[The purported Safe Island City of Pakistan’s property tycoon Malik Riaz seems to have come crumbling down to earth with the recent article published in Miami’s New Times which reveals that the proposed falmboyunt financier of the project Thomas Kramer known as TK is heading for bankruptcy.
The Spokesman has been credited in this detailed news feature by none other than a lady reporter of Miami’s New Times Lera Gavin, who once worked for the notorious and scandal-marred TK. Given below is the transcript of the NT’s article for our readers to guage for themselves that why Malik Riaz was reveling with devil. Named by the writer as Sultana Daku (equivalent of Robin Hood of the west), the narration details Malik Riaz’s shenanigans and his blood-filled path to power corridors. ]
Red-eyed with exhaustion, Thomas Kramer slumped behind his empty desk. The real estate tycoon had been up all night worrying about how to break the news to his employees. As they filed in, he reached across the desk and grabbed a bottle of pills. Behind him, green lights blinked on an oversize map, indicating the dozens of exotic locales he'd visited. But the shell-shocked look on his face made the towering, blond German look less a glamorous entrepreneur than the general of a defeated army.
It was a Thursday morning in early March, and Kramer had called an emergency staff meeting in his "war room," as he referred to the office in his opulent Star Island mansion. The seven-member team that gathered around him had known for months their boss was facing money problems. He was so short of cash, in fact, he'd borrowed money from friends and sold off his extensive watch collection to meet payroll. Until we marched into his office, though, no one knew just how dire the situation had become.
"I can no longer afford to keep you guys," Kramer said softly as he began to cry. "There are only so many watches I can sell. I feel like I have failed you all."
In the 12 months I'd worked for Kramer as his in-house writer, I'd witnessed firsthand his crippling mood swings, but I'd never seen him this depressed. "I see no other option," he sobbed.
That morning marked a new low in one of the most incredible rise-and-fall stories in Miami Beach's storied history of booms and busts. In the 1990s, Kramer was SoBe royalty, the man who'd spearheaded the South of Fifth revival and ruled from a waterfront mansion where wild shindigs sometimes turned into outright orgies. More than anyone, he symbolized an era of glamour, decadence, and carefree excess.
Now it was all over thanks to a Swiss court ruling in January that Kramer had to repay nearly $200 million to a German currency-printing dynasty. His appeals were up. Everything had to go — the house, the staff, the jewelry, the extensive cellar of vintage wine, even the taxidermied giraffe that greeted visitors in the hallway. Because of my job in Kramer's mansion, I had a unique front-row seat for his last days in Miami Beach. I saw one man's desperate efforts to salvage his name and his livelihood, afraid but hopeful that some last-minute opportunity would save him from financial ruin.
In fact, by the time he dismissed his staff, Kramer had already found the man he believed could be his long-shot savior: a scandal-tarred Pakistani plutocrat named Malik Riaz who wanted a partner to build a $20 billion island city in Karachi. Riaz, Kramer said that morning between sobs, was his last best hope.
"This is a once-in-a-lifetime chance to bring Pakistan back on the map of the leading nations in the world," Kramer later said of the project.
If he succeeds in Karachi, Kramer could pull off the ultimate coup in a career full of remarkable comebacks. If he fails, though, it's anyone's guess how low he could fall.
"I don't see any possibility of the island project materializing," says Amir Mateen, a Pakistani reporter who wrote a ten-part series about Malik Riaz for the Pakistani newspaper the Spokesman. "It has all the ingredients of a scam."
Thomas Kramer was a notorious figure even as a teenager. He was born April 27, 1957, in Frankfurt, Germany, and by the age of 13 he was making waves with a rabidly right-wing student newspaper he founded called Pausenzeichen, the German word for "recess" or "break."
As student protests raged against the Vietnam War, young Thomas watched cars burning in the street and police battling protesters, he recalled in interviews for his unpublished memoirs. Even though he had yet to visit the country, Kramer loved America, or at least the idea of America. To him it represented freedom and democracy, while the student protesters represented the opposite: the tyranny of East German-style socialism.
After his home was graffitied with threats tied to his newspaper, his father, a stockbroker named Willi Kramer, and his mother, Ingeborg, shipped Thomas off to Salem Boarding School, a posh private academy housed in a castle. Suddenly surrounded by students and teachers who agreed with his right-wing views, Kramer grew bored with politics. It was a move he'd repeat throughout his life. He thrived on conflict.
The judgment came January 13, nearly 21 years after Siegfried Otto had entrusted Kramer with 200 million Deutschmarks. The Swiss Federal Tribunal, the nation's highest court, was unequivocal: Kramer must now pay Otto's descendants the equivalent of $187 million.
It was Kramer's entire fortune and more — a stunning result that came from nearly two decades of legal fighting in Europe that Kramer, amazingly, had somehow kept secret from nearly everyone who knew him in Miami.
Kramer's troubles, it turned out, began back in 1993, only a year after Otto had entrusted him with his money. That's when Otto got cold feet, confessed to German authorities that he'd hidden his untaxed fortune with Kramer, and then struck a confidential deal to avoid jail time by repaying 100 million Deutschmarks (about $71.4 million). That agreement was leaked to the German press two years later, forcing Otto to resign from day-to-day operations at Giesecke & Devrient.
What was less public was Otto's legal action after settling that massive tax bill: He asked Kramer to pay back the money. Problem was, Kramer had already spent about $100 million on land in Miami Beach. So, according to Swiss court filings, Kramer returned just $20 million and refused to refund the rest. After negotiations between their lawyers failed, Kramer filed a preemptive lawsuit in July 1996 with the circuit court of Zurich claiming he was "maliciously misled during contract negotiations" with Otto in 1992 and didn't owe him anything.
Otto countersued the same year, demanding the return of all his funds plus interest and an accounting of how Kramer had spent the millions. The next year, the Swiss courts dismissed Kramer's lawsuit and sided with Otto. Whether the money that Otto gave to Kramer constituted a loan, as Otto maintained, or a gift, as Kramer claims to this day, became the basis of a string of unsuccessful appeals that would consume Kramer behind the scenes for the next 15 years.
When the 82-year-old Otto died after a series of strokes in 1997, his surviving daughters inherited their father's business and continued his lawsuit. Verena von Mitschke-Collande, the current owner of Giesecke & Devrient, and Claudia Miller-Otto, a philanthropist and abstract painter who lives in Key West, weren't willing to forgive such a colossal debt. (Both sisters declined to be interviewed for this story.)
On January 9, 2003, the Zurich High Court dismissed Kramer's appeal. To ensure that the Swiss judgment stuck, the heirs took their case to Miami. On April 13, 2007, Miami-Dade County Circuit Court decided the ruling was "an enforceable judgment of this State of Florida." The Otto sisters also targeted Kramer's London assets. A British judge froze $10 million of Kramer's property in 2007.
Despite losses on two continents, Kramer refused to give up. Within months of the Florida verdict, Kramer's lawyers petitioned the Florida Supreme Court to strike it down. In August 2009, the court denied Kramer's petition for review.
Finally, this past January, the legal drama reached its long-delayed climax when the Swiss Federal Tribunal ruled Kramer's final appeal was "without merit" and told him it was time to pay up. The Otto clan had at last prevailed against the man who'd taken their millions to Miami.
"It wasn't a matter of principle," said a source connected to the lawsuit, who requested anonymity because of ties to the Otto family. "It was definitely over the money. Two hundred million dollars isn't loose pocket change."
In the weeks after the news, Kramer's two decades of dizzying excess quickly evaporated as he scrambled to meet the Swiss judgment.
I spent February, the month before the teary meeting with his staff, covered in paper dust in a small side room with two shredders while helping Kramer eradicate 20 years of his life. Boxes of documents — party invitations from the 1990s, receipts for dinners from fancy restaurants, photographs of Portofino Tower — reached almost to the ceiling. I shredded so much that sanitation workers complained about having to haul it all away. Kramer would occasionally pop in. Humiliation welled up in his eyes as he watched his empire being slowly dismantled.
As the day of his departure to Pakistan drew closer, he became more depressed. The usual stream of gold diggers that flowed into the mansion now slowed to a trickle, though the occasional bimbo sheepishly clad in Kramer's custom-made shirts reading "Good Girls Go to Heaven, Bad Girls Go to 5 Star Island" would wander around the grounds. I genuinely feared that Kramer might harm himself. The death of his beloved father, Willi, in 2012 had forced him to confront his own mortality, and in the wake of the Swiss decision, he began to talk openly about taking his own life. I worried that one morning I might hear a shot coming from the walk-in safe upstairs where he stored his guns.
But Kramer soon announced he'd found one last chance to salvage his career: He was pinning all his hopes on Malik Riaz. The night before he left for Karachi, Pakistan, 200 friends gathered at his mansion to drink champagne and wish him bon voyage. "It's like being present at my own funeral," he told me.
The down-on-his-luck businessman had reason to be apprehensive. His plan reeked of desperation: Riaz, a notorious property tycoon, wanted to partner with him to build Safe Island City, which will supposedly boast the world's tallest building and the world's largest shopping center — all on the outskirts of Karachi, one of the world's most dangerous cities.
Kramer had met Riaz in Pakistan in 2010 through a mutual friend in Islamabad. The two struck up a relationship, and after a real estate company owned by the Abu Dhabi royal family backed out of a deal to finance Safe Island City in February, Riaz asked Kramer to come aboard. (Riaz didn't respond to requests from New Times through an intermediary for an interview.)
Riaz, who likes to portray himself as Sultana Daku — a Pakistani version of Robin Hood — has been publicly accused (though never convicted) of crimes ranging from forgery and extortion to kidnapping and murder. Last May, a fellow land developer named Dr. Shafiqur Rehman filed a petition with the Supreme Court of Pakistan charging that Riaz, with help from the police, had tried to frame him for the killing of one of Riaz's bodyguards in August 2008. He also claimed Riaz was responsible for the deaths of Lt. Gen. Imtiaz Hussain and Dr. Mansoor Janjua in a dispute over a land deal in Lahore. (Those claims, which Riaz has denied, are pending in court.)
Critics, though, say Riaz has skirted convictions only because he's too powerful. In June 2012, for instance, investigators tried to arrest Riaz in Islamabad on the orders of a special anti-corruption court, but the local cops prevented the tycoon from being taken into custody.
According to Amir Mateen, the reporter for the Spokesman, the Supreme Court of Pakistan has heard hundreds of cases alleging criminal misconduct by Riaz's company Bahria Township, "mostly involving land-grabbing where [Riaz's] goons forcibly took away land from poor people to build houses, some of which cost as high as 220 million rupees — the Sultana Daku in reverse."
Kramer was willing to ignore those dangers. He had no stable income. The businesses he ran didn't bring in much money, and his Star Island mansion was on the market for $55 million, but without any serious offers in sight. The Pakistani project could either be a glorious final coup for the investor or serious trouble.
"The deal better go through," Kramer told me in the kitchen during his going-away gala. "It's either that or a bullet to the head."
Just two days after leaving Miami on March 12, Kramer signed a memorandum of understanding with Riaz while surrounded by flashing cameras in Karachi. Kramer told a roomful of journalists that he "is spearheading a syndicate that is planning on investing $20 billion over the next five to ten years."
Where would Kramer get $20 billion for such a risky project? Already, Pakistani regulatory authorities have fined Riaz's company for fraudulent advertising and for illegally receiving public money in advance for a project that is still a long way from breaking ground.
Still, in a way, the partnership makes sense, because Riaz wants a sheen of Western backing and Kramer needs his name on a real project. "I think the deal is mutually beneficial," Mateen says. "Malik Riaz wants to use the name of an investor who turned around part of Miami, and Kramer will either make money if the project goes well without spending much or still gets compensated in some ways."
Kramer briefly flew back to Miami Beach in early May to oversee the auction of his mansion's contents. Buyers could bid on everything: his taxidermied German shepherd, a portrait of Joseph Stalin that once hung in the cigar room, a statue of Ben Franklin that used to sit in the courtyard. How much did he make? Kramer won't say.
Indeed, he refused to comment for this story when reached by Skype from the Cannes Film Festival last week.
"I don't want to talk about my past. You fucking worked for me for a year — you should know all this!" he yelled. Then he softened his tone. "Bye, love you. We'll talk when the article comes out."
The mansion, home to two decades of bacchanals, now sits empty awaiting a buyer. Meanwhile, Kramer's legacy — the luxury real estate market he helped pioneer in South Beach — is again surging with buyers from Russia and Brazil snapping up apartments. The price of land in SoFi has increased tenfold since Kramer began buying properties in the neighborhood.
Anyone in danger of forgetting who he was and what he meant to South Beach in its '90s heyday has only to look at the skyline of contemporary Miami Beach, where Portofino still looms as the tallest building in South Beach, a monument to one man's arrogance and perseverance.
As party promoter turned property developer Michael Capponi says: "His initial vision of South of Fifth Street helped reshape South Beach into what it is today."