express's independent inspector had a nose that let him sniff out anything suspicious by taking a quick walk around the warehouse, and relied on it to the exclusion of actually checking anything. But American Express Field Warehousing saw none of that as a reason to fire their best client.

Now, Tino De Angelis—being a savvy businessperson—noticed an inefficiency in the warehouse receipts system. As long as he paid back his loans, he had no need for the oil he was using as collateral. So why not sell the oil? Unless he defaulted, no one would notice except American Express Field Warehousing’s lackadaisical inspectors.

De Angelis had a couple of different strategies to fool the inspectors. He built compartments into the lids of some tanks and filled them with oil. When the inspectors took a sample, they'd take it from the compartment and think the entire tank was full of oil. On other tanks, De Angelis installed a narrow pipe around the tank's hatch and filled it with oil: inspectors could take a sample from the "bottom" of the tank. And some tanks didn't have pipes or compartments; they simply had oil floating on top of seawater. If all else failed, an elaborate series of pipes allowed De Angelis to move oil from one tank to another as circumstances demanded.

Allied had twenty-four hours' notice of all inspections, which allowed them time to set up. The inspections were done by two-person teams: one from Allied and one from American Express. The inspector from Allied dropped the measuring tape into the tank to measure how much oil there was in the tank; the inspector from American Express simply recorded what Allied's inspector called out. So of course the Allied inspectors would allow their measuring tapes to hit the oil with a splash, then pull the tapes up ten or twenty feet and report whatever number they felt like.

An anonymous source called the head of American Express Field Warehousing and demanded a $5,000 ($54,000) reward for a tip: the tanks that were supposed to be full of oil were actually full of seawater. Once again De Angelis was beset on all side by greedy, anonymous evildoers.

American Express Field Warehousing strolled into action. They put a sampling device into each tank to find out whether it was full of oil. They didn't bother to check for a false chamber; surely the same technique that they'd done before would be good enough. Then they let Allied's chief chemist analyze the results of each sample. After all, who would be more interested than Allied in finding out whether some malefactor was filling their tanks with seawater?

Somehow, the chemist reported that some of the tanks had too much seawater in them. De Angelis quickly explained that a steam pipe has broken at an inconvenient time and was soon to be repaired. American Express Field Warehousing believed him.

De Angelis was so offended by the accusation that he threatened to take all his business to a different warehousing company, and the head of American Express Field Warehousing had to use all his skill to talk De Angelis down and save his division.

The anonymous whistleblower repeatedly called American Express to no avail, even escalating to the executive assistant of the president of American Express. By all reports, the whistleblower was extremely annoyed by this.

De Angelis's creativity didn't stop there. Allied also hired Harbor Tank as a field warehouser. A third of the fees were kicked back to a De Angelis goon, who then evaded taxes by creating a fake company that had a fake subsidiary that owned a racehorse as its only asset. De Angelis quickly realized that he in no way had to "own" the tanks that Harbor Tank was using as its field warehouse. Of the 41 tanks Harbor Tank was renting, 10 were real, 23 were rented out by the owner of the warehouse to someone else, seven were unfit for use, and one was nonexistent.

Over time, the gap between the amount of oil Allied was supposed to have and the amount it actually had grew. They began to record cheaper oils, like cottonseed oil, as soybean oil. This complicated the bookkeeping and made room for errors. By 1961, the gap was so large that De Angelis was struggling to fill legitimate oil orders.

Errors multiplied. An export company noticed that its oil was missing and had to be mollified. De Angelis once sent someone the wrong kind of oil, leading to a loss of $2 million ($21 million). The Agricultural Department, when investigating an unrelated Food for Peace scam clever business deal of De Angelis's, discovered that De Angelis had borrowed against cottonseed oil he had already sold; American Express Field Warehousing concluded the situation was fine because De Angelis had enough oil to cover the new loans.

By 1963, Allied had borrowed against 480 million pounds of oil. This was fine, thought American Express Field Warehousing, because American Express Field Warehousing leased warehouse space for 560 million pounds of oil from Allied. Of course, the capacity of the vegetable oil section of the tank farm was only 500 million pounds—and that would have to include all the oil Allied was using for its actual business. And at the time there were only 137 million pounds of oil in the tanks.

American Express sold its field warehousing department because it concluded the department would never be profitable enough. However, it kept the Allied account, because the Allied account was earning them a great deal of money.

Meanwhile, De Angelis had a big order for soybean oil in Spain. He bought futures so he could fill it. And then the deal was very evilly quashed, probably by his old arch-nemeses Opus Dei:

Tino was furious but he didn't blame the workingmen at the Comisaria. "One of them came to me with tears in his eyes and says, 'I cannot do this terrible thing to you.' I told him 'I understand, it is all right.'" As Tino told it, the shame of the aborted deal was more than some of the ministers could bear. "Two ministers died as a result of this here contract," he declared darkly.

De Angelis decided to keep the soybean oil futures so that Opus Dei wouldn't WIN. But he had no buyer for the oil.

In 1962, the Agricultural Department predicted record soybean oil exports. For various reasons, soybean oil exports were pretty normal. And by "for various reasons", I mean "because of the SABOTAGE and OPPRESSION of the soybean oil crushers, who had gotten the U.S. government to break the sacred promise it had made to buy soybean oil by predicting that soybean oil exports would be high, purely because of the malice in their hearts they had against Tino De Angelis specifically."

Tino De Angelis wasn't going to let the soybean crushers win. He would buy MORE soybean oil futures contracts! As long as he kept the price of soybean oil futures high, he wouldn't have to sell it at a loss. He got several of his goons and his acquaintances to buy soybean oil futures as well, to make it look less like Allied was propping up the entire market.

Fortunately, the Agricultural Department predicted huge soybean oil exports in 1963. Surely they were right! All De Angelis had to do was hold on until 1963 and liquidate his futures positions, and he would be back in business!

Would you believe that the Agricultural Department was not right? It is almost as if predicting high soybean oil exports is not a binding promise from the U.S. government to buy soybean oil.

There was only one possible solution for the conundrum Tino De Angelis found himself in. Tino De Angelis would take up check kiting.

Somehow, the banks didn't notice that Allied was doing check kiting, even though Allied's messengers were so certain that checks would wind up cancelled that after delivering a check they hung out in the lobby.

At this point, it was obvious to everyone that De Angelis was buying up an enormous number of oil futures. The future prices of oils close to delivery date were more than $300 ($3,200) per 60,000-pound contract higher than the market price of oils. Allied's paper holdings of oil in its warehouses and futures together amounted to more oil than the United States had ever exported in a year. Allied's trading behavior made it obvious they were propping up oil futures prices.

Allied's trading partners knew Allied was trading recklessly, but simply assumed that Allied would go bankrupt and then they would go in and reclaim all that oil that was definitely in their warehouses. Right? Others wondered if De Angelis had some kind of secret inside information—perhaps about a big Russian deal—that made his behavior make sense.

Regulators were having twice-daily meetings about De Angelis, but felt they could do nothing until he actually cornered the market. Trying to manipulate markets wasn't illegal. Only succeeding was illegal.

In reality, Tino De Angelis was trapped. He couldn't sell, because then prices would crash and he would lose everything. So the only thing he could do was drain all of his reserves of cash, take out as many loans as possible, and desperately try to keep the price high long enough for a miracle to happen.

Meanwhile, soybean oil exports kept falling:

"Why would Spain buy from Russia when they got a contract with Allied which they refuse to fill?" Tino wailed. He knew the answer, of course. It was the crushers and the Opus Dei turning the screws on him. "The crushers led the Spanish hierarchy, the Opus Dei members, right, to go to the extreme of buying oil from Russia, a hated enemy of Spain," Tino said.

American Express finally got fed up with its field warehousing division and the obvious corruption, and ordered the division to stop issuing warehouse receipts in preparation for the entire division to be wound down. De Angelis stole a blank pad of warehouse receipts and kept issuing them.

De Angelis continued to buy more futures contracts. To be sure, he had to prop up the market: a one-cent-per-pound drop in price meant that Allied would have to come up with $13.5 million ($144 million) in margin in 24 hours. But he continued to buy recklessly, far beyond that. Presumably he had some farsighted business strategy that we are all too hidebound and small-minded to see.

On November 15, 1963, De Angelis was finally forbidden to buy more futures. He responded in the only way he possibly could: getting people to illegally buy futures for him.

A few days later, the government announced it was investigating De Angelis's futures trading. The market collapsed. De Angelis did a few more crimes for the road: passing off a few fraudulent warehouse receipts and writing a check that bounced.

The entire fraud was so complicated to disentangle that the Census Bureau, for the first time ever, failed to list how much soybean oil there was in the country; it was simply impossible to figure it out. In the end, there was a shortage of 1,854,000,000 pounds of soybean oil, at an estimated value of $175 million ($1.85 billion). Only 7% of the expected oil existed.

Tino De Angelis was arrested for fraud. The process of prosecuting him for fraud gave a lot of headaches to everyone:

Tino proclaimed proudly to the bankruptcy court that he had always intended to return the money to Allied. He said blandly that the $500,000 in Switzerland wasn't included in the financial statement accompanying Allied's bankruptcy petition because he had forgotten about the funds in his haste to go bankrupt. In his most earnest manner, Tino said that he had not remembered he had the money in Switzerland until a month after the bankruptcy, but he couldn't tell anyone about it then (not even his own lawyers) because he was pleading the Fifth Amendment to all questions...

Tino insisted that the $500,000 in Switzerland had always been considered Allied's money, although it was held under numbered accounts for himself and his top aides. It was necessary to be sneaky about the money, he explained, because it was obtained from Spanish importers who had agreed to give Allied under-the-table kickbacks on their fees from the Spanish government for handling salad oil shipments.

Also, the reason Allied didn't pay taxes for two years was that he didn't know how to account for that money on Allied's tax paperwork.

David Ravin, another member of the law firm aiding Allied trustee DeLear, demanded to know what had become of $123,100 listed as a petty cash asset on Allied's financial statement. Tino replied calmly that this was the amount of cash Allied had spent on petty items during the previous eighteen months.

Why were the expenditures listed as an asset? asked the puzzled lawyer. "Mr. Rotello just hadn't gotten around to accounting for it," Tino testified.

De Angelis stole millions in the last few weeks of the scam, and presumably didn't spend all of it on futures. No one is really sure what he did with the rest of the money, but (from the reports of acquaintances asked to be his stand-ins) he appears to have used some of it to continue trading in salad oil futures.

Tino De Angelis ultimately⁴ pled guilty to fraud, announcing in a statement that he had "to accept responsibility for the ultimate failure, even though that was brought about by matters completely beyond my control." To explain his fraud, he said that during business failures "recourse is often had to means and methods of continuing the company's existence which would never have been thought of under normal conditions."

The judge, however, was the first person in the world not to persecute Tino De Angelis. Indeed, the judge gave a speech about how admirable De Angelis was: a self-made man, hardworking, a sharp businessman. Honestly, De Angelis was a true credit to America, the land of opportunity. De Angelis no doubt felt happy listening to the speech and, for the first time, really feeling understood.

The judge sentenced him to 10 years in prison but invoked the option to require a full psychological study of De Angelis, at which point the judge would review the evidence and decide whether to sentence him to the full 10 years, a shorter sentence, or probation. De Angelis would ultimately serve seven years in prison and be released in 1972.

The Useless Information podcast explains what De Angelis did with the rest of his life:

He ran a group of companies with such great names as the Rex Pork Co, Miller Pork Packers, Meadow Meats, and Prime Protein Pigs. Since he was indebted to the IRS for over $8 million, Tino didn’t own the businesses, but everyone knew who was in charge. In 1980, after cheating farmers and suppliers out of an estimated $13 million, Tino found himself back in prison serving an additional seven years for racketeering, conspiracy, and mail fraud.

Three years later, Tino was once again paroled with the stipulation that he have no direct or indirect financial interest in the pork industry.

So where does he end up? Working in the Finger Lakes region of New York operating the Natural Lean Pork Company. This stint would get him into the newspapers one last time. On August 20, 1993, seventy-seven-year-old Tino was sentenced to 21 months in federal prison for using $660,000 of forged letters from the Savings Bank of the Finger Lakes to purchase more than $1 million of pork from a Canadian firm.

Too geriatric to commit more fraud, he died in 2009 at the age of 93.

I'll give the last word to Tino De Angelis himself:

With tears glistening in his eyes, De Angelis gripped the rail before the judge's bench and began again: "In my own mind, Your Honor, I know I would never lie, irregardless if billions were involved. I would never, ever lie. You are a fair judge but if you find me guilty, I don't agree with you. There is not enough money in the world to make me lie. Life is too short. I will never, ever, ever, ever lie to you or anyone else."

1. "Salad oil" is an old-fashioned word for certain kinds of neutral-tasting oil, like soybean oil and cottonseed oil.

2. De Angelis was also generous to his mistress: Allied paid her $25,000 ($264,000) a year, not counting the $100 ($1,050) a week she got from a different company, the down payment on her house, the cars, or all of the furs and jewelry De Angelis gave her. She was paid all this money for providing social entertainment to De Angelis's clients. She had a hard time remembering which specific people she'd entertained. Probably she had just entertained so many people that it was hard for her to remember.

3. Or at least they used to, I don't know what the current state of the warehouse receipts industry is.

4. The Useless Information podcast thinks De Angelis was sentenced to twenty years in prison. I have no explanation for the discrepancy between this podcast and The Great Salad Oil Swindle.