World Of Secrets - The Six Billion Dollar Gold Scam: 5. Waiting for Michael

Episode Date: March 24, 2025

On the ground at the Busang exploration site, the dream is collapsing and Bre-X geologist Michael de Guzman is needed for some major questioning. But where is he? As the hours tick by and he fails to arrive at Bre-X's site, news of a tragedy spreads. Those involved in the gold discovery need to get out of Indonesia and fast.Since this episode was recorded, John McBeth has sadly passed away. We are very grateful for his contribution to this story.Please note, this episode deals with upsetting scenes including suicide and contains some graphic details.The Six Billion Dollar Gold Scam was first published in May 2024.

This BBC podcast is supported by ads outside the UK. The legendary escapologist Harry Houdini was obsessed with the afterlife. I see a little boy. He is in a happy place. Join me, Tim Harford, for a cautionary tales trilogy on the world's most famous magician and his campaign to ban mediums, a mission that would cost him friends and leave him fearing for his life. They're going to kill me.

Listen to cautionary tales on the iHeartRadio app, Apple podcasts or wherever you get your podcasts. From the BBC's Investigations podcast world of secrets. Here's the fifth episode of our guest season, the $6 billion gold scam from the BBC World Service and CBC. Over to Suzanne Wilton. First, a warning. The following episode contains difficult subject matter, including references to suicide, death, and descriptions of serious injury. It's the evening of March 12, 1997. The Bre-X bosses are reeling from the bombshell that there might not actually be any Golden Booth sang. Not that it bothered Michael de Guzman, their geologist whose dream led to the gold discovery.

He was living it up in Toronto. Freeport geologist Joe McPherson was also out on the town that night. Boys being boys, you know, they tend to go to the gentlemen's clubs and did meet Michael there one night and he was clearly enjoying himself. He had a little private booth and he was doing, you know doing the dancers thing and I was only there for about an hour, but he'd been there for most of the afternoon, I think, into the evening. You know, I kinda got the feeling that it may have been

kind of a last hurrah thing for him. De Guzman, dripping in gold, was spending thousands on Cristal Champagne with the ladies in the strip joint. Rumour has it, he became so fond of one of the strippers, he proposed to her and asked her to come back to Indonesia. At this point, de Guzman already had a wife. In fact, he had several. We knew of at least three, some people said there were four.

So there was Filipinos, Kalimantan, Bogor here, and apparently someone in Brazil. After that heavy night out, Deguzman received his orders from John Felderhof and David Walsh from Brix. He was to return to Busing to meet with Dave Potter and the rest of the Freeport geologists to explain everything. The next day, de Guzman was put on the last flight out of Toronto bound for Hong Kong. This was the start of his long journey back to the exploration site. But he would never arrive. But he would never arrive. In four days' time, Michael de Guzman would be dead.

I'm Suzanne Wilton from the BBC World Service and CBC. This is the $6 billion gold scam. A story about the lengths people will go to in pursuit of getting rich, and how greed can obscure the truth. This is Episode 5, Waiting for Michael. is episode five, Waiting for Michael. From Hong Kong, Deguzman traveled to Singapore where he had an appointment at Mount Elizabeth Medical Center. He suffered from recurring malaria

and was reportedly struggling with a hacking cough. Waiting for him in Singapore was his wife, Jeannie. She had traveled from the couple's home in Jakarta. Unlike his other spouses, Jeannie knew all about Michael Deguzman's multiple wives. Her words are translated by an actress. He had many women everywhere. I gave him freedom for that. He had plenty of money, a great career. He can play around with any woman while he can still see his kids. So he was happy.

Jeannie had brought along with her Deguzman's pay packet, which she had picked up on his instructions from the Brex Jakarta office. $7,000 in cash. Deguzman decided to stay in Singapore for two days, perhaps to spend some time with his wife. This didn't please Freeport boss Jim Bob Moffat. Back in Busan, Moffat's due diligence team were waiting for Deguzman. They wanted to quiz him about why they weren't finding any gold. You can hear Moffat telling Richard Behar about this in the Brie X tape archive recorded by Behar

while reporting on the story in 1997. We waited four days for de Guzman. You mean it was four days before he came? Four days before de Guzman, demanding he return to the job site the following day. When Mike came from Canada and I was in Singapore, he was called by Freeport's Jim Bob Moffat, and he asked Mike to go up to Busan the next day. We were on the last flight from Singapore. We arrived at 1 am, and at 4 am, Mike left again because Freeport was waiting for him. Mike was outraged. I haven't had any rest. I must see Big Boy. Big Boy was Michael and Jeannie's son.

They said, no you can't. You have to fly tomorrow because they've been waiting for you at the Busang site. I first became aware of Brix when I was working as a national business correspondent for McLean's magazine. I was a feature writer. Jennifer Wells was following the Brix story for an article. She pieced together to Guzman's last evening and final day. According to her, at 1 a.m. on March 18, Deguzman and Jeannie arrived in Jakarta. By 4 a.m., they had gone their separate ways.

Deguzman's next stop was to be Balikpapan, the seaport city in East Kalimantan, and the last big flight before Busang. Deguzman left Jakarta in the early evening. When his flight touched down in Balikpapan, he was met by his Briex colleague, Rudy Vega. Vega was part of the core Filipino exploration team at Busang. Deguzman had asked him to come out so the two men could get their facts straight ahead of Deguzman's showdown with geologist Dave Potter the following day. Potter was leading Freeport's due diligence. But as the meeting dragged on,

Deguzman suggested they go out for a drink. At 8.03 p.m., they checked into a hotel, then spent the evening eating and drinking and singing until 1 a.m. the next morning. Which brings us to March 19th, Dagoosman's last day. last day. The last night of Mike de Guzman's life didn't sound all that different from the life of Mike de Guzman when he was visiting Toronto and hanging out at the strip club. You know, they went to a karaoke bar. He's singing apparently a number of Indonesian songs, but also saying, My way. My way. And now the end is near and so I face the final curtain.

The song popularized by Frank Sinatra was one of Deguzman's favorites. Jennifer Wells tells us that when Deguzman got back to his hotel room, after indulging in karaoke accompanied by his drink of choice, rum and coke, he ran a bath and got into it fully clothed. A bottle of cough syrup had been purchased for him because he wasn't feeling well, and then said that he had taken the majority of the bottle of cough syrup and had taken a bath and was somehow soaking wet.

Australian geologist Jim Richards told me a similar story. So I used to hang out a bit with Greg McDonald who was a logistics guy at Breaks. Greg McDonald worked for Rudy Vega, de Guzman's metallurgist. Vega was one of the last people to see Deguzman alive. Vega shared details with MacDonald of Deguzman's last morning, who then told the story to Jim Richards. Vega's alleged recollection of Deguzman's last day have been widely retold ever since. He hammered on de Guzman's door, trying to get de Guzman out of bed or ready for the flight which would have been very early and eventually de Guzman came to the door and

he was still wearing his clothes from the night out the night before but they were all soaking wet. De Guzman's demeanor when he answered the door was scared. And he believed that Deguzman was trying to take his own life by drowning himself in the bath. And that's why he was soaking wet. It was time to get on the chopper. Exhausted after their night out, Deguzman and Vega dozed until they touched down in Samarinda at 9.40 a.m. It was arranged that a fresh shirt and blue jeans were waiting

there for Deguzman so he could finally change out of his wet clothes. Several witnesses also report seeing a big black box being taken onto the helicopter while it was refueling. No one knows what was in it. Deguzman then decided to use his satellite phone to ring his wife, Jeannie. We had satellite phones even though he's in the jungle. Even before he boarded the helicopter, he said, Ma, I'm leaving, yeah? Ma, it looks like the pilot who brought my helicopter was not the usual pilot

and the mechanic was also not the usual ones. He was like, Ma, why are the pilot and the mechanic different? I told him it's okay. I thought, uh, maybe they had an upset tummy. We like to make jokes. Maybe they need to go to the toilet, Pa." Then he left. Okay, Ma, I will call again. We like making jokes so we don't have any bad thoughts. At 10 a.m., Deguzman re-boarded the helicopter.

Geologist Jim Richards again. This was the moment of truth for Deguzman. Deguzman was caught like a rat in a trap. If he'd got off that chopper at the other end, there was nothing he could have said to other geologists that would have convinced them that it was anything other than a scam. The legendary escapologist Harry Houdini was obsessed with the afterlife. I see a little boy.

He is in a happy place. Join me, Tim Harford, for a cautionary tales trilogy on the world's most famous magician and his campaign to ban mediums, a mission that would cost him friends and leave him fearing for his life. They're going to kill me. Listen to cautionary tales on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. At Busan, Dave Potter had been waiting four days for Deguzman's arrival. In the hot and humid conditions, his patience was being tested. But then a message came through. It was de Guzman.

He called on the radio, and I happened to be in the radio room. He said he was in the helicopter on his way to the Brix job site. So he was flying from San Marinda out to the Brix job site. So he was flying from San Marinda out to the Brix job site. I said, asked him, when are you going to be here? And he said, shortly. And they started talking back and forth in their native language. All I know that I was a little bit aggravated with him. And I was a little bit aggravated with the radio operator as well because he was not being overly helpful. I had to yell at him a little bit because they were talking in Tagalog and I said, no, speak English, I want to hear what's going on.

I said, I need to know when you're going to be here. 20, 25 minutes later, I thought it was that long that they told me that he jumped out of a helicopter. This is from the police department, investigation department in the Republic of Indonesia, March 19, 1997. Jennifer Wells managed to get a hold of a police report filed shortly after Deguzman's death. On March 19, 1997, at about 10.30 Central Indonesia time, in the village of Mara Common Sub-District, Kutai District, East Kalimantan. A Philippine citizen named Michael Antonio de Guzman, 43 years old, operational manager of PT Breaks, fell from a helicopter belonging to the airline PT Indonesia Air Transport.

At 1030 Central Indonesia time, helicopter was flying at an altitude of 800 feet and a speed of 95 knots, when the left rear door opened widely with a loud noise. Pilot pitched down to reduce the speed and at the same time looked back and saw that Michael Antonio de Guzman was no longer in his seat. News of de Guzman's fall reached Freeport. Dan Bowman, Freeport's lawyer, was sitting in a conference room with executives, talking about how they were going to build the mine.

And one by one, the secretary would come in and call somebody out. And I thought that was a bit strange, because this is a pretty important meeting. And then somebody else went, and I was the last one there, and I was the most junior person. And I'm thinking, what's going on here? And then they called me out and I hear on the speakerphone this muffled voice saying, the griswold jumped. And it was, it was Potter. You know, I was just shocked. I didn't, I couldn't believe it. Dave Potter was also in shock. I have to admit I didn't believe it at first. Because, you know, this was something that was coming over radio and I didn't see a body fall out of a helicopter.

So that's hard for me to say, oh yes, that really happened. And then judging by the reaction of some of the people at the site, they were shocked when they heard about it. And then I started thinking to myself, damn, maybe this guy really did do this. Then I started thinking, no, for my own sanity, I can't believe that because I just find it so distasteful to think that rather than talk to me, somebody would kill themselves. I have no idea who the pilot was or what the helicopter was. He never did come to the Breaks job site. So that's a bit of a mystery for me.

After a couple of hours, Dave Potter got a telephone call from the president of Freeport, Indonesia. And he was concerned for our safety. And he said, Dave, you need to get out of there. He said, we just heard that Mike DeGoosman jumped out of a helicopter, and he said things are getting really strange. And he said, I want you to get the crew out of there. At that time, when a mine suddenly shut down, it wasn't uncommon for hostages to be taken. This was the workers way of making sure they got paid. I spent about an hour because they were scattered. So it took me a bit of time to

get people all gathered around and get our helicopter. And by that point in time, I also had three Kapasa's bodyguards that followed me around like dogs. They were interesting guys. Dave Potter's Indonesian Special Forces bodyguards were a sign that things could get ugly. There was this big, big thunderstorm rolling in, lightning crashing and rain coming down. You could see it. I was starting to get a little worried because a pilot told me,

he said, you know, if this storm hits, we're not going anywhere. And I said, oh dear. And we speeded everybody up, got everybody thrown in the helicopter and jumped in and lifted off. And the rain started just as we lifted off and we turned around and flew away from the storm so we flew out of the gust front. And it followed us for a while. It was chasing us, you know, kind of an omen.

Potter flew into Samarinda, where a private jet arranged by Freeport's Indonesian president, Audrey McCribbie, was waiting. The whole crew, dirty, stinking, and crawled in this luxurious private jet and he flew us back to Jakarta. I drove immediately to the office. Audrey said, come and see me, and I got there. And it was essentially like what in the world has happened? The first thing that comes out of everybody's mouth is, what did you do?

Didn't do anything, Audrey. Mike the Gooseman fell out of the helicopter. And Audrey said, no, he jumped. We were all kind of going, what? What? said no, he jumped. We were all kind of going, what? What? Jakarta journalist John Macbeth had been following the highs and lows of the Brieck saga for years, when one evening, while drinking in the bar of the Shangri-La Hotel, he was tapped

on the shoulder by one of his sources, ex-CIA agent Richard Jacobson. And his first words to me was, what if I told you that de Guzman was dead? And I just dropped my beer to tell the truth. And I said, well, he filled me in a little on the detail and I just fled. I went straight back to the office. We called the East Kalimantan police who confirmed that de Guzman was dead. And I had it on the Dow Jones news wires hours ahead of the opposition. It was one of the best scoops you could ever get, frankly.

For months, John Macbeth had been keeping investment banker Warren Irwin informed daily on the latest Briex intel. Warren Irwin had invested millions in Briex. I get a call in the middle of the night, Warren, it's John. I said, what's up? Warren, Deguzman's dead. They've killed him. And I I'm going what? Yeah, yeah, they threw him out of a helicopter. Who did it? Who killed him? I said the Indonesians. I Said wow my nerves by this point completely shot. I don't know what end is up. So I'm going okay As soon as the market opens, I'm selling everything. I never want to hear about Brex again. This is over for me I don't want any part of this sure enough stocks halted

halted all morning and I go on, oh man, I can't do anything. I'm sitting there with half of my position still. So I phone up the company in Jakarta and I go, so what happened to Mike? And they go, well, he was, he fell out of the helicopter. He said, well, can you tell me where it happened? They said, well, it happened between Samarand and the site.

And I said, well, I've seen the pre-flight inspection. Nobody falls out of a helicopter, given the tight pre-flight inspection. So I was like, man, that's not going to, that doesn't sound right. Back in Canada, the brokers wanted to believe that Deguzman had accidentally fallen from the helicopter. They wanted to prevent a crash in shares. They continued to push the stock. The news release comes out, then mining analysts started telling me, Oh Warren, oh yeah, you know how these geologists get, they get a little lax with safety when you're hopping around from site to site, on the site, going from drill place to drill place, they don't buckle in, he just fell out.

I said, nope, that didn't happen. He went from San Marino to the site, he would have buckled in 100%. There's something seriously wrong here. So I went in, I sold all my stock. At the equivalent, I think about that point, it sold off a little bit, about $220 or $210 a share. $220 or $210 a share. Then, a handwritten suicide note supposedly written by De Guzman was discovered in De Guzman's belongings from the helicopter. As news spread, people assumed De Guzman had taken his own life. But not everyone believed it.

I don't believe this suicide letter for two seconds because I was at the Prospectors and Developers Association conference in Toronto, the largest mining conference in the world. Mike Deguzman was there with all the other GOs, with probably half a dozen hookers, having the time of his life. And he was partying up so hard, I knew there's no way he was suicidal. Trust me on this one. After de Guzman's fall, Brix shares plummeted but then rallied. Brix, suspicious of Freeport's drill results and motives, decided to start their own due diligence. Meanwhile, Freeport were determined to find out

why they couldn't find any gold. And several locals and geologists from the job site began scouring the jungle for Dagoosman's body. All while the heat on the investigation into Bre-rix drill results. We had all the equipment, put it under scanning microscopes and also binocular microscopes. And boom! And panic begins to set in. We're sitting on top of a time bomb.

But some still aren't ready to give up on believing. The greed at the time was just off the charts. So much money at stake and so much money to be made and so many dreams that people couldn't let go of. People were willing to roll the dice at any cost. The $6 billion gold scam is produced by BBC Scotland Productions for the BBC World Service and CBC. I'm Suzanne Wilton.

Our lead producer is Kate Bissell. Producers Anna Miles Mark Records. Story consultant Jack Kibble-White. Music and sound design by Hannes Brown. Additional sound design and audio Design by Hannes Brown. Additional Sound Design and Audio Mix by Joel Cox. Executive Editor Heather Kane Darling. At CBC, Veronica Simmons and Willow Smith are senior producers. Chris Oak is executive producer. Cecil Fernandez is executive producer and Arif Nourani is the director. At the BBC World Service, Anne Dixie is senior podcast producer and John Manel is the podcast

commissioning editor. Thanks for listening. The legendary escapologist Harry Houdini was obsessed with the afterlife. I see a little boy. He is in a happy place. Join me, Tim Harford, for a cautionary tales trilogy on the world's most famous magician and his campaign to ban mediums, a mission that would cost him friends and leave him fearing for his life.

They're going to kill me. Listen to cautionary tales on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Kill me.