One of the freakiest — maybe the freakiest — things about this recession is how it has revealed the extent to which everyone in this country has been living beyond their means, even the people that you would least expect to be. Last year, it was reported that Goldman Sachs was bailing out employees who had overspent in the overheated market. And this Wednesday, Richard Fuscone, a former top executive at Merrill Lynch who retired to "pursue personal and charitable interests" in 2000, declared personal bankruptcy in order to stop the foreclosure of his 18,471-square-foot, eleven-bathroom Westchester mansion. "I have been devastated by the financial crisis which came to a head in March 2008," Fuscone wrote in his bankruptcy filing, which was obtained by Daily Intel. "I currently have no income."
We aren't quite sure what led him to this point, but from what we've found, it's shaping up to be a weird little story.
Fuscone, who has an M.B.A. from the University of Chicago and attended Harvard Business School, had a brush with the law in the early nineties — he was accused, along with other executives at Merrill, of securities fraud, for selling Orange County, California risky derivatives that caused it to go bankrupt. But he went on to become a shining star at Merrill, and eventually worked his way through the ranks to become their head of Latin America.
"Mr. Fuscone's group has consistently developed innovative products that are attractive to corporate sellers and investor buyers," wrote Crain's, which included him in their "40 Under 40" list in 1991, adding that Fuscone was "viewed by company insiders as a winner." Upon his retirement, then-CEO David Komansky praised him for his "business savvy, leadership skills, sound judgment and personal integrity."
Fuscone was also active philanthropically. Just five years ago was being feted for making a major donation to the Juvenile Diabetes Foundation. He even started an investment-advisory firm, Dover Management, specifically to take positions in ethical companies. Ethical companies, however, did not make the kind of money that could keep Fuscone in the lifestyle to which he had become accustomed, so he eventually joined Greenwich securities firm Weeden & Company as the managing director of their fixed-income division.
It's unclear when that position ended: The person who answered the phone at Weeden & Company confirmed to Daily Intel that Fuscone no longer worked there, but wouldn't comment further and hung up when pressed.
Clearly, something went very wrong. This past summer, Fuscone and his wife, Marjorie, were forced to sell their 5.5-bath home in Palm Beach, which they'd purchased in 2003 for $4.85 million, for $4.61 million, following a foreclosure action by Northern Trust Bank.
Soon after, in November, the Fuscones listed their Armonk, NY, mansion for $13.9 million, in hopes of avoiding foreclosure. But no one, apparently, was in the market for a mansion with two swimming pools, two elevators, six fireplaces, eleven bathrooms, and a seven-car garage, forcing the Fuscones to declare bankruptcy just to stop their lender, Houston-based Patriot Bank, from foreclosing and keep a roof — or, from looks of the picture, roofs — over their heads.
Also on Fuscone's list of creditors owed: Mercedes, Saks, and J. Crew.