The Fugitive Option: Life on the Run

By Harry McDaniel

My name is Harry McDaniel, and I am not a criminal. The money I took belonged to me. Unfortunately, the FBI disagrees. In 1995, I fled the country with $1.7 million of my company’s money. Unwittingly, I set myself up for an adventure for which I wasn’t trained, qualified, or prepared. Along the way, I made friends all over the world who helped me move money into foreign accounts, travel across dangerous borders, and invest in shady schemes. While in Brazil, I bought my first fraudulent passport. While in Hungary, I survived a car crash with $1.5 million in cash in a duffle bag in the backseat. While in Poland, I owned a bar and restaurant and married a Polish woman. We had a son together whom she later abducted.

I met criminals in the Irish IRA and Polish Mafia involved in arms dealing and counterfeiting. I was beat up and came within inches of losing my life. Later, I double-crossed these people and fed information to the FBI and Scotland Yard in exchange for a plea bargain and a ticket back to the United States. Yet in the end, I was unjustly charged, convicted, and sentenced to prison.

• Language: English
• Publisher: Christian Faith Publishing, Inc.
• Release date: May 12, 2022
• ISBN: 9781685704308

Book preview

An Unplanned Adventure

It was Saturday, May 13, 2000, Katowice, Poland—my forty-ninth birthday. My mistress and I were trying to celebrate, but circumstances were making it difficult. Ula, a young Polish girl twenty-six years my junior, was smiling and laughing; but her face showed her fear and uncertainty. We had been forced to huddle away in my safe house, the one place I was momentarily secure. As the both of us were festively eating cake and drinking wine, each was silently thinking what the future may hold. At that particular moment, the Irish IRA and the Polish Mafia wanted me dead. The Polish UOP (Poland’s FBI) wanted me arrested and interrogated on suspicion of espionage, and the American FBI wanted me imprisoned. It was a time of few friends.

My name is Harry McDaniel, and I have been wanted by the FBI for the last twenty years. At one time I was also wanted by Interpol and UOP. The Irish, Swiss, and Brazilian authorities had also begun to take an interest in me. All this, and I don’t think I was even a criminal. I was an average businessman living in the Midwest when, in 1995, my life turned upside down. I was simply trying to protect myself from a predatory business environment and a corrupt governmental administration. But in the process, I managed to get myself sideways with the government and became a target of the FBI.

In an effort to gain forgiveness for my alleged sins, I agreed to work for them. My original assignment from the FBI was simple and free of any real danger, but the rules changed when they discovered what I had actually stumbled upon. Unwittingly, I set myself up for an adventure for which I wasn’t trained, qualified, or prepared. Before I could see it coming, I was propelled beyond the boundaries of a simple FBI source. My services rapidly expanded to include the Secret Service, and even cooperation with England’s Scotland Yard and the German BKA.

Then in one unrelated explosive moment, the game changed. All had come unraveled, and I found myself scrambling for both my life and freedom. The irony of it all is I wasn’t that important, and I don’t believe I was really guilty of anything for which I was charged. I did make some very important people very angry, and that was my crime. You, the reader, can decide for yourself if I was criminal or victim. Whatever you may conclude at the end, I have a story to tell. It has taken me through twenty-nine countries covering four continents. I walked my journey by placing one foot in front of the other and survived by my wits, instinct, and the hand of God. So how did a simple Midwestern businessman from Indiana end up a fugitive in Poland?

To properly understand this story, I need to start from 1991. It’s important to understand the fraud and predatory attacks made on my company, my relationship with the government, and their selective choosing of which laws to enforce. I have tried to tell this story as honestly and accurately as humanly possible and without malice or prejudice. I am now preparing for my final adventure, as I’m currently facing the end of my life. I want it known that I no longer harbor any grudges against anyone; however, I am going to tell the complete truth. I have no sadness, no regrets, no fear but only gratitude for the life I’ve been blessed with. I have received more luck, more breaks, and more success than I ever deserved.

I have made my mistakes and, at times, made some bad choices. But my life has been complete, and I can only be thankful. I’m enjoying the time I have left, and I will go to my grave with a smile on my face. My conscience is clear, my faith in God is strong, and I’m totally at peace. I have traveled a good share of the world and done things that most people only get to read about. Therefore, before my clock runs out, I think it’s time the real story and truth be told. Except for my own name, Harry McDaniel, I’m changing or using only the first names of all the others, as I have no desire to cause harm or embarrassment to anyone.

An American Dream

In 1991, at the age of forty, I was fired from my executive position at the MacDonald Paper Company, and this became the setup for my greatest opportunity. I’d been in the paper business for twenty years and was well established in the industry. All those years, I’d built strong relationships with suppliers and customers alike. It was time to start my own company.

If the new venture was to have any chance, I knew I needed a partner who was knowledgeable, hardworking, and honest. Bob Powers was that man. He had an impeccable reputation and was working for a Fortune 500 company. He was willing to listen to my pitch for the new company and finally agreed to join me. M & P, Inc. (McDaniel & Powers) was formed. Bob received 24 percent of the new company stock, and I agreed to fund the entire venture.

Unfortunately, my total cash availability was about $70,000, only short about a million of what I should’ve had. In spite of having no prearranged financing and limited capital, we started the business. To maintain my position in the market, we needed to start immediately, and for survival, we needed to be an instant success. At the risk of sounding a little naive, I was willing to bet the ranch on Bob and me.

We were in the business of selling printing paper. We started out working out of my basement; and since we didn’t have any warehousing facilities at the time, we initially began selling to my existing customers, which were all bulk sales (truckloads or boxcar loads). A customer’s order could run anywhere from $10,000 to $200,000. Without having a bank line of credit or receivable financing, we were faced with the obvious cash flow problem. If it hadn’t been for the faith and trust of a few suppliers and a list of loyal customers, the new venture would have never been possible. Bob and I owed a great deal of gratitude to all those who had helped us get started. A handful of suppliers extended us open accounts based on faith and their years of doing business with me. Many of my old customers gave us preference over other suppliers and paid us in the invoiced twenty-day period, allowing us to turn our money quickly. The company took off immediately with orders coming in on that first day.

Within the first few months, suitable office space was found, both inexpensive and close to home. Right away my wife, Nella, jumped in to help, serving as our receptionist. She wasn’t working for the money but for our future. Having an office and an employee, we needed furniture and that became a joke itself. Trying to protect what little capital we had, our budget for setting up the office was about 25 cents. One of our customers offered us some office partitions they’d thrown away. We recovered them from a dirty warehouse that was full of all kinds of junk. Piled up like a stack of hay, we sorted out the ones that could possibly be cleaned. As Bob and I were cleaning our new partitions, my wife volunteered to handle the furnishings. She had seen an ad in the paper regarding a furniture sale. The ad read, Truckload sale, and they weren’t kidding. She arrived at the address specified, and there they were selling furniture right off the back of the truck. It wasn’t exactly high quality; but it was attractive, cheap, and wasn’t stolen. She had managed to furnish the office with nickels and dimes; however, it did make me a bit nervous from time to time. I used to have visions of some poor unsuspecting banker or supplier being dumped to the floor, as they attempted to sit on one of our chairs.

In those first few months, all our original expectations had been exceeded. We were making a profit right out of the box. Our salaries were less than half of what we’d been accustomed to, and our profits were just a mere pittance, but we had profits. The ability to pay ourselves those meager salaries and still have a few nickels and dimes leftover was a great moral victory. But the reality was clear—without bank financing, any future growth would’ve been a fairy tale. Little did I know our stroke of luck resided in the office next to mine, my partner.

Bob’s sister worked for one of the major banks in town and knew many of the players. Out of the blue, I received a call from David Truster, one of the lenders, requesting an appointment. When he arrived, I answered his questions and gave him a copy of our current financial statement, and that was that. The meeting was extremely short, and I couldn’t help but think his visit was nothing more than a courtesy to Bob’s sister. And in all honesty, no bank even wanted to talk to us, much less extend credit so early in our existence.

Therefore, it was a total surprise when only two weeks later, David Truster called offering me a line of credit. You could’ve knocked me over with a feather. Our new banker commented about our ability to carry $250,000 of receivables having only $70,000 of capital and no bank financing. At the same time, we’d never been late paying an invoice or missed any early-payment discounts. The banker commented he’d never seen two guys do so much with so little.

The next day David brought the papers to my office for the signing of our credit line. The extension of that credit line was the moment when our new business became a truly viable enterprise. With receivables financing, we began to grow at an astounding rate. We were then able to acquire a warehousing facility, allowing us to start handling smaller customers. Bob soon began bringing in his previous accounts. Finally, we’d become a true paper-distribution company. Instantly, we were selling a broader range of papers to a broader range of customers. It was also the validation of my decision to take in Bob as my partner. Our first year had ended with reasonable profits, and we’d added one more member to our staff.

It was also about this time that I learned the real story behind my firing at MacDonald Paper. It seems the house accountant had been embezzling huge sums of money every month. While I was working there, he was basically skimming off a good share of the profits.

I’m embarrassed I hadn’t figured out the reason for my firing at the time. When I was at MacDonald Paper, it was routine for Nick, who was the owner, and I to receive internally generated monthly financial statements. I was fired on the first of July 1991. Mid-June, I received our monthly financial statement for the month of May. In the month of May, we’d had record sales, yet our profits were less than the previous month. It was not the first occurrence of that scenario: our profits had slowly been declining for some time.

After reading May’s statement, I went to the accountant and asked for the list of May’s expenditures. At the time I was not a qualified accountant and basically didn’t know how to ask the right question. The accountant gave me a copy of the general ledger. I couldn’t see the forest for the trees. I continued asking for the information in different ways but never received what I wanted. What I didn’t know at the time was the accountant wasn’t trying to be helpful, and for obvious reasons. Here’s the funny part, I’d never suspected fraud or theft. I was thinking that maybe Nick or I was spending too much money, possibly our overhead had gotten out of control. I was looking for anything but fraud. At that time, I don’t think I was smart enough to have found it.

However, the day I started asking questions, the accountant started whispering into Nick’s ear that I was the problem. He was telling Nick the company would make more money without me because I was too expensive. I was fired just two weeks from the day I started asking questions. If the accountant had been smart enough and given me what I wanted, I probably would not have found the fraud, and he could have continued to steal profits for some time. But when I was fired, the profits left, and then he had only equity to steal, and that’s what got him caught.

Seeing what’d happened to Nick reminded me of a story that my mother had told me about my dad. My father owned a steel fabrication business, and he’d once told my mother, Anytime the accountants know more than you do, they’ll have all the money. MacDonald Paper was my first experience at seeing that play out in real life. The day I opened my own company, the first thing I learned was accounting. I also approved every invoice paid and signed every check that went out.

As we were finishing our second year, the business had exploded beyond even my grandest dreams. We increased our salaries back to where they belonged, and our bank had increased our credit line to $1 million. At that point, we acquired an airplane, a company pilot, additional office staff, and two additional local salespeople. The plane, which most people, and especially banks, considered to be a perk, was actually a great tool that aided in the rapid expansion of our company. With the use of the plane, I achieved several days of productivity in one. It provided me the opportunity to cultivate customers far beyond our original reach.

Our third year, in 1994, was an amazing year for us. The plane had proven its worth as we were able to expand our market. It allowed me to pick off the cream of customers throughout the different markets within our reach. That strategy proved to be very effective and was executed with a remarkably small staff. We’d established solid relationships with prime clients from New York to Florida, and as far west as the Mississippi River.

That year our credit line had been extended to $2 million, and our bank had nominated me for entrepreneur of the year. The nomination was a surprise beyond my imagination. I made it as far as the final five, which got my picture with a small article about the company in a business magazine.

We’d started our company during what we called a stable market, a time when product demand and supply were balanced. It was the perfect time to start our business. There was plenty of competition and enough supply to grow as fast as your willingness to work and the viability of your business plan. The first three quarters of that third year had been phenomenal, but then in the fourth quarter, signs of market tightening began showing.

By December of that year, the paper mills had instated allocations. That meant we were allowed to buy only the same amount we’d purchased the previous year. The bad news is, it stopped any possibility of further growth; the good news is, prices went up 30 to 40 percent. The simple matter was, we made 30 to 40 percent more money selling the same amount of paper. Sounds great, but problems began to build.

Allocations rolled downhill, which meant we had to set allocations for our customers as well. We were constantly putting out fires with our customers, as every customer felt they weren’t getting their fair share. However, I think the worst of it all was the impossibility to find new suppliers as every mill had their entire production allocated to their previous customers. Every printer, paper distributor, and paper mill were at a standstill.

The paper business was cyclical in nature, just as the economy itself. In my twenty-five years in the business, it was my fifth time going through a tight market. Tight markets normally didn’t last more than about a year and were always followed by a loose market, where you couldn’t give the stuff away.

In those first three years, we’d built a good customer base, and I’d been doing business with our suppliers for over twenty years. Therefore, we felt secure in our supply sources. Allocations had made our life difficult, but I was grateful to be where we were. We finished 1994 with 16 million in sales, and pretax profits of $800,000—a success story that could have only happened in America.

A Perfect Storm

It was January of 1995, the beginning of a new year but still in a tight market. As expected, prices were exploding, and we were making a lot more money. But I must say it was frustrating being limited to the amount of paper we could purchase. Bob and I were looking under every rock for those extra tons.

In four short years, we’d gone from the butt of every joke in town to one of the major paper suppliers in the state of Indiana. I can remember Bob saying to me, Not bad for two guys who didn’t have two nickels to rub together. It was clear we were on our way to more than a $20 million sales year, which would’ve made us over a million in profits. Banks that didn’t want to even talk to us at the beginning started courting our business. Bob and I were certainly living the American dream. Our future appeared to be set for the stars. Unbeknownst to us though, a perfect storm was forming where a series of three unrelated events would simultaneously come together and leave behind a path of total destruction for our business and dreams.

The tight market was our first issue. The second was a predatory, immoral, and illegal attack made upon our company by two different paper mills. We were targeted so our adversaries could gain further control over the market. The last was a million-dollar fraud committed against us by one of our customers.

The tight market meant that a major supplier absolutely could not be replaced. One of our biggest suppliers was Milwaukee Paper. We bought more than 90 percent of our glossy magazine paper from Milwaukee Paper, and for good reason. I’d been doing business with them for over twenty years. In February of 1995, we learned Milwaukee Paper had been sold to Clay Paper Mills. Clay was a multibillion-dollar company with mills all over the country. In mid-April, we received a six-month notice from Clay: they were cutting us off from supply as of November. Their move was not only surprising but also highly unethical and illegal.

Back in the ’60s and early ’70s, the United States experienced its first paper shortage since WWII. The entire paper industry was indicted by the DOJ for price-fixing, market manipulation, and restraint of trade. Several court rulings came out of that case, including A mill had special responsibilities to any customer in which the mill had promoted itself into being a single source supplier and Interfering in a customer’s allocation without cause would be considered to have caused severe financial harm to the customers affected. When Clay assumed ownership of the Milwaukee Paper Company, they had also assumed all of Milwaukee’s responsibilities and liabilities. All suppliers had a legal obligation to continue the supply of earned allocations to their distributors. I wasn’t the only victim. There were over thirty other paper distributors that were being shut off just like me. M & P could not remain viable without a supplier.

We made pleas to Clay (Milwaukee) to at least continue supply until the market loosened, at which point we could’ve easily found a new supplier. Our requests were ignored. We then filed a complaint with the DOJ for antitrust violations and received a reply from the FBI that said, and I quote, The problem is not widespread enough to warrant our involvement. We consider the matter a civil case. That’s no different from saying a bank robbery doesn’t warrant their involvement if it’s not too widespread. Later, I learned that Clay had been a considerable contributor to the Clinton reelection campaign.

I later learned my case had been discussed in Washington. I couldn’t ever prove Clay’s contribution had any effect on the FBI’s decision, but I have always been suspicious. We discussed the possibility of suing Clay, as their paper represented over 50 percent of our business. But we were financially outgunned, and it would have been a futile attempt.

Word spread in the industry that we were being cut off by Clay, and the vultures began to circle. One of these vultures was Continental Paper, which supplied us with our newsprint. Continental didn’t cut us off like Clay, but severely cut back our allocation. They intended to take the lion’s share of the business and place it within their own established network of distribution, thereby manipulating the market and, again, illegal.

So, in a very short time period, our paper supply began to dry up. The final bomb was dropped at the end of May 1995. We had started doing business with Troy Printing in 1993. At first, Bob and I were leery of pursuing the business. We knew it had the potential to increase our monthly sales by $500,000 per month. Our bank examined the audited financial statements from Troy Printing and concluded the client was financially sound. The bank even extended our credit line to accommodate the new business. Troy Printing was so big it dramatically changed our financial position. We immediately started taking orders, and their checks always arrived on time. We thought it was a godsend.

It was on Memorial Day 1995 when I noted that Troy’s check hadn’t arrived yet. I kept a close eye on their account because of our financial investment in them. I made a personal call to their CFO and inquired as to their payment. I had what I thought was a good personal relationship with him. He affirmed that a check for $500,000 was going out that day, and I didn’t doubt him. Based on his affirmation, I released their next month’s allocation, which totaled another $500,000.

Several days later, I noticed their check never showed. I placed another personal call to the CFO, but this time he wasn’t available, and neither was any of the other top management. It was my first sign that Troy Printing was having problems, and it was only a matter of a few weeks when the ugly truth surfaced. Troy’s bank had done a random audit and discovered the books had been cooked. Their bank immediately seized all their cash and assets and cut off their line of credit. Unfortunately, we were owed a cool million dollars!

We filed a fraud and a mail fraud complaint against Troy Printing with the DOJ; however, to the best of my knowledge, no one was ever convicted or even investigated. We will probably never know who cooked the books, Troy or their accounting firm. It’s hard to believe that any qualified firm auditing their books didn’t find what the bank so easily did.

Even if we had been able to recover the money, M & P could not have survived without a paper supply, but Bob and I could’ve paid everybody off and had a million dollars to go home with. What we needed was the Feds to enforce the antitrust laws, fraud laws, and mail fraud laws. Much to everyone’s surprise, the Feds just weren’t interested. Bob and I had been swindled out of a million dollars and were having our company stolen from us.

I believe what was done to us was a political crime. The separate incidents that formed that perfect storm had become a death sentence to my company. In my opinion, the Feds’ refusal to respond to Troy Printing’s fraud and Clay’s anti-trust violations were, at best, gross negligence and probably government corruption. It’s my belief the Clinton Administration had given Clay a pass on their actions and the DOJ had been told not to interfere. It’s the only reason my case would have been discussed in Washington. I was the only one who made trouble.

My partner and I discussed at length what options we had and determined the answer was none. A civil action was out of the question as we were financially outgunned and didn’t have the time. The Clinton Administration was pulling all the strings, and we were expected to grin and swallow it. Make no mistake, this wasn’t just an attack on me, but an attack on a total of about thirty-five different companies. Of all the victims, it was M & P that was hit the hardest, and that’s because Clay (Milwaukee) was a sole supplier. With no other available avenues, the end of October was to be the end of our business. The $1.2 million of equity was going to be lost. I was losing my money, my company, and what could have been.

The fact that greed and corruption were the cause for my partner and me losing everything infuriated me. And just to add insult to injury, neither Milwaukee nor Troy was ever prosecuted or even investigated. Regardless of the evidence, the Feds felt it was unworthy of their attention. The government’s lack of interest had made it a game of every man for himself.

Those being the rules, I decided the time had come for me to learn the game. I was determined and angry. I decided I wasn’t going to be robbed without attempting some form of self-defense. I wasn’t sure just what I was going to do or how I was going to do it, but I needed something that would both defeat the perpetrators and save the company or rescue the cash that I felt was mine. So I started thinking, and this is when my trouble really began.

Needing advice, I made an appointment with Steve Smacky, a prominent lawyer in Indianapolis. Steve and I had known each other for years and played golf together. Steve’s practice was business law, specializing in bankruptcy, and at that moment it’s exactly where M & P was headed. In that first meeting, all the discussions were about the inevitable coming bankruptcy, but in my heart, I just couldn’t accept that. Years of aspirations and hard work were suddenly on the line.

Betrayed by those I’d trusted and the blind eye of a federal government had filled me with unshakeable resolve. The Feds’ lack of interest and the thought of losing my company left me nowhere else to go but on the offense. The next few evenings were spent reflecting on recent events. And as always, in moments of indecision, I would pace my neighborhood throughout the night while sipping a cup of coffee. The quiet and solitude of darkness allowed me to think clearly and calmly while mentally sorting different ideas. But as I thought and deliberated, the consciousness of creating an unchangeable result was giving me pause. Leverage was needed, and that’s what I was searching for, but each idea projected visions of disaster, continually leaving that right answer just out of reach. Night after night, one thought kept haunting my mind: the impunity of which my adversaries had acted.

Then one night, while pondering what to do, a fresh thought entered my mind. The paper mills involved were not risking one dollar or the sale of a single pound of paper. It was that nagging thought that became the catalyst for the developments that followed. The mills had been in a position of all gain and no pain. Finally, it had become clear that if a cost of consequences could be added to their side of the equation, attitudes might change. If an expensive price tag was attached to their arbitrary decisions, it might give them a sobering pause.

M & P’s adversaries were holding all the aces, but they violated rule number one—giving credit to a man they’re trying to hang. We owed a total of $1.6 million to those two mills, making it the best tool in the box for leverage. If all the cash were stripped from M & P, the mills would lose the opportunity to collect the $1.6 million. This was the leverage for which I was looking. My hope was to buy time while waiting for a change in the market or secure a one-year extension of supply.

Again, I spent the next few nights pacing while drinking my coffee, and even though I was so determined, I was honestly scared. It was never my original intent to go nuclear; however, unwilling to walk away broke, there were no other options. Naïve and unprepared for such a situation, I returned to Steve Smacky to reenlist his help. If there was any way to do it legally, Smacky would know how.

It was on a Monday morning when we met behind closed doors. Foregoing our usual chitchat and normal pleasantries, I cut right to the chase asking for legal advice on how to strip my company. In those few brief minutes, I explained why it was important that the company be broke. My debt could be used as leverage or, better yet, as golden handcuffs, forcing a continuation of supply until the market changed. When the market changed and new suppliers were recruited, the money would be repatriated, and the two mills would be paid.

Steve then asked, And what if it doesn’t work?

I replied, As long as you can keep me legal, I’ll keep the cash as a goodbye kiss from my friends at Clay and Continental Paper.

The meeting finished with Smacky’s final comments: Stripping the company won’t be difficult but must be done quietly. Not paying your bills is not illegal, but if detected, you are sure to have a civil case long before the job is done. I have contacts on the Isle of Man that can help us with the details. Should your golden handcuffs idea not go as planned, you will need to disappear at least until the creditors lose interest in you. Europe is my recommendation, and you can’t sue whom you can’t find.

Smacky wasn’t beating around the bush. He laid out all the good, bad, and ugly in just a few minutes. The entire meeting took no more than twenty minutes. Looking from afar, it’s hard to believe I thought Smacky had actually given me good legal advice, but because he was a prominent lawyer in town, I truly believed and even felt it was moral.

At that point, I was beyond reconsidering, but I hadn’t yet spoken to Bob or my wife. That weekend my wife, Nella, and I talked about it over dinner; and although apprehensive, she said okay. From that moment on, our course was charted, and there was no turning back.

The Plan

It was time to talk to my partner, Bob. Bob had been a great partner and became a good friend. He didn’t