Prison teaches disgraced publisher life lessons

• By GREG LANGLEY
• Books editor
• Published: Jun 14, 2009

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IN THE SANCTUARY OF OUTCASTS
By Neil White
William Morrow, $25.99; 313 pp.

Neil White didn’t have it all growing up in Mississippi. He sure had most of it though. He went to Ole Miss, joined a fraternity, dated beauty queens and came to believe he was God’s gift to journalism.

After school, he married a lovely woman, had two beautiful children — the requisite boy and girl — and started up his own newspaper, Oxford Times, in Oxford, Miss. Things came easy for White, so it’s no surprise he had an easy come, easy go attitude about money — his own and his investors’. That attitude got him into trouble pretty quickly when he got into a pinch with payroll. A big advertiser, a grocery store, owed his paper nearly $5,000 but hadn’t come up with the promised money. White had already written his payroll checks, counting on the promised money.

“The next morning I called the grocery store,” White writes. “The owner was out of town and would be gone for two days.”

What to do?

“I had $400 in my personal checkbook and, despite having a balance of $400, wrote a $3,000 check to myself, from myself. On the bottom of the check I wrote ‘loan.’ The following day the check would bounce without some kind of coverage, so the next morning, a Thursday, I wrote a check from my business account to repay my personal account for $3,000. On the subject line I wrote ‘repayment.’”

The grocery returned the next day and paid the bill. The check covered all the other checks White had written. He was on to something, a scheme for borrowing without taking out a loan. He had discovered check kiting.

Eventually, White’s ambitions overran his income so far that even the check kiting scheme couldn’t cover the loss. He got caught $8,000 short. He might have gone to jail right then, but his investors, still believing in him, bailed him out. That was probably the worst thing anyone ever did for Neil White. He was more convinced than ever of the rightness of his operating philosophy. He got further in debt and went bankrupt, leaving his investors and vendors holding the bag on losses of more than $100,000.

He didn’t learn. He left Oxford and raised money from other investors to launch a magazine. Coast Magazine, based in Gulfport, was a hit. White was back in business, and he was back kiting checks.

Eventually White owned Coast Business Journal and New Orleans Magazine. He seemed like a perfect businessman: churchgoer, philanthropist, family man, hard worker. He had a building in Gulfport, Miss., and houses and cars, including a place in New Orleans. He was a celebrity. But if he lived his life in a mansion, it was a mansion made of mirrors. White was having cash flow problems again, and he was using the same creative checking method to solve them. Of course he was caught again. This time the FBI caught him. This time there was no bankruptcy, no rescue, no bailout. In 1992, White was charged with kiting about $1 million in bad checks. He told his kids he was going to camp.

“But it wasn’t camp. It was prison.”

It was the federal prison at Carville. White reported in 1993. “The prison sat at the end of a narrow peninsula formed by a bend in the Mississippi River, twenty miles south of Baton Rouge. The strip of land was isolated, surrounded by water on three sides.” There was more. The prison shared its grounds with the Hansen’s disease facility, and about 130 lepers still lived there. White was terrified. That’s where this book picks up.

White roomed with an inmate, Victor Dombrowsky, called “Doc,” there for Medicaid fraud and tax evasion — selling “heat” pills with ingredients not approved by the FDA, then stashing the money from the sales in offshore accounts. Other images included those who had defrauded customers of insurance companies, a former banker who hired a hit man to kill his thoroughbred horses to collect the insurance, a crawfish producer who had come up with a price-fixing scheme, an airline entrepreneur who laundered money to keep his regional airline afloat, a CEO who had dumped waste from his chemical plant into the Mississippi River, drug dealers, counterfeiters and a man who kept his dead mother in a spare room and kept collecting her Social Security checks.