Hoop Schemes

There are a couple of tricks to separating investors from their money.

The first is to offer better returns than they can get elsewhere.

The second is to create such a strong bond with them that they forget to ask basic questions. Shared interests—church, social clubs or even political organizations—often create such relationships.

Starting in 2001, a local man named James Ray Mast let it be known to an intimate circle that he could earn extraordinary profits—more than 100 percent annually—with little risk.

The bond Mast had with his investors?

Basketball.

Not pro basketball, a cynical business tarnished by too much money and too little connection to the average fan.

Instead, Mast penetrated the upper reaches of Portland's amateur youth hoops fraternity, where men worship younger, better versions of themselves and prodigiously gifted teenagers compete for Division I college scholarships.

"It's a very close-knit, secretive world," says Allan Classen, former editor of Prep Basketball Oregon magazine. "It's an incredibly organized system for getting the best players into colleges—but it all happens beneath the surface."

Mast made himself part of that world in a variety of ways. He sponsored traveling teams for some of the state's top middle-schoolers. He bought part ownership in The Hoop in Beaverton, where six side-by-side courts make up what Classen calls "basketball central." He even took over Cascade Sports Camp, the state's oldest and most revered basketball academy.

Last week, however, authorities hauled Mast, 42, into federal court in Portland, where he pleaded "not guilty" to charges he duped investors out of more than $4 million.

"I guess the reason we trusted him was he shared a real interest in basketball," says legendary Oregon high school basketball coach Barry Adams, who invested with Mast.

"I would never have thought that people exist who do what he did," says Annelies Kloosterman, a 58-year-old Lake Oswego consultant who gave Mast $455,000. "I feel incredibly stupid and angry to think that I was so gullible. And so greedy."

In many ways, March 12, 2005, should have been the best day of Jim Mast's life.

On that day, Oregon's two top high-school boys' basketball programs battled on University of Oregon's McArthur Court for the state championship.

In one of the greatest comebacks in recent Oregon prep history, Jesuit rallied from a 17-point halftime deficit to stun Lake Oswego, 57-53. Jordan Mast, Jim's eldest son, scored 15 for Jesuit.

The win cemented Jim Mast's place in Oregon's elite amateur basketball royalty.

A lifelong hoopster whose skills remained sharp even as he packed nearly 300 pounds onto his 6-foot, 6-inch frame, Mast had coached several of the Jesuit players when they were middle-schoolers.

For six years, he'd spent time and no small amount of money helping Jordan reach a goal that had eluded him—playing Division I college basketball. (Mast, who grew up in Kent, Wash., told friends he had been recruited but that a bike accident ended his scholarship hopes.)

Jordan Mast's performance at Jesuit and on summer travel squads landed him a spot on the team at Gonzaga University, the Northwest's top college basketball program.

"He was a superb defender and a team player who made everybody else better," Classen says.

By the time of that Jesuit victory, Mast had long ago figured out how to convert his basketball contacts into cash.

For at least three years, he had been successful at persuading those who knew him through hoops to invest with his firm or to help him find other investors.

One of the most prominent investors was Oregon's leading homebuilder, Wally Remmers, whose son Vic played on Jesuit's 2001 state championship team and later at Oregon State University.

And among Mast's first employees in his investment business was former NFL running back John Tarver, whose sons Josh and Seth starred on the 2005 Jesuit teams and now play basketball for OSU. (Wally Remmers and John Tarver could not be reached for comment.)

Mast's first employee, Dave Immel, was a storied figure in Oregon high-school basketball. A 6-foot, 4-inch sharpshooter, Immel led Hillsboro's Glencoe High School to a state championship in 1983, was named Oregon player of the year and later captained UCLA's basketball team. After a brief professional career, he came home to direct programs at The Hoop in Beaverton.

Immel, who has also coached both boys' and girls' basketball at Beaverton's Southridge High School and at numerous camps, provided Mast a way inside the small group of men who groom the metro area's top basketball talent.

"We all share a passion for the game, and when you meet others who do, you form an immediate connection," says Immel.

But by the time Mast watched his son and the other Jesuit players cutting down the nets at Mac Court, the connections Mast worked so hard to put together were falling apart.

In 2001, after shutting down a real-estate development business, Jim Mast began a new career: trading financial futures. Records show that he established a Nevada limited partnership called GlobalTech.

His system, he told investors, involved the buying and selling of stock index futures, which are contracts that mirror the movement of an underlying basket of shares. In letters to investors, Mast said his system operated with strict risk controls and was profitable every month.

Gary Gatewood, who worked for Mast, says Mast claimed previous experience in the financial services industry.

"Jim said he had worked at Merrill Lynch for years," says Gatewood, a former University of Oregon standout who was picked in the seventh round of the 1984 NBA draft by the Seattle Supersonics. "He had stories about being a top producer there."

Mast's story was good enough to convince Gleason Eakin, who founded The Hoop and Cascade Sports Camp along with Barry Adams. Eakin, 73, a former high-school football coach, had been a successful investor and property developer in east Multnomah County. Immel, who worked for Eakin at The Hoop, introduced him to Mast.

Eakin became Mast's largest investor—he put $790,000 into GlobalTech, he says. He also persuaded many others to invest.

"Gleason showed me his account statements, and he was making incredible profits, over 100 percent a year," says Don Wilson, a former aluminum company executive and neighbor of Eakin's who invested $300,000 with Mast.

Mast's basketball connections and pitch were aided by a lifestyle that bespoke success. He lived in a sprawling new 6,000-square-foot home on 40 acres in Hillsboro. He acquired a Mercedes and five other vehicles, bought a boat and two jet skis, and added a swimming pool to his property. When a friend needed money for a charter school, records show Mast gave him $25,000; when one of Jordan's travel teams needed cash, Mast wrote a $16,000 check.

People who already recognized him as a deeply committed basketball and family man—he and his wife, Joyce, had five children, all of whose names began, like their parents', with the letter "J"—didn't need much more proof than that to invest.

"He drove nice cars and had a nice house and family," says Dr. David Barney, a Beaverton dentist who met Mast when their sons were middle-school hoopsters and invested $100,000 with Mast. "Dave [Immel] told me, 'I don't know how he does it, but he's making lots of money."

The former big-time jocks Mast employed, including Immel, Tarver and Gatewood, added to his credibility.

Initially, he offered the men modest salaries and a chance to learn his trading system.

Mast instructed trainees in basic trading principles, but some of his methods, which relied heavily on "positive affirmations" and self-help, were decidedly unorthodox.

For instance, Immel says, Mast first ordered his trainees to read How to Solve All Your Money Problems Forever, by Victor Boc, a former talk-radio host on Portland's KPAM (860 AM).

Mast also regularly flew trainees to the MGM Grand Hotel and Casino in Las Vegas, according to Immel and Gatewood.

Mast would roll into town with his posse and zip around the neon city in a stretch limo. Mast claimed to have developed a betting strategy at baccarat and blackjack. One associate says he saw Mast bet $30,000 on a single hand of blackjack. (He lost.)

As something of a "whale," the industry term for big bettors, Mast got royal treatment at the MGM, according to Gatewood.

The ostensible purpose of the trips, the former trainees say, was for them to learn risk-management skills and practice Mast's betting system—using what Mast said was his money.

At the same time, Mast pushed his trainees to find investors. Immel did well on that score, persuading both his father and his father-in-law to each invest $75,000 in GlobalTech.

By the end of 2003, GlobalTech had raised nearly $5 million from about 45 people, according to records investors would later provide to authorities.

The investors included former Portland State football coach Mouse Davis, former Mount Hood Community College President Steve Nicholson, Willamette Week founder Ron Buel and Dr. Gary Delorit, co-owner of the East Portland Ear Nose and Throat Clinic.

Mast was nothing if not ambitious. "Our goal is to grow the pool of assets under management to $100,000,000 by the end of 2004," he wrote to investors in July 2003. "We are committed to transforming the way people think about money and investing."

The 34-page limited partnership document Mast gave investors was dense with legalese but lacked one basic component—Mast's background.

Had investors checked, they would have discovered Mast declared bankruptcy twice, in 1993 and 2001. He was so broke in 2001, in fact, that one of the few assets he declared in a bankruptcy filing was a cat, which he valued at $20.

Investors would also have discovered unsatisfied legal judgments and hundreds of thousands of dollars in tax liens from the IRS and state of Oregon.

They would have learned that Mast's home actually belonged to his in-laws and that his career at Merrill Lynch lasted barely 15 months and ended 15 years ago.

Apparently, however, nobody checked. Ironically, it was Mast's own disorganization, rather than his past, that torpedoed his scheme.

Initially, he mailed out professional-looking quarterly statements to investors. In 2002 and 2003, those statements invariably showed eye-popping returns.

"At one point my account [which started at $300,000] was up over $700,000," says Don Wilson.

After 2003, however, Mast struggled to provide account statements and began a string of letters and emails to investors giving excuses for why he was struggling to account for their money.

Throughout 2004, according to a chronology one of his trainees later prepared for investors, Mast rarely went to work and instead traveled frequently to Las Vegas, often accompanied by a Portland stripper named Marianne Ruiz. (Ruiz declined to comment.)

Toward the latter part of 2004, investors increasingly pressed Mast to return their money. Most got nothing.

"I kept after him and even came up there [from California] a couple of times," says Dave Immel's father, Jerry, who never received a penny of his $75,000 back. "But he always had some excuse."

In a March 30, 2005, letter to investors, Mast wrote, "I am still alive, haven't left the country or absconded with your money.... [But] the office was closed and I personally moved all the furniture and equipment out at the end of January."

Mast stopped short of telling investors their money was gone for good, insisting instead in an April 29, 2005, letter that accounting problems prevented him from giving them back their funds.

In May 2005, two months after Jesuit won the state championship, Jerry Immel filed a civil lawsuit against Mast in Multnomah County, in an attempt to recoup his investment. In response, Mast acknowledged that the bank account established to hold investor funds was empty and that he had provided "materially inaccurate" account statements.

The following month, Mast's wife filed for divorce, two months after their 20th anniversary. In the settlement, Mast claimed that, appearances notwithstanding, he was unable to pay any child support—a plea his wife accepted.

In the fall of 2005, investors hired Portland lawyer Michael O'Connor to investigate Mast's activities.

In an interview with O'Connor that November, Mast spun an incredible tale, O'Connor says. Mast claimed he'd taken $2 million to Las Vegas to invest with one Peter Arnold, whom he described as a high-stakes gambler and player in the pornography industry. But, Mast told O'Connor, Arnold took the money—which belonged to investors—and disappeared, perhaps murdered.

Based on the findings of a private investigator, however, O'Connor determined Arnold was fiction.

"His story was completely ridiculous," O'Connor says.

According to O'Connor, Mast later admitted that he'd gambled investors' money away in Las Vegas and lost several hundred thousand more in online sports betting. In all, O'Connor says, more than $4 million of investors' money was gone. (Some investors, including Gleason Eakin and Kent Jones—see sidebar on page 22—got part or all of their money back).

O'Connor says Mast was unrepentant.

"I think he felt badly that he'd gotten caught," O'Connor says. "And even worse about the prospect of our going to the authorities."

Mast pleaded with investors to allow him time to complete a top-secret deal that could allow him to regain some of their money.

"It's like being down by 15 points with a minute to go in the game and just giving up," he wrote to investors in early 2006. "It may be true that very few people ever come back from that kind of deficit but every once in a while the miracle comebacks do happen."

But in February, O'Connor turned over his findings to federal prosecutors.

"Mast has embezzled millions of dollars from GlobalTech investors," O'Connor wrote. "For some, he has stolen their life savings, their children's college funds and their hard-earned retirement savings."

On Oct. 19, the feds indicted Mast for mail fraud, wire fraud and money laundering. If convicted, he faces up to 20 years on each of 26 counts of fraud and 10 years for each count of money laundering but would probably serve far less.

The indictment alleges that far from earning profits in excess of 100 percent, Mast rarely traded at all and posted only one profitable month in four years.

"Mast did not use investor funds, sent in good faith, for their intended purpose," the indictment reads. "Instead, Mast used millions of investors' funds for personal expenses."

By the time high-school basketball practice started this week around the state, word of Mast's deceit had already spread through the hoops community like a virus.

Many of those Mast fooled still can't quite believe he would prey so cynically on his basketball connections.

"It's a small circle and very vulnerable," says Dave Immel. "The whole point is helping kids realize their potential, and I think that because of that, people are trusting."

Annelies Kloosterman is still certainly struggling to believe what happened. She first invested the $300,000 in retirement savings she had scraped together over 25 years, much of which time she spent as a single mother working full time. After account statements showed big profits, she and her new husband borrowed $100,000 to invest more. And after she was thoroughly convinced Mast was for real, Kloosterman gave him her daughter's $55,000 college fund.

"If I work the rest of my life, I'll never make that money back," Kloosterman says. "I told my daughter, 'You'll have to go to PCC now.'"

The Mysterious Mr. Jones

James Mast told at least three people that the first investor in GlobalTech was a friend named Kent Jones.

A onetime high-school hoopster, Jones, 51, of Vancouver, Wash., was known in local basketball circles for sponsoring amateur adult teams.

Something of an enigma to those around Mast, Jones was an expert poker player and JFK-conspiracy theorist who occasionally dropped by GlobalTech's offices or met Mast at Portland's Grand Cafe. Jones also regularly disappeared for weeks on end.

Now, it appears there is an explanation for his mysterious behavior.

On Sept. 12, the U.S. attorney in Idaho indicted members of a massive international drug ring whose members owned planes, boats and property worth more than $24 million.

The alleged kingpin of the 12-man group, many of whom grew up together around Roseburg, is Kent Jones.

Included in the 196-page indictment of the drug ring, in a section dealing with alleged money laundering, is a tantalizing bit of information: "Between 2001 and 2004 Kent Jones received over $350,000 from JRM [James Ray Mast] in the form of cashier's checks, checks and wire transfers."

Mast's 2001 bankruptcy filing contains another link between the two men—at that time, he owed Jones $65,000.

—NJ

Jim Mast declined to be interviewed or respond to written questions.

Barry Adams coached Dave Immel at Glencoe High. Adams recorded 656 career high-school victories, second most in Oregon history. Adams also co-founded The Hoop and Cascade Sports Camp, as well as the Les Schwab Invitational, which brings top national high-school teams to Oregon each winter.

Jim Mast told the owners of Cascade Sports Camp (located in Lyons, Ore., about 50 miles east of Salem) he'd put $300,000 into a GlobalTech trading account as a down payment and would use the earnings on that money to pay the balance. He defaulted, and the owners took the camp back.

Dave Immel was a two-year starter and academic All-American at UCLA. He played on the Portland Trail Blazers and Indiana Pacers summer league teams. He also played professionally for two years in Australia. Immel's father, Jerry, composed the music for many television series, including Dallas.

Investor Dr. David Barney first met Mast when their sons were middle-school hoopsters. Barney's son Darwin went on to become the starting shortstop on OSU's 2006 national championship baseball team.

In September 2003, when Jim Mast was still successfully soliciting investors, the IRS placed a $1.3 million lien against him in Washington County for unpaid taxes (the state of Oregon later placed a $326,000 lien against him, also for unpaid taxes).

WWeek 2015