Peter R. Morris is the Chicago businessman who wants to subdivide Lake Valhalla. I learned his name the hard way.

Visiting my mother and grandmother in Santa Barbara in 1994, I was aghast to find out that that they were in financial straits. When my grandfather died in 1981, he had the consolation of knowing that the income from the survivors’ trust, safely invested in government securities and municipal bonds, assured his widow and daughter a decent retirement for as long as they should live.

In 1987, a man with tender regard for elderly congregants began attending their church. He was the vice-president of the branch office of Prudential-Bache, and he soon persuaded my mother and grandmother to transfer all their survivors’ assets into a Pru-Bache account, where "they would be safer." Within two years, their financial advisor had put 93 percent of my mother’s and grandmother’s combined assets into nine limited partnerships (LPs), all of which he characterized as "absolutely safe, with preservation of principal guaranteed."

My mother and grandmother had fallen prey to the biggest corporate fraud in US history- the Prudential-Bache swindle that targeted the elderly and naïve and bilked them of their retirement funds by selling them 701 essentially worthless LP products under color of absolute safety and certain return. Of the $8 billion that was pumped into Pru-Bache LPs between 1980 and 1990 by 600,000 small investors such as my mother and grandmother, only $3 billion was returned in distributions - 38 cents on the dollar - before the whole grossly overleveraged scheme collapsed and the LPs were exposed as instruments structurally designed to enrich Pru-Bache and their LP general partners by gutting the gullible.

According to two critically acclaimed books on the Prudential scandal - Kurt Eichenwald’s Serpent on the Rock and Kathleen Sharp’s In Good Faith - the second biggest general partner in the Prudential-Bache LP program, accounting for 16 percent of LP product sold by Pru in the 1980s, was the high-flying Chicago-based real-estate syndicator, VMS. They report that Pru-Bache sold $1.3 billion of LPs in eight interlocking VMS funds under the sponsorship of VMS Realty Partners; and that the VMS LP products, peddled by Pru-Bache as ultra-safe instruments suitable for conservative investors, were ultimately revealed to be "junk," trading publicly for 4 cents on the original purchase dollar.

The man who founded VMS Realty Partners in 1979 and who served as chairman of its executive committee and co-headed its daily operations throughout the 1980s was Peter R. Morris. (The "M" in the acronym "VMS" stands for "Morris." Similarly, "PRM" is an acronym for "Peter R. Morris.") Sharp writes in her book (ibid., p. 35): "While VMS investors fretted at their failing funds, Morris remodeled his mansion outside Chicago, installing marble floors, servants’ quarters, and a 12,000-bottle wine cellar."

Robert Hutchinson

Garrison