Warts and All

UPDATED 05/02/1994 at 01:00 AM EDT Originally published 05/02/1994 at 01:00 AM EDT

TERESARODRIGIEZ'S EMPLOYEES MAY have been first to call her the Toad Queen, but it wasn't long before those in Houston's high society embraced the nickname. It was partly because the wealthy, well-connected businesswoman collected expensive frog and toad-motif jewelry—and partly for less flattering reasons. No reed-thin social X-ray, she was short, heavy and earthy, known to curse like a sailor and drink like one too.

When it came to shopping, though, Rodriguez was in a class by herself. She treated Neiman-Marcus as if it were Kmart, dropping tens of thousands of dollars at a time. Her splendid town house near River Oaks—Houston's Beverly Hills—was crammed with Baccarat crystal, Limoges china and Louis XIV, XV and XVI antiques. "She had this insatiable appetite for clothes and jewelry," says David Delaunay, an interior designer who socialized with her. Her closets were filled with gowns by Oscar de la Renta, shoes by Charles Jourdan. Her spectacular jewelry collection included a huge 23-carat diamond solitaire and a pave diamond frog. Even given her wealth, says Delaunay, "it should have been obvious that she was spending someone else's money."

Indeed, Rodriguez, 45, is currently under federal investigation for allegedly bilking hundreds of investors out of as much as $80 million. Houston is agog, for many of the victims of the Toad Queen's alleged Ponzi scheme—in which early investors who thought they were buying shares in a government-sponsored program to aid minority businesses were paid high returns with money raised from subsequent investors—are members of the city's upper crust. "I'll be sick when this is over," says Houston Post society columnist Betsy Parish. "What are we all going to talk about?" It may be years before the topic is exhausted, though, since several civil suits have been filed against Rodriguez. Although she has refused all interview requests, Rodriguez has hired Joel Androphy, a high-profile defense lawyer, to talk for her. "She is innocent," he insists, "and will be exonerated."

Meanwhile, Rodriguez has been forced into bankruptcy by disgruntled creditors, and the IRS has seized her assets to pay some $1.2 million in back taxes. Two weeks ago, Sotheby's in New York City began to auction off her jewelry, and this week the Hart Galleries in Houston will put her clothing and home furnishings on the block. The stuff is reportedly as good as new. "She was buying so frantically," says Hart Galleries spokesman Clive Watson, "she didn't have time to remove the price tags."

Rodriguez's apparent hunger for possessions and status may have originated in a childhood that was humble in the extreme. She was the ninth of 11 children in a poor family from the town of El Campo, 70 miles southeast of Houston. Last year she told an interviewer that her father abandoned the family when she was 5, and that her mother had been mentally ill. She married her high school sweetheart, Ramiro Rodriguez, who worked as a maintenance man in El Campo, and completed a two-year degree at nearby Wharton Junior College.

In 1974, Teresa and Ramiro moved to Houston with their two sons, Gregory and Robert. After a series of clerical jobs, she became an executive secretary at Geosource Corporation. Then in 1984 she launched her own bookkeeping company, TR Financial Services. Within a few years, Rodriguez had started more than 50 companies dealing in everything from imported flowers and wholesale jewelry to computer software. Though most of these companies apparently showed no profit, she built the now-defunct Staffall into the largest employee-leasing firm in town. In 1989 she was named Houston's Hispanic Businesswoman of the Year.

She was also aggressively active in Houston social circles, writing big checks for charity galas and political fund-raisers. "Here in the land of big hair and big jewels, entrée into society is based on fund-raising for charity," says Betsy Parish. "Her appearance and earthy language didn't matter because of the money she had."

In 1991 the Toad Queen's wild ride began in earnest. Rodriguez divorced her husband and five days later married Houston police captain M.D. "Dale" Brown, whom she had met at a fund-raiser. She also donated $15,000 to Mayor Bob Lanier's reelection campaign and thereafter was often seen lunching with his wife, Elyse. Soon, Rodriguez was attending top-tier social functions all over town, including the Houston Grand Opera gala and the Winter Ball. And her binge buying seemed to go from profligate to out of control. "I could see the progression in her spending habits," says Delaunay. "She started wanting the finest jewelry, the finest champagne."

Socialite Betty Shindler first heard of Rodriguez in 1991 from a friend in New York. "She said there was a fat Hispanic lady from Houston on a clothes-buying spree in New York, spending hundreds of thousands of dollars," Shindler recalls. Always on the lookout for wealthy donors for various charity events, Shindler invited Rodriguez to join the Textile Institute of Houston's Museum of Fine Arts and promptly received a $2,500 contribution. "She was flattering, very generous," Shindler says. "I was surprised when I first met her. She was loud, drank a good bit and used four-letter words right and left. But she managed to weave all that into a charming personality."

During the next few months, Shindler adds, "we became friends." Then in November 1992, Rodriguez approached her with a business proposition: As a Hispanic woman, Rodriguez allegedly explained to Shindler and other potential investors, she was able to win multimillion-dollar contracts through the Small Business Administration (SBA) to provide bookkeeping and other services to federal agencies. In turn, she allegedly claimed she could perform the work at less than half what the government paid her and return a profit of as much as 20 percent monthly to her investors. Shindler persuaded her husband to pony up $250,000 for the deal. "Teresa seemed like a street-smart woman," she says. "And the fact she was married to a police captain with an unblemished record certainly added to her credibility."

The Shindlers received a supposed profit payout of $20,000 in February 1993. But when a second check bounced, they contacted Ed Pankau, a Houston private detective who specializes in investment scams. "As soon as the Shindlers started telling me their story, I interrupted and said, "Teresa Rodriguez,' " Pankau recalls. "They said 'Oh no, Ed, you know.' "

A few months earlier, Pankau had received a call from a Houston doctor's bookkeeper. She had become concerned when the doctor asked her to write a check for $300,000 to Rodriguez. "This was the entire profit-sharing plan for the doctor's office," says Pankau. The detective checked around and quickly discovered that Rodriguez had filed incorporation documents with the state for numerous businesses. "Most of them had no phone listings, no Dun & Bradstreet listings, no business records," says Pankau. "That told me these were just shell companies." Pankau also found evidence Rodriguez may have used multiple names, Social Security numbers and addresses. And a quick call to the SBA showed she had no dealings with the agency. "People are usually smarter than this," says Pankau of Rodriguez's alleged victims. "But the greed got to them—and they saw her with all these big socialites."

Shortly after the Shindlers showed up on his doorstep, Pankau was approached by another potential Rodriguez client. Afraid that many other people might be taken in, Pankau called the feds. But the Toad Queen's financial house of cards had already-begun to collapse. Her checks to "investors" were bouncing all over town. Finally, on April 23, 1993, agents from both the FBI and the IRS swooped down on Rodriguez simultaneously, seizing business records and most of her property.

These days, according to her lawyer, Rodriguez is living with relatives, preparing her defense and "doing volunteer work at Covenant House." Her husband, Captain Brown, remains in good standing with the police department. David Delaunay, who never invested with Rodriguez, remains convinced that "deep down inside she was a good person. She did what she did for a few months of happiness. Spending money was like therapy for her." Many of the Toad Queen's victims, on the other hand, have found their investments less therapeutic. Even if she should win in court, Betty Shindler, who is suing Rodriguez for fraud, is troubled by her own naïveté. "What bothers me now," she says, "is that I thought Teresa was my friend."

DAVID GROGAN
ANNE MAIER in Houston

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