I see by the Associated Press this morning that the SEC has charged a Haleiwa man with masterminding a complex scheme that, between 2007 and 2009, swindled investors out of $35 million. You’ve got to be impressed with numbers like that. But I was even more impressed (though not exactly surprised) when I learned that the alleged shyster was Nicholas Geranio, someone I’ve secretly admired, even though I only met him once years ago. And I’m not sure whether the current charges make me admire him more, or less.
I met Geranio in 2007 when I was working on a story about helicopter pilots in Hawaii. To get a good sense of that demimonde, I spoke to (and flew with) a lot of pilots: Coast Guard pilots responsible for offshore rescues around the Islands; contractors who ferry linemen and conservation workers up into the Koolau Mountains; doctors who live on Molokai but commute to work on Oahu; and an artist who once built his own ultralight and invented the $15,000 Range of Motion exercise machine you sometimes see advertised in the back of magazines as “the least expensive exercise you can do.” At some point in all this helicoptering, someone told me about a crazy guy up on the North Shore who kept a Robinson R-44 at Dillingham Field.
Even among the eccentric crowd of private helicopter owners, Nick Geranio stood out as a man who liked his toys. When I visited him at his Pupukea home, he had a pair of JetSkis in the yard; a rack surfboards, windsurfers, and SUPs in the garage (remember, this was years ago, before the current SUP craze); and, of course, there was the R-44, his second helicopter (the first, an R-22, was just a little too small to haul around surf photographers, a big Geranio hobby.) I remember, when we met, Nick was giddy about his latest toy: a tiny new rebreather to replace the bulky SCUBA gear in the garage. “Now,” he said, “I can swim underwater from Sunset to Waimea.”
This active lifestyle played a big role in the stories Geranio told me of about his youth and how he came to have a helicopter – stories I didn’t quite believe at the time, and now don’t know what to make of. He told me those stories a long time ago, so they’ve become a little fuzzy and I might get some details wrong, but I think they shed some light on how a man from Haleiwa could figure out how to wheedle $35 million out of a bunch elderly investors in Great Britain. Of course, whether knowing any of this makes Geranio’s purported crime seem more or less egregious is a different matter.
It started with deep sea diving. When he was still a kid, racing motorcycles in California, someone told Genario about the dangerous, but lucrative, profession of deep sea welding. Fascinated, he promptly went to deep sea diving school and got certified. Upon graduating, he headed off to Scotland. That was when they were building out the offshore oil fields in the North Sea, and Geranio claimed he spent several years there welding deep water pipelines for the oil companies. Sometimes, he said, he would spend several days at a time working on the seafloor, sleeping in a bell submersible to keep from having to surface and decompress. It was dangerous work – many divers were lost to accidents and madness – but it paid well. And because he worked so much overtime, and because he had no time to spend the money, by the time he quit he had a small fortune in his pocket.
When he returned to California, he said, he started racing Jet Ski’s for Kawasaki, eventually using his bankroll to establish Hayward Kawasaki, the largest Jet Ski dealership in California. That made him even wealthier, but also attracted the attention of Kawasaki executives in Japan. According to Geranio, one of those executives eventually used his influence to take over territory from Geranio, opening his own dealerships. Geranio moved on.
Around this time, Geranio got his first helicopter, which led to a growing interest in vertical take-off and landing (VTOL) vehicles. In the 1990s, Geranio and a colleague received a patent for a flying car. You heard right. Built around enclosed rotors (unlike the exposed rotors of a helicopter), Geranio’s flying car concept was the foundation for a company called Roadable Aircraft, which attracted military funding to build a prototype. As the co-inventor, Geranio served as vice president for product development, but, as he told it, he was eventually squeezed out of the company he created. At least one thing good happened at Roadable for Geriano, though. He seems to have met Keith Field, his co-defendant in the latest SEC case, while Field was Roadable’s senior vice president for marketing. It’s nice to have people around you you can trust.
Notice I said “the latest SEC case.” This is a story Geriano didn’t tell me all those years ago, but a quick Google search reveals why the SEC refers to him as a “recidivist securities law violator.” In 1999, the SEC accused Geriano and his new company, California Laser, of misleading investors by falsely claiming that the Star Trek actor James Doohan endorsed the company’s holographic imaging system. In a precursor to the $35 million swindle that the SEC alleges Geriano engaged in between 2007 and 2009, this story also involved boiler rooms and investor fraud. In the end, Geriano and California Laser admitted no wrong-doing, but a federal court did order the restitution of more than $2 million in “ill-gotten gains”, though the payment was waived because their “demonstrated inability to pay.” Presumably shortly after this ruling, Geriano moved to Hawaii with his helicopter.
You can see why Geranio seemed so implausible to me back then. Deep sea welding in the North Sea? Jet Ski racing and corporate intrigue at Kawasaki? Flying cars? Throw in laser holographs and a Star Trek allusion and the whole story takes on the air of a farce. And yet, Geranio told me his outlandish tales in the context of a man who had his own helicopter, who was buddy-buddy with the big wave surfers on the North Shore, and who pulled a brand new, top-of-the-line rebreather out of its box to show it to me. Under those circumstances, even if you can’t quite bring yourself to believe his stories, at least you suspend disbelief.
Which brings us to the current SEC filings against Geranio. On the one hand, the allegations paint Geranio as a liar and a cheat. I guess that’s a legal matter for the courts to decide, (it didn’t go so well for Geranio the first time around), but the charges do make you wonder how much, if any, of Geranio’s fanciful stories are true. And yet, many of the details of his stories are indisputable: there was a flying car (though Roadable is now a subsidiary of one of the shell companies sited in the SEC filings;) and, notwithstanding the bit about James Doohan, there is a company called California Laser (though they no longer seem to tout their hologram technology.) Even the latest case against Geranio, though it may blacken his moral, ethical and legal reputation (if that’s still possible,) it’s not clear whether it makes him more or less believable as a storyteller. In fact, the details of the case, as laid out in the SEC filing, describe a set of facts as elaborate and implausible as any story Geriano ever told me: Shell companies scattered around the U.S. that had no customers and sold no products; a string of accomplices buying and selling stock in those companies, at Geranio’s direction, in order to drive up their stock prices; and then those boiler rooms – gangs of expat American, Australian and British telemarketers huddled in Spanish office buildings, trying to convince addled investors in Great Britain to buy shares in those companies. Surely, if we’re to believe this $35 million bagatelle, we have to at least accept the possibility that the rest of the Geranio biography is also true.
I sure hope so. It’s a hell of a story.