Unreal Estate by Michael Gross

Author:Michael Gross [Gross, Michael]
Language: eng
Format: epub
ISBN: 9780767932660
Publisher: Crown Publishing Group
Published: 2011-11-01T04:00:00+00:00

Beverly Hills

Grayhall (1100 Carolyn Way)

Playboy magazine founder Hugh Hefner bought what had once been Arthur Letts Jr.’s estate in Holmby Hills for the record-setting price of $1.05 million in February 1971. A month later, George Hamilton sold Grayhall to Bernie Cornfeld, an Istanbul-born, Brooklyn-bred financier. It probably wasn’t a coincidence.

Apart from being competitive friends, Hefner and Cornfeld were both empire builders, though they built very different empires. Hefner’s Playboy is today a shadow of its former self, but is still a formidable brand known around the world, and its eighty-five-year-old founder remains a world-class celebrity and renowned, if Viagra-assisted, rake; he also remains in residence in Holmby Hills. Cornfeld, on the other hand, is long dead, and his biggest brand, Investor Overseas Services (or IOS), a force in mutual funds, is forgotten, known if at all only to students of business history or, more specifically, the history of business frauds. Its collapse coincided with Cornfeld’s arrival in Beverly Hills. Like so many before and after him, he’d come there to reinvent himself.

Reinvention was Cornfeld’s specialty. He’d done it himself, and he’d done it for the many who believed in him, believed he would make them wealthy beyond measure, believed in the promise contained in the line he used as he raised billions of dollars in the mid-1960s, “Do you sincerely want to be rich?” Cornfeld was briefly the King of Finance. Grayhall was supposed to be the stage for his next act. Instead it became the scene of his downfall.

It may have been inevitable that Bernie Cornfeld ended up in Beverly Hills. His father, Leon, had been an actor and a film producer, a Romanian-born Louis B. Mayer with offices in Vienna and Istanbul, where Bernie was born Benno Cornfield in 1927 to Leon and his second wife, Sophie, a Russian. Two half-brothers from Leon’s first marriage ended up in the movie business. After an accident ended his acting career, Leon and Sophie moved to America, where Leon briefly taught German literature in Rhode Island until the Cornfields separated. Sophie then took Bernie to Palestine for a year before returning to live in Brooklyn, where she worked double shifts as a nurse while Bernie, her only child, attended public school, sleeping at night in the same room as his mother until he was fifteen years old. As a boy, he said, he collected spare change on behalf of the Abraham Lincoln Brigade, which fought against the fascists led by Francisco Franco in the Spanish Civil War; this early commitment to progressivism would later return as a sales pitch: he called IOS “people’s capitalism,” designed to “convert the proletariat to the leisure class painlessly.”

Plump, shaped like a fireplug, and standing only five feet five inches, Cornfeld—when he changed his name is unknown—grew up the center of his mother’s attention. He earned pocket money working for a fruit stand, selling lollipops, and running a guess-your-weight-and-age concession at Coney Island. Years later, a carnival scale would grace Grayhall as a reminder.

Cornfeld spent at

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