Oscar Villarreal Swindled Cleveland's Rich Out of Millions... and Then He Disappeared

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A brief aside, here, because this "competitive piano" situation has been frustrating.

No one, obviously, has been able to get in touch with Oscar Villarreal for the purposes of reporting this wild tale. No one's got direct quotes. Plus, very few people who interacted with Villarreal are forthcoming with reporters, on or off the record. The fact that most of his investors are represented by extremely powerful attorneys or are themselves extremely powerful attorneys is another can of worms. And it redounds to their advantage in terms of secrecy. They are precluded from commenting, they say, at the insistence of counsel.

Anyway, if we know anything about Oscar by now, it's that the veracity of everything he says requires pretty rigorous scrutiny to substantiate. But we've all decided, nonetheless, to call him a pianist. In every recent story about him, by yours truly or the Northeast Ohio Media Group's Mark Naymik, who has been watching the relevant financial developments not unlike a barn owl watches voles, Villarreal is just off-handedly identified as such. "A young entrepreneur and pianist," the Plain Dealer's Michelle Jarboe McFee tagged him, in an unrelated piece. It's become an inextricable piece of his myth.

To be fair, the evidence certainly suggests he was a pianist. He was living in a Gates Mills mansion from 2008 through 2013 — the $6.5 million Greenwich, Connecticut-style estate was built for Realty One founder Vincent Aveni — which featured, among other lavish interior novelties, a built-in pipe organ. One of the oft-noted outrageous purchases he made with ill-gotten investor capital was a $100,000 Steinway grand piano. He was a board member at the Cleveland Institute of Music, for Pete's sake. This guy was definitely a pianist, right?

Well, not necessarily. No one Scene spoke with had ever actually seen or heard him play. Joe Aveni, who negotiated the lease-purchase arrangement with Villarreal and who, from Florida, acknowledged that he'd had face-to-face interactions with him, called his tenant "an accomplished musician." He wouldn't say, however, how he came by that information, deferring to his lawyer (politely, I might add). Gates Mills police chief Gregg Minichello, who said he remembered nothing unusual, nothing untoward, during Oscar's stay in Gates Mills, never heard the haunting pipes of the organ nor the crashing chords of the Steinway as he made his evening rounds. The CIM marketing and communications director Susan Iler admitted that "enthusiasm for music" was one of the reasons why the board thought Villarreal would be a good fit for them in the first place, but she'd never heard him play either.

Still, it can't be denied that he was involved in the music community. Much was made about Villarreal's hosting an event for the Cleveland International Piano Competition at his home in 2011. This was presented as evidence of his deep embeddedness within the wealthy eastside civic-leader sanctum. 'He joined their clubs, hosted galas,' etc. But Della Homenik, the CIPC's director of communications, who attended that event, said Villarreal certainly didn't perform for guests. In fact, Homenik said, Villarreal only "hosted" in the sense that he opened his doors. He wasn't involved in the planning of (or the paying for) anything.

Scene brings this up only because the evidence also suggests that Villarreal was a deft and somewhat whimsical autobiographer. We know he played fast and loose with the truth in the case of his fabricated Mexican funds. "In letters and reports and in meeting with investors," the SEC wrote in its August 2014 filing, "virtually everything Villarreal told investors was a lie." As such, Scene submits that his personal details may have been equally bogus.

His zany, promotional web presence is just the latest entry in the Villarreal fiction. Each site bears a unique introduction to Oscar: (alleged) supporter of the Cleveland Zoological Society, (supposed) friend of Rivergate Park and the Cleveland Rowing Foundation, a "mentor, role model and leader that is the kind of guy that is an obvious winner."

The kind of guy who writes that he is an obvious winner; who writes, "He studied as a performance pianist for 17 years and competed in Mexico and Spain," as a precursor to, "His community service did not end there;" the kind of guy who claimed Harvard alumni status as quickly as he touted a $100,000 contribution to Tri-C for an endowed scholarship in his mother's name, (completely invented, it would seem: Villarreal's tax filings indicate a single $1,000 contribution to Tri-C in 2012, but the Tri-C recruitment and development folks had never heard of the "Virginia Martinez Scholarship"); the kind of guy who purported to have worked exclusively at Fortune 500 companies during his teenage years; the kind of guy who has lately said that Baldwin Wallace University is located in Berea, Connecticut. It's not unreasonable to suspect that that kind of guy may have bought a $100,000 Steinway to keep a ruse alive.


By 2006, Villarreal was Tech-Start's "Director of International Business" an important title earned almost entirely on the strength of a single megadeal, reported at $70-plus million, that he orchestrated with a Mexican steelmaking company headquartered in his hometown of Monclova.

Villarreal's employer at the time told Scene in a skittish phone conversation that he didn't remember the specifics of the deal — "It was a long time ago" — or much of anything Oscar did during the internship, but he did say that he had "credible connections" in Mexico.

"They were big players of substance, people you could find online," he said. "The question everyone asks now is 'How did [the investors] fall for it?' but there were things he had that were tangible."

The question we're asking now, Scene rejoined, is how Villarreal managed to ingratiate himself in the first place.

"The power brokers of Cleveland were the ones who introduced me to him," the former employer said. "So he'd already embedded himself. He mixed in their circles. He name-dropped like crazy. 'I had lunch with so-and-so,' or, 'So-and-so is hooking me up with this opportunity." He would give lectures at their business councils and lunches and things ... "

The employer paused and reiterated his insistence on anonymity in light of the ongoing investigation, but said finally: "I don't think there's anybody in the history of modern Cleveland who had the shot he had, and he blew it."


April 2006.

Crain's: If you could change one thing about Cleveland, what would it be?

Oscar Villarreal: I would get rid of a bunch of the parking lots we have downtown and build the biggest twin towers in America, get a crazy deal from the city (tax, financing, etc.) and host 10 Fortune 500 companies there, then call it something like: "The Cleveland Centre for World-Wide Business."

Crain's: What differences exist between your generation and older people in your workplace?

Oscar Villarreal: Wanting to take risk, hands down.

Crain's: What is the last book you read?

Oscar Villarreal: Leading from the Heart, Jack Kahl.


Ah, Jack Kahl. Just Jack Kahl, founder of Duck Tape©, longtime owner and CEO of Avon Lake's Manco Inc., bosom buddy of Wal-Mart's Sam Walton, 1993's Most Admired CEO in America, and 1996's and 2000's Best Boss in Town. "He now sits on multiple boards," says Kahl's book jacket bio, "and splits his time between writing, speaking and consulting." Kahl, who didn't respond to multiple requests for comment, was also an early champion of Villarreal's. A former co-trustee said Kahl once started talking about the young charismatic Mexican with some exciting investment opportunities at a board meeting, "almost literally apropos of nothing."

According to an FBI affidavit and the SEC filing, that appears generally to be how Villarreal's investment opportunities were promoted: by and among the business leaders he had already wooed. You know: "board banter," "investment lunches," "Baker & Hostetler recommendations."

Neither the FBI nor the SEC specify how Villarreal initially made contact with the business elite — "While a college student, Villarreal met many prominent members of Cleveland's business and civic communities" — but it's possible (i)Cleveland, an internship program designed to "attract and retain the next generation of Cleveland leaders," in which Oscar participated in 2005, back when it was sponsored by the Greater Cleveland Partnership, helped facilitate important connections. Patrick Manfroni, who ran (i)Cleveland in those days and now does "partner development" for OnShift, was repeatedly unavailable for comment.

By early 2008, Villarreal had formed the first of three fraudulent funds, complete with a legit-sounding name: WW Capital Partners LLC. He'd persuaded six investors — via purported connections to Mexican business interests and "claims of an elite pedigree" — to shell out $550,000 for the purchase, he said, of surplus metal products in Mexico that he would then resell at a profit. Though Villarreal did no such thing, he did dip into his personal line of credit and "unrelated income" to send the initial batch of investors $715,000, a 30-percent return.

That's all it took to ensnare them for good, and to get them singing Oscar's praises at the Union Club and the Pepper Pike Country Club. Later in 2009, when Villarreal offered limited partnership (LP) units in another fraudulent fund — WW Capital III, aimed primarily at petroleum, steel and infrastructure industries in Mexico, Villarreal said — all six of the initial investors jumped back on board.

"Fooled into believing that [the first fund] had been a success," wrote the SEC, "several of those investors enthusiastically endorsed Villarreal to their friends." Through 2009 and 2010, Villarreal raised $9.2 million from 46 investors.

Having made bank, Villarreal then lulled his investors into a false sense of security by inventing connections with a Mexican construction conglomerate, fabricating an imminent pipeline repair contract with Pemex, the state-owned oil and gas company, and producing occasional reports which charted the increasing value of the WW Capital III LP units. As of June 2012, Villarreal told investors that each LP unit, initially valued at $250,000, was worth $442,000. (In reality, after March 2011, the WW Capital III bank account never held more than $1,800.)

As has been reported before, Villarreal merely took investors' money and played around on the stock market. This is especially amusing, in the FBI affidavit, when it's revealed that Villarreal was literally just on E-trade. And though he availed himself of additional management and brokerage fees, he used investor capital to finance his Gates Mills lifestyle, complete with sports car and mortgage. At this time, he was operating a web of companies, including the Oscar Villarreal & Family Foundation, out of a Pepper Pike office on Chagrin Boulevard. Most of these outfits seemed to have been designed to create the illusion of activity — classic (and very basic) shell companies.

His online trading, as expected, was a massive failure. This was expertly concealed from investors, in part, through a lengthy, 100-percent fictitious court battle in Mexico relating to the 100-percent fictitious, $100 million pipeline contract.

About The Author

Sam Allard

Sam Allard is the Senior Writer at Scene, in which capacity he covers politics and power and writes about movies when time permits. He's a graduate of the Medill School of Journalism at Northwestern University and the NEOMFA at Cleveland State. Prior to joining Scene, he was encamped in Sarajevo, Bosnia, on an...
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