Feature: Wednesday, January 16, 2003
‘Our goal for all 12 jurors is to sell ’em,sign ’em, and put the jurors“on the road to financial independence.”’
Steel Bars and Steel Guitars Part 1

The millions Al Petty paid to his investors earned him something, too -- the chance of a long prison sentence.\r\n

By Charles Siderius • Photography by Mark Graham

TYLER — In one corner of a disheveled hotel room off Interstate 20, Al Petty, his eyes watery and bloodshot, sat before a computer, trying frantically to work himself out of a monumental mess, one that could send him to prison for the rest of his life for money laundering and fraud.

In another corner sat the musical instrument that he says got him there. It’s a Rube Goldbergian contraption with a keyboard, 44 strings, 25 pedals, a slew of levers, and a chrome emblem that reads, “Guitorchestra.” He says it can faithfully reproduce the sounds of hundreds of instruments, but the machine flopped after he’d invested seven years and a fortune in it. The flaw that doomed the Guitorchestra is not with it or Al Petty, however. It’s with the world.

“It’s far ahead of anything else. I mean nothing is even close to it,” he said. “It’s too complex.”

That’s also sort of his explanation for TeleCom2000, a supposed cellular telephone service and investment company that Petty started and that prosecutors have called the most far-reaching and productive moneymaking scheme in the history of the federal courts in the Eastern District of Texas. Prosecutrs are still searching for $5 million to $6 million they believe may be in an offshore bank account. Like the Guitorchestra, it was all legal and ahead of its time, Petty said — but apparently too complicated for prosecutors and the FBI to understand.

It’s hard to believe that people would have sent their hard-earned — and in some cases, hard-borrowed — dollars to this man with the bad curly toupee, tinted glasses, silver belt buckle, and a garish purple tie-dyed-looking t-shirt with a big angel on the front.

But such are the wonders of the internet — and of charming Al Petty. From 2000 to early 2002, he promised investment returns so fast and huge that he immediately struck a nerve with the greedy, the hopeful, and the hopelessly naďve in Texas and around the country, the kind who seem anxious to lose money on a long-shot horse with a catchy name.

His voice deep, eyes sad, his manner warm, and his speech peppered with godly references, Petty said he never, “ever, ever, ever, ever intended to hurt anyone, nor did I ever hurt anyone. Never. Never.”

The former steel-guitar player was still living in a mobile home parked on a dirt lot in Overton, near Tyler, when TeleCom2000 hit the jackpot in 2001. Soon he had commissioned a $350,000 house to be customized with religious scenes. He doled out hundreds of thousands of dollars to investors and filled his mobile home with women, mostly single, hired at top dollar to process the cashiers’ checks that were arriving at his doorstep by the handfuls. After trying so hard for all those years to mesh with the rest of the world, Petty seemed to have finally found just the right formula.

Unfortunately for him, the world — or rather, that small part of it known by the initials FBI — viewed his formula differently. The feds called TeleCom2000 a pyramid scheme, hence the centuries of prison time now staring Petty in the face.

Eventually the passionately devoted investors who had prayed with Petty, the office workers who fawned over him, and even his own brother would betray him. He would lose everything, including his luxurious new $132,000 Mercedes with a push-button starter.

Now Petty spends his days awaiting his sentencing and poring over documents he says will vindicate him if he can just get someone in the justice system to see that his advanced technique of creating wealth for the average person is perfectly legal. It is quite complex and difficult for most people to understand but, as he’s fond of saying, you don’t need to understand electricity to turn on a light.

When Al Petty is selling Al Petty, he is a picture of self-confidence. He likes to refer to himself in the third person and by both names. His literature describes ideas that, according to Al Petty, are universally far ahead of their time. He sees himself as a master of technology, marketing, and just about anything he puts his mind to. Al Petty believes he is far more intelligent than most, a genius when you get right down to it.

It seems that everything the Overton High School dropout and self-described deeply Christian man and manipulator (but strictly in a good way) has done was big, revolutionary, and difficult for the average person to understand.

He spent most of his life devoted to music and sometimes to God, and, if his fantastic version of events is to be believed, he was a child prodigy when it came to music and the steel guitar. According to a 13-page “autobiography” that Petty offered potential TeleCom2000 investors, at age 9 he could quote so much scripture that at scripture-quoting contests at his church he “was the winner every time.” Also at 9, he took up the guitar and “began teaching guitarists that had been playing for 10 and 15 years, chord patterns and structures of chords that they had not recognized.” He “started playing professionally at the age of 12,” he said, and quickly developed a music course that was eventually adopted by Nashville musicians.

“Once again, Al was ahead of his time by 20 or 30 years,” he wrote.

Later, he moved to San Diego and wrote The History and Science of Tuning, which was “to be some 25 to 30 or 40 years ahead of its time. Over 20 years were to pass before some of the leading musicians in the world recognized the invaluable and unprecedented principles in that book. That information became a classic.” A secret one, apparently — no record of the book exists at the Library of Congress nor was it found anywhere else.

As Petty was writing his book, while he supposedly recorded music for film and television, he said he met Leo Fender of Fender guitar fame. Petty claims he left an indelible mark on the famous guitar maker. He was 23.

“After producing unparalleled efficiency in production systems in every department in which he worked, at the age of 27, Al Petty was placed in charge of the amplifier division for Fender Instrument Company,” Petty wrote.

The company was in big financial trouble, Petty said, and in desperation, Fender “asked Al to figure out a production system to salvage his amplifier division.” Petty cleaned up the mess, he said, and turned the division around, but at age 30 he moved on — and the company suffered. “After he left Fender, the management was never able to figure his system out,” Petty wrote of himself. “It was too complex.”

George Fullerton, who founded the company with Leo Fender and ran its business side, was in charge of production until the company was sold in 1965. Fullerton remembers Al Petty well and said that while it is true the Texan became supervisor of amplifier assembly, he is exaggerating “about a hundred times over” his influence on the company.

“I was in charge of all production in the factory; I was vice president of the company. Al had nothing to do with anything except being supervisor over building amplifiers, the assembly of them,” he said.

Petty said his music and other career paths blossomed soon after he left Fender. He was on the charts so much that any aspiring commercial musician would be envious, and he “became the highest-paid country entertainer in the night clubs on the West Coast.”

“Every recording he made as an artist was in the top five on the West Coast. He had two fan clubs at the time, plus the publishing companies and the record company, as well as the television, the radio show and entertaining,” Petty wrote. “Of course, as a ‘star’ he was always under threat of his life.”

In 1986, he was supposedly living the good life. He owned a $650,000 California estate with 14.5 acres of lemon groves. Neither the property nor Petty’s claims of fame on the hit charts could be confirmed, although his name is on some albums.

Petty kept the faith in God that he rediscovered in 1980 but decided to give stardom up for a 1978 Winnebago and the dream of the musical instrument he believed would be revolutionary: the Guitorchestra.

“I was determined to develop this thing,” he said.

Seeing the archaic device with its buttons and levers, most people might wonder why he went to the trouble. After all, by the time he was done “inventing” it, synthesizers had been available in electronic stores, pawnshops, and on stage for years. Nevertheless, Petty is unwavering.

“The sounds are totally authentic,” he said. “With a keyboard you are limited to this half and this half. Here, when I play this I can bend the strings like an orchestra where if it’s a string orchestra ... I developed the sounds, and they are far superior to anything on the market. What you can do with your feet and your hands and all that at the same time you just can’t do that with a keyboard.”

As he talked, the twangy sound of Petty playing “Amazing Grace” on the instrument could be heard on a 10-year-old videotape. Petty said he played on the PTL Club regularly and the videotape indeed appears to show him on the television show demonstrating the Guitorchestra from his Winnebago. A spokeswoman for Jim Bakker, the head of the now-defunct original Praise the Lord Club, said it is impossible to say how many times Petty may have appeared on PTL because records from the show are gone.

On the tape, Petty’s voice is sort of like Willie Nelson’s, but, like the instrument and Petty himself, the package just misses the mark. “It’s the story of my life. I’m not aware of anyone other than Al Petty using it,” he said of his Guitorchestra. “It’s that good.”

So it bombed, and that’s when Petty, the child prodigy musician and superstar, began his ill-fated quest for cash. He doesn’t blame the Guitorchestra directly but claims his debt caused his shift from music to finance.

“People think that at 61 years of age, I just crawled out from under a rock and decided to make some money,” said Petty, now 69. “Nothing could be further from the truth. I never tried to make money for money’s sake in my life until I was 61, and the reason I did it is because of seven years of this thing and I went hundreds of thousands of dollars in debt.”

In just a couple of years of applying himself to the world of finance, Petty had become a familiar figure to the Tyler area Better Business Bureau, visiting to defend or make a pitch for his various pre-TeleCom2000 ideas. It was around 1995 when he pulled up to the bureau in an old lavender Cadillac and emerged carrying a VCR and a television.

Bureau employees might have guessed what the Bible-quoting genius was doing there. He was constantly selling “revolutionary” ways of making people rich that were just variations of the same old pyramid marketing schemes, said Kay Robinson, who has been with the bureau since 1985 and now serves as its president.

In the same conference room where Petty made his pitch seven years before, Robinson and two other long-time employees sat amid a stack of files generated by Petty’s various capers and borrowed by the FBI. They talked and laughed about him almost nostalgically, the way three high school teachers might reminisce about a colorful troublemaker now all grown up.

“We always knew when Al was starting another deal,” Robinson said, “because we’d start getting phone calls.”

In 1995, with fresh complaints arriving about Petty’s latest endeavor, skeptical bureau employees watched as Petty made his pitch.

“He came here and set up a tv and VCR and he started selling this deal,” said Robinson. “What he did was convince us more instead of less. I mean it’s right there, and you’re saying it, and you’re doing it, and it’s a pyramid scheme.”

Into the video player went Petty’s “Auto Drivers Research Association,” an Austin-based and now apparently defunct “fraternal membership” organization that promised a free car worth up to $140,000 every year and monthly paychecks for “test drivers.”

In order to do to “test drive” a brand new car of your own for a year, all you had to do was pay $1,200 in annual dues and then get 50 of your friends to agree to do the same. For their work in reporting important data — whether the seats were comfortable, if the horn sounds all right — investors would start receiving checks right away, company literature assured. That kind of operation, often called a pyramid scheme because it requires an ever-growing base of investors to sustain the investors who came first, mostly involves getting friends to buy at a premium what you are promised to get free.

Petty was selling his scheme as a new “multi-level” marketing plan unlike anything ever seen before. Amway, Mary Kay Cosmetics, Tupperware, and other companies use multi-level marketing principles that call for business representatives to unload soap, makeup, and plastic containers on their friends. The difference is that, at the lowest level, there are actual products sold at prices comparable to their worth.

The research association, like Petty’s other schemes, failed without attracting much attention from law enforcement, either because it had few investors or because no one who lost money felt inclined to contact authorities. But that wasn’t the last time Robinson or the others at the bureau would hear of Petty.

He soon began employing a computerized telephone dialer to make his various sales pitches. The dialer would later be instrumental in the meteoric rise of TeleCom2000.

In about 1996, the Better Business Bureau received a call from a frantic employee at Trinity Mother Frances hospital in Tyler. All of the hospital’s phones, including emergency phones, doctors’ office phones, and those in patients’ rooms, were ringing. Nothing could stop them, and they couldn’t disconnect from a lengthy Petty commercial.

“They called Southwestern Bell and the police,” said Ann Harris, director of standards and practices for the bureau. “They didn’t know what to do.”

The bureau said Petty was using his “revolutionary” computer dialer to reach out and touch anybody who would answer. Harris called him at his mobile home in Overton.

“I got ahold of him and told him what he was doing; he was locking up all the hospital lines. ... I said, ‘Al, you got that dialer on?’ ‘Yeah?’ ‘Turn that damn thing off, you got the whole hospital locked up.’”

Petty, who not infrequently compares himself to Alexander Graham Bell, turned off the automatic caller and apologized.

It would not be long before Petty’s unorthodox business sense, combined with elements of the research association and his computerized phone dialer, would crystallize as TeleCom2000. To Robinson, Harris, the FBI, and a jury of Petty’s peers, TeleCom2000, launched in 2000, was clearly another pyramid scheme.

To Petty, it was legitimate and pure genius — but quite complex. When Petty was riding high on TeleCom2000 successes and a tidal wave of cash, he told his brother, Dan Petty, that he didn’t have time for the Better Business Bureau or its complaints anymore.

“I am sitting out here in the middle of the woods. I’m not registered with Dun & Bradstreet and I don’t even care,” Petty told his brother in a December 2001 conversation used in the FBI investigation. “The Better Business Bureau thinks I’m an idiot from outer space. I will not even take time to answer their complaints. Their complaints are so, so, so elementary.”(Click here to continue...)

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