Dramatic fall of socialite who married Wall Street's first Chinese titan

Nancy Tsai, ex-wife of late billionaire Gerald Tsai, is set to face trial for fleecing frail friend, 92

PUBLISHED : Sunday, 04 May, 2014, 6:45am
UPDATED : Monday, 05 May, 2014, 9:46am

The downfall of former Toronto "Glitter Girl" Nancy Tsai has been swift and stunning.

As the beautiful blonde wife of late billionaire Gerald Tsai - the Shanghai-born financial wizard who conquered 1960s Wall Street - she became a fixture of New York's social scene.

She and her husband were famed for their philanthropy, giving US$3 million to the Norton Museum of Art in Palm Beach, Florida, where they spent winters. They divorced in 2006.

The ageing playboy took up with Sharon Bush, the former sister-in-law of then-US president George W. Bush. Nancy Tsai was cut from an US$8 million trust created by Gerald for her benefit. He died two years later, aged 79.

Today, 66-year-old Nancy Tsai, a former flight attendant, stands accused by police of trying to maintain a jet-set lifestyle by fleecing an elderly woman.

Police in Palm Beach have accused her of stealing millions from a rich Alzheimer's patient over whose affairs she had power of attorney.

Among the items that police say Tsai lavished upon herself using Helga Marston's trust fund were a US$2.3 million Palm Beach penthouse, a US$170,000 Bentley coupe and two Mercedes-Benz models, as well as flights in private jets.

None of this benefited Marston, police say. She was a frail 92-year-old living in a care facility who had "zero mental capacity" to authorise or enjoy her friend's spending spree, according to a police affidavit.

Her death on April 23, one day after police charged Tsai, is unlikely to halt the case.

"Although Tsai is not a named beneficiary of [Marston's] trust, she had complete control over [Marston's] finances and had the ability to distribute the trust's assets at her discretion," according to the affidavit signed by Detective Daniel Wilkinson.

In addition, Marston's will had been amended last May to make Tsai and her daughter the beneficiaries, the affidavit said.

The accusations add to the mounting number of complaints in the US of elder abuse, that include emotional, physical and financial harm. The most notable recent victim was philanthropist Brooke Astor, whose son was convicted of siphoning millions from his mother.

The late Mickey Rooney testified before the US Senate in 2011 that a relative took money from him. He won restraining orders against his stepson and stepdaughter, media reported.

After Tsai's arrest, police charged her with exploitation of an elderly person and grand theft from a person over 65.

The woman who formerly appeared in social pages with a dazzling smile and hair tucked into a sleek bun looked weary and dishevelled in a police mugshot.

Police say Tsai was helped by Marston's former financial broker, Dennis Melchior, of UBS Financial Services. Melchior was fired last year by UBS in part because of the conflict of interest created by starting a romantic relationship with Tsai, according to the affidavit. The firm had been handling the Marston trust when Tsai's spending, beginning in January 2012, triggered concern.

Palm Beach police told the National Post newspaper they would investigate Marston's death "to make sure nothing suspicious occurred". Tsai is free on US$30,000 bail and a trial is scheduled for October. She could not be reached for comment.

Tsai was not always shy of publicity. As Nancy Paul, the wife of Canadian millionaire Vince Paul, she cut a swathe through Toronto's social scene.

She had married Paul, a real estate developer whom she reputedly met on a flight, in 1979 and used his fortune to finance forays into philanthropy.

In 1986, she founded the Canadian Breast Cancer Foundation. It was initially created to host Italian designer Valentino on a visit to Toronto.

Nancy Paul wasn't ashamed of ostentatious displays of her former husband's wealth. "I can't take pride in the fact that we're no longer wearing mink and diamonds," she told author Rosemary Sexton in her 1993 book Glitter Girls that chronicled Toronto's 1980s social scene. "Wealth is a sign of a healthy economy - it's not bad."

Vince Paul died in 1996. A year later, Nancy Paul moved up a notch on the social scale by marrying Tsai, a Wall Street legend 20 years her senior.

Her matron of honour was Nancy Brinker, the former US ambassador to Hungary and founder of the Susan G. Komen breast cancer charity, upon which the Canadian foundation was modelled.

After she became Gerald Tsai's fourth ex-wife, she was cut out of Tsai's US$8 million trust, set up should he die. She sued, claiming her ex-husband had been funnelling money to Sharon Bush. The case was dropped in 2007.

Tsai refused to give up the Chinese surname by which she was well known in New York and Palm Beach. She apparently also refused to give up the extravagant lifestyle she once enjoyed with Tsai, according to the police.

The affidavit lists thousands of dollars of casual spending by Tsai, all allegedly funded by Marston's trust. One meal at Café L'Europe in Palm Beach cost US$7,762.

The affidavit describes the moment last April that Marston signed documents to buy a US$2.3 million penthouse.

An assistant to Marston's lawyer tried to explain the documents to the frail woman, but she appeared not to understand.

"[Then] Nancy Tsai, who was also present, assisted her by whispering the meaning of each page to Marston," Wilkinson wrote. Marston acknowledged her friend of 40 years and the documents were signed.

Gerald Tsai, the playboy financier who seduced America

Nancy Tsai was ferried into the highest ranks of society by an ambitious husband born into a worldly mainland family.

Gerald Tsai was a titan of the US financial world, first as a stock picker of almost preternatural ability during the "go-go" 1960s bull market. He transformed a tin can manufacturer into the financial services firm Primerica through sheer will in the 1980s.

He bought the investment bank Smith Barney in the process. He sold Primerica to Sandy Weill in 1988 for US$1.7 billion. The company became the seed for banking behemoth Citigroup.

Tsai was famed for a high-turnover investing style that carried over into his personal life - he married and divorced four times. And he skirted disasters both financial and physical.

In 1980, he survived after crashing his helicopter into the Hudson River. He was also idolised by younger tycoons, including Donald Trump.

When Tsai was named CEO of Primerica, "I went out the same day and bought stock", Trump told Fortune magazine. "I made a big bet on Gerry. Life is people and Gerry's a champ."

Gerald Tsai's Chinese father was educated in the US and hired by the Ford Motor Company. He was sent back to head an office in China. His son, also known as Cai Zhiyong, was born in 1929 in Shanghai and graduated from Boston University with bachelor's and master's degrees in economics, according to Bloomberg. He never again lived in China.

During the first act of Tsai's remarkable career, he became the original celebrity fund manager. The Fidelity Investments performance fund he created in 1957 was the first vehicle of its kind. It grew 27-fold in eight years, according to Bloomberg.

When Fidelity's founder decided to pick his own son instead of Tsai as his successor, Tsai quit and started his own Manhattan Fund.

When it launched in 1965, it drew US$247 million in capital, "the biggest offering in investment company history", according to The New York Times. He sold it in 1968 at the top of the market. It was typical good timing. Tsai continued to run the fund, but over the next year it suffered in a stagnant market.

Tsai's reputation took a hit, but he bounced back spectacularly. In 1982, he was running a modest life insurance firm when he sold it to the American Can Company.

He persuaded the boss to transform the food-packaging firm into a financial services company and Primerica was born. When he was named CEO in 1987, Tsai became the first Chinese American head of a Dow Jones industrial firm.

After selling the company, he returned to the insurance industry and rose to chief executive of Delta Life Corp in 1993. He sold that to AmerUs Life Holdings for US$185 million in 1997.