The Money: How Francis Shelden’s Fortune Moved Through Hong Kong, Liechtenstein, and Wall Street

The man who fled Michigan in 1976 left behind a fortune that kept moving for four more years. The federal courts that followed it recorded every stop, and none of them asked the question the island raised.

Content note: this series concerns the sexual abuse of children on North Fox Island. This installment is about money, and details of the abuse are kept to what the record requires.

Part II ended with a former Dutch senator holding the title to a fortune he swore he never received. This installment follows that fortune. The record here is unusually complete, because Shelden sued to get it back, and three federal courts wrote down where it went.

The Agent

Adam Starchild was born Malcolm Willis McConahay. By the mid-1970s he was writing about offshore banking and tax havens, and in September 1976 he formed the Trust Company of the Virgin Islands, with himself and Frank James Holahan as its directors. Within weeks Shelden had placed his fortune with it. The trust held roughly $2 million to $2.4 million in stock and all of the shares of three companies. One of them was the North Fox Island Company, in which the trust held 40,000 shares. On October 9, 1976, $150,000 went to Windigo Ranch in Aspen, Colorado.

Starchild was more than a trustee. When the North Fox Island case broke in April 1977, the Traverse City Record-Eagle reported that Shelden’s Piper Seneca had been sold through Combs Gates in Denver to Alpine Aviation in Provo, Utah, and that Starchild had handled the sale as Shelden’s agent under a power of attorney. The airplane Shelden flew across northern Lake Michigan was gone within weeks of the warrant for his arrest.

Hong Kong and Liechtenstein

On December 15, 1977, about $1.7 million left the trust for Minerva Investments in Hong Kong, booked as an unsecured loan. Four months later, on April 13, 1978, Shelden removed Starchild’s company and appointed Edward Brongersma. Starchild did not hand over the money. In May and June 1978, Minerva was liquidated for about $1.4 million, routed through Gradison Cash Reserves, and sent on. Part went to Eleuthera Anstalt, an entity organized in the form Liechtenstein law calls an Anstalt. Part went to Sogo Shosha, which received $500,000 as capital and $300,000 as a loan.

Wall Street

The trust’s brokerage accounts went next. A Bear Stearns account was liquidated in April 1979 for $170,851 plus $175,000 in Treasury bills. A second Bear Stearns account, holding $83,113.83 with no discretion granted to the broker, was closed on April 11, 1980. A Donaldson, Lufkin and Jenrette account produced a check for $278,240 that same April. A Shearson account paid out $234,569.17 on November 7, 1980, part of it to the attorney Anthony Lederer. By then Shelden’s Michigan lawyer, L. Bennett Young, and Detroit Bank and Trust, through trust officer David C. Wind, had been the trustees for more than a year. They had been appointed on October 16, 1979.

The Courts

Starchild was convicted in New Jersey on May 5, 1981, of obtaining money under false pretenses and forgery. Shelden, meanwhile, was litigating in two federal forums. In Michigan, the fight was over who controlled the trust’s holdings after Young took over. Judge Charles W. Joiner granted summary judgment on August 20, 1982, and the Sixth Circuit affirmed on March 8, 1984, over a dissent by Judge Robert Krupansky. In Puerto Rico, Shelden sued the trust company and Starchild directly, and on June 7, 1985, the court entered judgment of $2,974,380 plus interest.

Those opinions record Shelden’s Amsterdam instruments, his consular authentications, and his deposition. They were public. A fugitive from a Michigan warrant was a plaintiff in American courtrooms for most of a decade, and the published opinions show no law enforcement agency appearing, asking, or following up.

Where It Was Meant to Go

The trust’s terms named who would inherit at Shelden’s death: Yale University $25,000, Cranbrook $5,000, the University of Michigan $10,000, Wayne State University $10,000, and the American Association of Petroleum Geologists $5,000. The remainder was to go to the children or grandchildren of Alger Shelden Jr. Cranbrook appears twice in this record. Gerald Richards placed Shelden on its institute board on the network map he drew for investigators in 1977.

The Island

The North Fox Island Company’s shares sat in the same trust that Starchild drained. The island did not stay in the family. Today it belongs to the State of Michigan as part of the Department of Natural Resources’ Beaver Islands State Wildlife Research Area. The land where boys were brought and filmed is now public property managed for wildlife, and nothing on the state’s description of it mentions why it became famous.

The Records I Am Requesting

Part IV turns to the question readers ask most: whether anything connects North Fox Island to Interlochen, fifty nautical miles away, and what the record actually shows.