Some 30 or 40 years ago a  man named DeAngelo (defruded banks of
manyfirst name not known to me)defrauded banks of many millions of
dollars by claiming huge storage tanks contained olive oil while they
were almost empty.  His scheme was eventually uncovered and he went to
jail. Can you help me find the story?

Hi frankie13,

The guy you're wondering about was Anthony "Tino" De Angelis who was
president of Allied Crude Vegetable Oil (ACVO) which operated out of
Bayonne, New Jersey in the 1950's and 1960's. De Angelis got large
banks like Chase Manhattan to float his company large loans secured by
tanks full of virtually nonexistent salad oil. Better yet, he got
American Express to certify the existence of his "inventory".

This scandal broke in November of 1963, resulting in a loss to
American Express of $58 million which they had to pay to creditors who
had made loans based on the phony salad oil. Stock in American Express
plunged nearly 50% as a result of this debacle.

How, you ask, was ACVO able to hoodwink AE so dramatically? Because
oil floats on water, it wasn't really very difficult. They just filled
tanks with water, put a couple of feet of real oil on top and, voila,
a tank "full" of oil. Even more brazen, sometimes he'd use the same
oil in more than one tank by pumping it from one tank to another while
he took the AE inspectors to lunch.
This article by John Waggoner in USA Today summarizes the scam:
http://www.investopedia.com/offsite.asp?URL=http://www.rgj.com/news/stories/html/2002/01/26/6753.php

The total fraud was reportedly about $175 million:
http://www.investopedia.com/terms/s/saladoilscandal.asp

As you might imagine, Mr. De Angelis, born in 1915, had a colorful
(and shady) business background. He rose to financial success in the
meat packing industry in 1938 by dealing in frozen rather than the
then-customary fresh beef.

He got into the vegetable oil business in about 1952 where he once
again was successful. By the late 1950's, ACVO held 75% of the
overseas market for American salad oil.  The problem was, although De
Angelis clearly was a shrewd businessman, he couldn't seem to
consistently do things honestly and ended up being fined for tax
evasion and falsification of shipping documents to defraud the
government. But, he paid his fines and stayed in the game. For a
description of Mr. De Angelis' business dealings, this article by
Schon G. Condon is good:
http://www.jonescondon.com.au/articleview.asp?key=35

Here's the second half of the article:
http://www.jonescondon.com.au/articleview.asp?key=32

My favorite passage from that article: "The farce continued with the
American Bureau of Statistics reporting that the tonnage of edible
oils handled by Allied was greater than the entire edible oil
production of the United States. An amazing feat for a company
established to export excess US production! Yet again no one took any
notice whatsoever."

Enron anyone? WorldComm?

Mr. De Angelis' underhanded dealings ultimately resulted in the
overnight collapse of the Futures Market and a ten year prison
sentence for him.

If you want an even more detailed account of this famous fraud, you
can read "The Great Salad Oil Swindle" by Norman C. Miller, who won a
Pulitzer prize for his coverage of it. Here's a site for purchase of
this scarce book, but be forewarned - they want $150.00 for it!
http://s1.amazon.com/exec/varzea/ts/exchange-glance/Y04Y6512665Y0814949/qid=1039734470/sr=1-1/104-1868850-8905531

Thanks for your question about this fascinating individual and
American business catastrophe.

If you have any questions about my answer, please post a Request for
Clarification before posting your rating of it.

ericynot-ga

Google search terms used:  salad oil fraud

I was trained as a credit officer at Chase in 1973, when the American
Express Bonded Warehouse Company (the entity that certified the
presence of all that fictitious salad oil) case was used for credit
analysis. It was a frontispiece of the Three C's of credit
(1.Character- criminal records may not be good to have, 2.
Capacity-lend to entities whose resources can manage repayment and 3.
Common Sense- it may not be wise to finance more salad oil than exists
in the US). It seems that most bankers forget the Three C's at least
once per decade.