The flamboyant Hunt brothers of Texas, whose combined riches once totaled an estimated $6 billion, were found guilty in federal court Saturday of attempting to illegally corner the silver market eight years ago _ a move that marked the beginning of a downward financial spiral that has eroded much of the trio's fortune.
The three _ Nelson Bunker, William Herbert and Lamar Hunt _ were ordered by the New York jury to pay more than $130 million in damages to the Peruvian government's mineral marketing company, which claimed in the civil suit that it was ruined by the brother's investments.
The company, Minpeco S.A., alleged in the suit that the Hunts broke antitrust and racketeering laws by scheming to corner the silver market _ and then trying to do so by buying a third of the world's silver supply in 1979 and 1980.
Jurors in the trial, which began in February, found the three brothers guilty of violating fraud, commodities and antitrust laws. In addition, Nelson and William were found guilty of racketeering charges, but the civil case verdict carries no criminal penalties.
Only Lamar, the owner of the Kansas City Chiefs football team, was found not guilty of racketeering.
The jury also found that International Metals Investment Co. and Mahmoud Fustok, a prominent race horse owner, had participated in the conspiracy.
The metals investment company was owned by two Arab sheiks and two of the Hunt brothers. Fastouk is the brother-in-law of the Saudi Arabian crown prince. And another defendant was a Lebanese businessman now living in Brazil. The sheiks and the Lebanese businessman, Naji Nahas, have no U.S. holdings and did not challenge Minpeco's court papers.
During the Hunts' buying spree, the price of the precious metal went from $9 an ounce to more than $50 an ounce. Then the bottom fell out of the market and prices plummeted to $10 an ounce. The Hunts bought 59 million ounces of silver in less than a year, and ended up losing $1.5 billion.
The jury delivered its verdict after six days of deliberations. It determined that the Hunts had cost Minpeco $63 million in short silver futures contracts, $24.5 million in interest on loans to pay for its losses and $12.2 million in future trades. The jury said, however, that damages should be offset by $33.4 million Minpeco earned on silver it held during the same period.
Lawyers for the Peruvian national company said they arrived at the $130 million figure because some of the judgments will be trebled because of the racketeering convictions. The company had originally sought $450 million in damages.
The Hunts had denied charges of trying to corner the market, contending that world political events drove up the price of silver.
During the trial, testimony was spiced with descriptions of meetings in far-flung parts of the globe, as well as the doings of Swiss bankers, Arab sheiks and Wall Street commodities traders.
Six financial institutions were originally named in the suit, but they settled out of court for $64.6 million. They included Merrill Lynch & Co., E.F. Hutton & Co. Inc., Banque Populaire Suisse, Prudential-Bache Securities, ContiCommodity Services Inc. and AML Futures.
"I feel terrific," a beaming Mark Cymrot, one of the attorneys for Minpeco, said after the verdict.
The Hunts declined comment, but one of their lawyers, Paul Curran, said, "Naturally, we disagree with the jury."
Asked if an appeal is planned, Curran said, "This was just the first step in the process. We will now make our applications to the trial judge (to set aside the verdict), and if we are not successful in those, we will proceed from there."
Last month, they filed a bankruptcy reorganization plan for their Placid Oil Co., just as they did in June for their Penrod Drilling Co.