Donald Shields could possibly be one of Maine's most talented financial wheeler and dealers, but, as a relentless tide of lawsuits, police investigations and federal sentencing surges in, he's finding that talent has its limits.

By ROBERT CONLIN

Friday, July 10, dawned sunny and crystal blue on a remote tip of Edgecomb, a breeze off the Sheepscot River rustling the trees and thick brush and softening the repetitive shrill of the cicadas.

At 795 Cross Point Road, at the Quarry Farm development, the summer silence was broken by the sound of footsteps on the gravel driveway of Donald Shields' former house. Once a place of refuge and command central for his countless investment schemes, the house was on the foreclosure auction block.

There was no sign of Shields, which came as little surprise to the two debtors in attendance. Once he finished charming them and many others across the state and extracting their money with grand tales of dazzling returns, the 55-year-old rumpled, professorial-looking financial analyst was like a summer breeze - here, there, but always dancing out of reach.

Shields' house was auctioned off that day to Scott Lane of Wiscasset for $185,000. The bidding reflected much of what can be maddening about tracking Shields' activities. Lane was not one of his debtors, but through an arcane process, was allowed to purchase a party-in-interest position to bid on the house.

Lane purchased the right from Leo Violette & Sons and Donald Gasink, an Augusta lawyer who was the administrator of a pension plan which, along with Violette, won a foreclosure judgment in Wiscasset District Court against Shields.

According to the court complaint, Shields issued a $14,000 promissory note to the plaintiffs and still owed $9,400 when they filed the complaint.

In a hearing in June in West Bath District Court, Shields acknowledges paying Lane $3,000 to purchase the mortgage.

By purchasing the right, Lane was able to move ahead of other secured creditors who were waiting to get paid, despite having no obvious interest in the legal proceedings surrounding Shields.

Gasink was representing the plaintiff, Joyce Denny of Freeport, at the foreclosure sale. After papers are passed, she will receive the approximately $165,000 in damages, costs and interest Shields was ordered to pay by Wiscasset District Court for breaching the conditions of his mortgage - which was used as collateral in a loan transaction between the two.

Now that Lane owns the house, he said he most likely plans to sell it. In fact, just minutes after securing the winning bid, he asked the other debtor present, Steve Winter of West Bath, whether he was interested in buying it.

With a wry smile, Winter declined.

One of Shields' most dogged pursuers, Winter, 53, was awarded $145,000 in a 1996 Sagadahoc County Superior Court judgment against Shields for loans that were never repaid and he has spent the last two years trying to collect on them.

If anyone can know a chameleon like Donald Shields, it's Steve Winter. He maintains an Internet web page devoted to tracking his exploits and has met him numerous times in court.

``It's been a long period of gullibility,'' he said that Friday. ``He would tell me that money was coming in and that he would pay me back, but that only works for so long. It's a human trait that you believe what you want to believe. That happened to me for too long with Shields.''

When contacted in May, Shields deferred any questions to his lawyer, Ricky Brunette of Portland. In mid-July, Brunette declined to comment, saying that doing so could affect the outcome of a plea agreement Shields made with federal prosecutors in a high-profile fraud case.

A STRING OF LAWSUITS

Winter is not the only one who believed Shields' stories of high-rolling financing and high return, low-risk investments.

In the space of approximately 10 years of deal-making, Shields has

managed to accumulate legal judgments against him to the tune of $1.3 million.

The judgments are only the ones that are known - there could well be countless others in scattered jurisdictions around New England. There is no central clearinghouse of information on civil actions in Maine courts. Instead, files are bound into books and stored in Registry of Deeds offices in county seats throughout the state. Shields' trail of unpaid loans, empty promissory notes and lofty-sounding investment schemes spread up and down the state, from Androscoggin, to Somerset to Lincoln to Franklin Counties.

Along the way - from Brewer to Rangeley to Farmington to Freeport to Wiscasset - are the human costs of Shields' and his co-conspirators' activities. There is a single mother who had her house foreclosed on after Shields failed to repay a loan, elderly investors who federal prosecutors say lost their life savings in a fraud case he pleaded guilty to being involved in last year, and experienced businessmen who have lost face and faith in doing business the old-fashioned way.A number of people who have won court judgments against Shields volunteered information about their cases when contacted, though virtually all of them were reluctant to speak publicly. The common thread that stitches them together is that of embarrassment and shame at their naivete, as if their experience was isolated.

A computer name search at the Lincoln County Registry of Deeds produces numerous references to court actions against Shields - page after page of judgments, attachments and liens. Shields has made many people from many walks of life unhappy over the years, but Maine lawyers are not among them.

FEDERAL MAIL FRAUD CHARGES

That, however, is just the beginning of the problems for Shields. This fall, he faces sentencing by the U.S. Attorney's office in Portland after pleading guilty to one count of mail fraud and one of money laundering last October. In exchange, he will testify in the case of the U.S. vs. Catherine Duffy Petit, the former owner of the Old Orchard Beach Pier. The case - according to the public relations offices of the U.S. Attorney and the Maine Attorney General - is Maine's largest single fraud case.

Petit and a list of co-conspirators which includes Shields, are accused of bilking Maine investors out of more than $6 million in a scheme in which the government claims they solicited the money to finance a lawsuit Petit had against the Key Bank.

In return, the complaint alleges, investors were promised sizable financial gains when Petit was to be awarded expected damages. The U.S. Attorney's office has hand-picked Shields to be one of their star witnesses and one of three confidential informants in their prosecution attempt to send Petit to jail.The case is bogged down in legal motions now, but is expected to begin trial sometime this fall.

In addition to his federal sentencing, Shields is feeling the heat locally.

District Attorney Geoffrey Rushlau was recently handed the results of an investigation by the Lincoln County's Sheriff's Office into allegations of forgery involving Shields and a Camden doctor who's name he allegedly forged on loan documents.

Rushlau confirmed Monday that his office has received the results of the investigation and will look into whether it will pursue criminal charges.

In addition, Winter's attorney, David Weiss of Bath, said Monday that he plans on asking the DA this week to bring perjury charges against Shields as well.

The inquiry, said Weiss, stems from Shields' testimony at a financial disclosure hearing in West Bath District Court last month in which he claimed $1400 in foreseeable future income.

``In our view, Mr. Shields did not tell us the entire truth,'' said Weiss. ``We found him to be evasive, and that's being charitable.''

Documents obtained by the Wiscasset Newspaper reveal that Shields is involved in a project funding and investment scheme with a New Hampshire company called Tidewater Investments.

That company, which, according to its promotional literature engages in securities trading, is not listed with the New Hampshire authorities. Any company or individual trading securities is required to register with state regulators.

In a document headed ``project funding'' Shields claims to be involved in everything from a $1 billion Las Vegas casino project to a $500 million theme park in California to $55 million in prison projects in the Caribbean.

Total commissions on the projects listed by Shields amount to over $6 million, clearly a difference from the $1400 he claimed in his financial disclosure hearing. The documents were faxed to a prospective associate on May 31, the day before the June 1 disclosure hearing.

Assistant U.S. Attorney Donald Clark, who is the lead prosecutor in the Petit case, said the government would consider any credible evidence of perjury to be a violation of Shields' bail condition and sentencing agreement.

``If he's engaged in criminal conduct, it would be the basis for us revoking the agreement,'' Clark added.

A GIFT FOR NUMBERS

Shields is no stranger to the mid-coast area, but his early life is not an open book.

Originally from Massachusetts, he is said to have graduated from high school early and served a stint in the Army. Sources close to him say that he claims the Army conducted psychological tests on him because of his intelligence.

What emerges from interviews with people who have come in contact with him is a portrait of a man with a gift that's wrapped in numbers; within that rigid and fixed world he has apparently found a place to flex his aptitude.

Coupled with a memory that is said to be photographic, his talent for numbers has allowed Shields to juggle multiple financial schemes. He is, according to at least one of his victims, a sorcerer blessed with an ability that is sadly misused.

He's been married at least three times, has two children and is currently married to Suzanne Leeman of Boothbay Harbor. The couple is said to have moved from the mid-coast area, although their exact whereabouts is unclear at present.

After owning the Cannon Towel Factory Outlet on Route 1 in Wiscasset in the 80's, Shields hung out a sign as an accountant and financial analyst.

He opened up an office in 1985 called Fort Hill Realty Trust, which purchased its first property at the corner of Bradbury and Fort Hill Streets in Wiscasset.

Shields also started a limited real estate partnership with Ben Rines Sr. of Wiscasset. The two purchased a parcel of Route 1 land in 1987 for $68,000 and the property was deeded to Shields.

More than a decade later, Rines' name appears on a list of Shields' creditors. Although he declined to talk about his business dealings with Shields, it's evident that their partnership took a wrong turn.

Fort Hill Realty Trust would lead to Fort Hill Financial Inc., a company with a Wiscasset post office box and Shields' Edgecomb telephone number on its letterhead.

Shields' name would start popping up regularly as a defendant in Lincoln County court documents in the late 1980's. Since then, the number and severity of his legal problems has escalated at a rapid rate.

RICO ACT INFLATES THE DAMAGES

One of the more noteworthy cases against Shields was brought by Michael Dunbar, a Brewer resident.

Dunbar, a local businessman, was on friendly terms with Brewer resident Armand Pelletier, an alleged accomplice of Shields' who at one time was the nominal president of Fort Hill Financial Inc. and is a co-defendant in numerous cases, including the Petit case, with Shields.

So, Dunbar readily agreed to lend the two money, first an installment in 1995 of $50,000 for a loan, then subsequent installments for investments in the ``trading program'' and the Petit investment scheme. In total, Dunbar was out of pocket some $165,000.

In a judgment rendered in U.S. District Court in Bangor last year, Shields was ordered to pay Dunbar $344,000, while Fort Hill Financial, Shields and a New Hampshire woman, Ingrid Kiefer, were ordered to come up with an additional $294,000.

Kiefer is a German-born businesswoman who has been convicted of fraud and theft in Massachusetts and New Hampshire.

U.S. District Judge Morton Brody ruled that Shields and Kiefer violated the RICO Act, the federal Racketeer Influenced and Corrupt Organizations Act - a statute often used by authorities against mobsters - which allowed Dunbar to receive treble damages.

So far, he has yet to receive any money, he said when contacted earlier this month.

BROKEN PROMISES

In many cases involving alleged instances of fraud on a grand scale, the perpetrators drive fancy cars, own vacation homes and wear flashy clothes and jewelry.

Donald Shields' rather rumpled appearance fits in well here on the mid-coast - where pretension and showy signs of wealth are on display mainly in the summer months.

If he's accumulated large sums of money from his activities in the last 10 years, it's not clearly evident.

When pressed by Winter's lawyer at the June disclosure hearing, Shields flatly denied having offshore bank accounts in the Cayman Islands. He did acknowledge going there on vacation in 1995.

A cluster of islands with traces of their British colonial past, the Cayman Islands are renowned for their banking secrecy laws. Obtaining information on the accounts of the 32,000 companies, 1,150 mutual funds, 650 bank and trust companies or countless private citizens is next to impossible.

Closer to home, where tropical breezes rarely blow, Randa Wright of Pittsfield is reeling from her dealings with Shields.

According to a 1997 Somerset County civil action brought by Wright against Shields and Brewer resident Liston Inman, she lent them $10,000, only to see the collateral used for the loan vanish overnight.

Shields put up a $58,000 mutual fund he owned jointly with his wife, Suzanne Leeman Shields, as collateral, but closed out the account just nine days after borrowing the money from Wright.

In another case, Wiscasset District Court documents reveal that a former Edgecomb homeowner, who declined to comment and asked that she not be named, lent Shields money for a deal he said was about to come through.

Eventually, she had her house foreclosed on because she claimed he failed to make any payments on a home equity loan which the bank called in.

The woman's complaint claimed that Shields then arranged for a 25 percent interest loan with attorney Donald Gasink and promised he would repay it.

He didn't, and Gasink foreclosed on the house. Gasink is the same attorney who represented Joyce Denny in the foreclosure of Shields' house.

Gasink claims that he wasn't aware that Shields informed the woman he would pay the loan back, saying that past experiences with Shields taught him to be skeptical of any of his financial promises.

TRUST BETRAYED

It appears that virtually everyone who has had experience with Donald Shields is skeptical of his ability to deliver on his promises. Almost everyone that is, except the federal government.

In its 119-page complaint against Petit and six co-defendants, the U.S. Attorney's office claims that Shields - code named CI-3 - had provided the FBI with ``information that has proven reliable and has been corroborated by tape recordings, documents and other witnesses.''

Last month, after the ``Open House'' sign had been taken down and the last of the auction participants had drifted off down Cross Point Road, Winter questioned how the government could rely on a witness like Shields.

``In terms of the government using Shields, if they had done any kind of background checks they would have found out that he's a black sheep that stands out in a flock,'' he said.

Assistant U.S. Attorney Clark said in an interview last week that the government recognizes the less-than-stellar moral character of many of its witnesses, but sees no other way to gain cooperation.

``It's typical for us to say that we wish that we could put ministers, priests and rabbis on the stand to tell the jury about their co-conspirator's illegal activities, but you don't find that defendants pick those individuals to conspire with,'' he explained.

Winter, a former Navy contractor who is now unemployed and shelling out dwindling resources in legal efforts to recover some of his money, recalled how simple it was to be convinced by Shields to part with his money.

``He comes across as an easy- going, well-meaning man,'' Winter said. ``But, as I found out, he would take money from anyone at anytime. The things I still hear about him astound me and I've spent more than two years involved with this.''

ARTICLE ON DONALD SHIELDS. INTENDED FOR PUBLICATION, WISCASSET NEWSPAPER, JULY 16,
1998. KILLED BY THE MANAGING EDITOR AND PUBLISHER FOR ''FEAR OF LIBEL.''