12. Conning America’s Spies
Ronald Rewald solicited investments with a false claim that they were insured by the FDIC, and had 20% guaranteed annual returns. He used funds from new investors to pay the original ones, and splurged the rest on himself to live in luxury. A preliminary CIA check had uncovered Rewald’s criminal conviction, but the Agency declined to dig in deeper because he asked them not to. Instead, CIA agents wrote glowing reviews of Rewald, and recommended that his firm be used to furnish its spies with cover employment. CIA agents hired by the firm as cover were oblivious to the fraud all around them, and invested their life savings – and those of their relatives – in Rewald’s firm. Even the CIA’s Hawaii station chief was conned.
In 1982, the IRS grew suspicious and opened an investigation, but Rewald convinced the CIA to step in and get the taxmen to back off. Eventually, a dozen or more CIA agents were given cover jobs by Rewald. Some of them liked it so much, that after they retired from the Agency, they went to work for him for real. When the Ponzi scheme finally fell apart, one CIA agent was fired because he had gone out of his way to induce other spies to invest with Rewald. At least five CIA agents lost more than $300,000 – the equivalent of more than a million dollars in 2024 – of their personal money. Rewald was eventually tried and convicted on 94 criminal charges and sentenced to eighty years, but was released on parole after less than ten.
