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The golden fleece.(Aaron Tonken and charity embezzlement scandal)

Publication: Vanity Fair

Publication Date: 01-AUG-03

Author: Burrough, Bryan
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COPYRIGHT 2003 All rights reserved. Reproduced by permission of The Condé Nast Publications Inc.

By the time Aaron Tonken turned 35, his lifelong obsession with celebrities seemed to be paying off: somehow, the high-school-dropout loner had become a top Hollywood charity-event organizer, capping his resume with a glittering farewell salute to Bill Clinton. In fact, that 2001 benefit gala was the pinnacle of a multi-million-dollar scam that ensnared stars and politicians including Hillary Clinton, Diana Ross, Rod Stewart, Arnold Schwarzenegger, and the cast of Friends. With everyone from the F.B.I. to the I.R.S. investigating, BRYAN BURROUGH reveals how the A-list got taken

Of all the parties thrown in Hollywood that year, of all the fund-raisers and Oscar bashes and black-tie balls, the farewell celebration thrown for Bill Clinton two months after he left the White House was one of the splashiest. A charity benefit called "A Family Celebration 2001," the gala dinner was held Sunday night, April 1, the venue changed from U.C.L.A.'s Royce Hall to the Regent Beverly Wilshire's ballroom at the last minute.

The stars poured in. Sylvester Stallone was there in a tuxedo, chatting with his fellow honorees Betty and Gerald Ford. The evening's co-chairmen, Michelle Pfeiffer and her husband, Ally McBeal producer David E. Kelley, sat at Clinton's table, with members of the McBeal cast nearby. MTV's Carson Daly M.C.'d, and Elizabeth Taylor and Whoopi Goldberg made presentations, thanking Clinton for his years in office. And then came the music-songs from Dwight Yoakam and Ray Charles. Toward evening's end, Clinton put on a pair of Ray-Bans, grabbed a saxophone, and jammed for an uproarious five minutes with B. B. King, who then performed a bluesy "Let the Good Times Roll." The evening ended precisely at 10:50 with an energetic set by 'NSync.

For all the ex-presidents and celebrities who packed the Regent Beverly Wilshire that night, the star of the evening was a pudgy 35-year-old who nervously glided among the tables, leaning over to whisper in Clinton's ear, snapping at the security men, his eyes furiously scrunching in his trademark facial tic. His name was Aaron Tonken. He was the eccentric, up-and-coming Hollywood fund-raiser who had put the event together, luring Clinton, the Fords, 'NSync, and several Los Angeles foundations to participate in an evening that raised $1.5 million that Tonken would help distribute to various charities. "It was a miracle [it all] came off perfectly-to exec producer Aaron Tonken's credit," columnist Army Archerd raved in Daily Variety.

For Tonken, a high-school dropout from the Midwest, the gala capped a storybook 10-year rise that had taken him from a Los Angeles homeless shelter all the way to the White House. Many at the Regent Beverly Wilshire that night knew of Tonken's Zelig-like ability to befriend the stars and twist their arms into attending his events; he had done business with everyone from the Clintons and Fords to the cast of Friends, to Cher, to his close friend Natalie Cole. What almost no one knew was that Tonken's story had a chaotic dark side, that his world was slowly unraveling, that he was drowning in debt, that he had borrowed money from the wrong people, and that he would eventually be accused of looting the very charities he appeared to be helping. People knew even less about the suitcases of cash he ferried around town, his shadowy "investors," and his appetite for $3,000-a-night escorts.

Two years later a lot of money is missing, and so is Aaron Tonken, leaving behind a trail of angry charities, embarrassed celebrities, and myriad government investigations, plus one very difficult question to answer: "When I met the guy, I'm thinking, How does this schlumpy guy-five feet nine, like 240 pounds, dresses in a T-shirt, and has a twitch-how does he get all these people to give him all this money?" says Hollywood agent Norby Walters. "It just shows you how stupid people can be. You know, California, man, it makes people crazy, their brains get a little fried. You mention celebrities and it dazzles 'em. It goddamn dazzles 'em."

Tonken's is that rare story where serious Hollywood celebrities, serious Washington politicians, and seriously mysterious characters come together in a shadowy place that is now being explored by no fewer than six state and federal investigations. They include a lawsuit by the California attorney general, filed in March, that charges Tonken with stealing from a number of Hollywood charities; a related federal mail-fraud complaint in May; a Justice Department probe of fund-raising practices during Hillary Clinton's 2000 senatorial campaign; an F.B.I. investigation of the last-minute pardons President Clinton granted to Marc Rich and other criminals; an Internal Revenue Service investigation of gifts Tonken gave to dozens of celebrities; and a separate I.R.S. criminal investigation covering payments Tonken made to an interesting gentleman in Miami.

Growing up a lonely, celebrity-obsessed boy, Aaron Tonken achieved the American Dream, until people began asking where all the money went, at which point it became an American Nightmare. Mention his name around Hollywood today and his boldfaced friends scurry for cover. A partial list of those who populate his story, several of whom have been drawn into his scandals, would fill an issue of People magazine. In alphabetical order, they are: Paula Abdul, Roseanne Barr, Milton Berle, Red Buttons, the Clintons, Billy Crystal, Celine Dion, Michael Douglas, Betty and Gerald Ford, Michael J. Fox, Zsa Zsa Gabor, Al Gore, Kelsey Grammer, George Hamilton, Goldie Hawn, Gladys Knight, Nelson Mandela, Gregory Peck, Rob Reiner, Denise Rich, Ray Romano, Diana Ross, Arnold Schwarzenegger, David Schwimmer, Britney Spears, Rod Stewart, John Travolta, Tina Turner, and Mark Wahlberg.

But that story-the Drifter Who Swindled Hollywood-is only the tip of one very dirty iceberg. The rest deals with certain of Tonken's friends. Two stand out. One is his mentor, a fast-talking Hollywood player named Peter Paul, best known for masterminding the early-90s rise of the romance-novel cover model Fabio. Today, Paul, who has past convictions for fraud and cocaine possession, holds center stage in the last of the Clinton scandals-the probe of nearly $2 million Paul claims he gave Hillary Clinton's senatorial campaign in connection with a Tonken fund-raiser. Paul has plenty to say about Tonken and the Clintons via his lawyers, but not much himself, given the restraints of his new home, a Brazilian prison.

The other "friend" of Tonken's I stumbled upon in an odd way. When auditors went in search of money missing from A Family Celebration 2001, one discovered that several hundred thousand dollars had flowed through accounts controlled by someone named Stanley Myatt, who, when contacted, identified himself as Tonken's "money manager."

When I first heard Myatt's name, I had no idea who he was. A Nexis search turned up only a half-dozen articles, all but one involving an aging marijuana trafficker's attempt to murder Myatt in January 2001. That one, a clipping from the Philadelphia Daily News, reported court testimony given by a Philadelphia Mafia boss named Ralph Natale on April 4, 2001, just three days after A Family Celebration 2001. Asked whether he had ever made contact with the Russian Mafia, Natale answered yes.

The intermediary, he said, had been Stanley Myatt. He went on: Myatt "was an insurance scam man. He was a Wall Street scam man. He bootlegged cigarettes, years ago.... Made a huge fortune. He got into the marijuana business, and went away for a couple years. He came back, and he went to live down in Florida. And, he made a big connection with the Russian mob that come in through Florida. And him, himself, he came to see me at the Garden State Race Track a couple times, wanted to make a connection with us, the Philadelphia mob, with the Russian mob."

Other than identifying Myatt in a group of Philadelphia mafiosi frolicking at the New Jersey shore in 1997, that was all Natale had to say about him before going to federal prison. I soon learned Myatt and Tonken had been fast friends. Myatt, it turns out, had helped bankroll A Family Celebration 2001, providing more than $100,000 in cash, much of which Sylvester Stallone and Ray Charles were said to have demanded before they would appear. Myatt attended the benefit as well, sitting not far from Clinton.

What was the Drifter Who Swindled Hollywood doing with a character such as Stanley Myatt? Did Tonken simply have poor taste in friends? Or was Myatt a real-life incarnation of Get Shorty's Chili Palmer, an East Coast mafioso looking to rub elbows with the Hollywood elite? Or was something more sinister at work?

If you met Aaron Tonken just once, you'd remember him. Five feet nine or so, with weight that yo-yos from 240 to 280, he is a fast-talking schlemiel. Schlub. Loser. Those are the words people use. What they remember most are his facial tics-a scrunching of his eyes and a fast jerk of his head-which most people take as a sign of emotional turmoil. "He was a mass of facial tics, just ticky everywhere," remembers Sonia Nassery Cole, the C.E.O. of the Afghanistan World Foundation, which Tonken allegedly fleeced. "I mean, it's hard to concentrate when you're talking to him, there's so many tics. You can't even make eye contact."

After talking to more than 50 people who knew him, I am convinced that, for all his eccentricities, Tonken is a kind of genius. A flatterer, a sycophant, he zeroes in on the most important person at every gathering he attends and leans in close, ignoring signs of discomfort. Within minutes, intent on storming the gates of a V.I.P.'s reserve, he has a phone number, a commitment, a check. On the phone he is an unstoppable force, pestering secretaries until they put their boss on the line. A screamer, a pleader, given to mood swings so violent he has claimed to be bipolar, Tonken will do anything, give anything, say anything, to get what he wants.

"I remember, once I was sitting in his office, listening to Aaron trying to get Red Buttons to attend one of his parties," says Tonken's friend John Murphy. "Red kept saying no, he was busy. So Aaron says, 'Red, I'll give you a thousand dollars.' 'No, Aaron, I can't.' 'Red, I'll give you $5,000.' 'No, Aaron, I can't.' And the number kept going up and up until finally, of course, Red just gives in. He was at that party that night."

Needy. That's another word people use in describing Tonken. A bundle of insecurities, he has a gift for inspiring pity. Men, especially older men, wanted to mentor him. Women mothered him. A lavish gift giver-he thought nothing of filling one friend's living room with red roses-Tonken went through cash like water, handing out Hawaiian vacations like business cards and jamming $100 bills into the hands of friends just to have lunch with him. Even his least-observant friends believed he desperately wanted love and was willing to pay to get it.

To understand why, it helps to know his background. Tonken was born in 1965 in Windsor, Ontario. His father, Harvey, was a radiologist who worked at hospitals across the upper Midwest. The Tonkens spent most of Aaron's teenage years in Alpena, Michigan, a town on scenic Lake Huron, 240 miles north of Detroit. Aaron was a lonely kid with two older sisters, who was diagnosed with attention-deficit disorder and hyperactivity. His aunt and uncle, William and Michele Sills of Detroit, describe Harvey Tonken as a kindhearted workaholic who tried to make time for his son, and whose unorthodox religious views-he was a Jew who became a born-again Christian-left Aaron confused.

Aaron, who developed his facial tic at an early age, had a difficult relationship with his mother. She "used to get so mad at him-he had energy to burn," recalls Duane MacNeill, whose family lived down the street from the Tonkens' modern split-level home on Old Washington Street. "His mother liked the finer things in life, I'll tell you. The most expensive furniture, draperies ... you know. She wanted him to be a professional-a doctor-and Aaron fought going into that direction. He was rebellious. Toward her. Aaron wanted to adopt [me and my wife, Carol,] as parents."

Until Carol MacNeill died last year, in fact, Tonken telephoned her regularly. She was the first of many mother figures he adopted over the years. There are no pictures of Aaron in his Alpena school yearbooks, no mention of him in clubs or athletics. His obsession, from an early age, was celebrities: movie stars, politicians-anyone who was famous. By age 12 he was cold-calling Jacqueline Onassis and other celebrities. He hoped to get Dean Martin to perform at his Bar Mitzvah.

Tonken dropped out of high school, passed an equivalency exam, and then spent a semester at the University of Pittsburgh at Johnstown. As friends and family members tell it, the turning point in his life came when his father died of cancer in 1987. Then unemployed, and aimless, Tonken was living and bickering with his mother in Ohio. After one fight he left home-the Sillses say his mother threw him out-and drove to his aunt and uncle's home in the Detroit suburb of Southfield. "He drove to our house straight through, without...

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