Vargas Battles Swindlers; Comeback Begins

Fernando Vargas was approximately one year into his retirement from boxing when he made the shocking discovery that one of his bank accounts was empty. On June 14, 2010 Ventura County police arrested and booked Vargas’ business manager, Joseph Pecora, on suspicion of grand theft by embezzlement and forgery.

What made the story all the more troubling was that Pecora and Vargas had a relationship that went well beyond the norm for a business manager and a fighter. They had a friendship dating back to before Vargas turned pro.

“That's how the devil works,” Vargas said in a recent phone conversation with The Ring. “The devil was God's favorite angel.  The people closest to you always hurt you the most.”

Struggling with a spell of pneumonia that would ultimately cause the postponement of a proposed comeback bout with Henry Buchanan, Vargas gamely described his recent circumstances. At times he sounded optimistic, offering platitudes about “the next chapter” in his life, but at other times he sounded like a man nursing heartache. Vargas doesn’t temper his feelings - think of the relentless hatred he had for Oscar De La Hoya prior to their 2002 bout - and in our talk he ran the gamut from helpless despair, to sentimentality, to gentle laughter. He loves life, even as it pummels him, and he treats the saga of the missing money as just another ripple in a career known for stormy interludes.

The relationship between Vargas and Pecora began when Vargas was a young amateur sensation out of Oxnard, and Pecora, a Camarillo businessman, arranged for him to make an appearance in his cell phone store. Pecora, a man in his 40s, became friends with the teenage Vargas. They stayed in touch, and Pecora became part of the Vargas circus.

As Vargas’ star rose, there always seemed to be people around him - lawyers, advisors, various managers and financial gurus, plus an ever growing contingent of old Oxnard buddies who simply wanted to stand next to the fire of “El Feroz.” When Vargas matured and thinned out the ranks of his entourage, he kept Pecora close. “He seemed cool,” Vargas said. Vargas credited Pecora with showing him how promoters skimmed off the top of his hard-earned fortune. Vargas claimed Pecora was one of the few people he trusted, and posted Pecora's picture on his official website in the section called “family.” In interviews he referred to Pecora as “my man, Joe,” and bragged about how lucky he was to have a good friend looking after him.

Pecora also encouraged Vargas to make money outside of boxing. Suddenly, the rough kid from Oxnard was talking about buying property and creating portfolios. There was a clothing line, a communications store, a record label, and many other businesses, all under Vargas' name. Vargas never pretended to be a brilliant businessman, he referred to himself as a simple guy trying to make a buck, but he seemed happy. He had money coming in every month from ventures that didn't involve boxing. By his late 20s, a bad back and a weight problem had made the sport increasingly difficult for him, so Vargas was grateful for Pecora's business help. Pecora even introduced him to Hollywood agent Jack Gilardi, so Vargas could take small parts in movies. When Vargas created Vargas Entertainment Promotions, he bestowed his man Joe with the title of Vice President.

“And he was stealing the whole time,” Vargas said.

In 2009 Vargas named Pecora in a 59-page civil complaint that included claims of fraud, breach of oral contract, and professional negligence. Also named in the complaint were accountants from CBIZ Tax, a nationwide accounting firm, and Pecora’s daughter Christina. Charges against Pecora’s daughter were dismissed, but Joe Pecora remained the center of the investigation. Sheriff’s Captain Ross Bonfiglio told The Ventura County Star, “After a lengthy investigation, evidence was uncovered to support  ... Mr. Vargas’ allegations.”

Pecora was ultimately accused of stealing nearly a half-million dollars. Vargas allegedly lost hundreds of thousands more because of Pecora's mismanagement. Among Vargas’ many allegations was that the defendants had falsely assured Vargas that he was financially healthy, and that regulations were in place to prevent theft; that Pecora tricked Vargas into signing blank checks made out to unauthorized recipients; that numerous forged checks had been drawn against Vargas' account; and that the defendants used the money to buy condominiums in Miami.

Pecora pleaded not guilty and was released on $30,000 bail. “I am totally innocent of all charges, period,” Pecora said. But Pecora was booked again four months later, this time with added charges, including failure to appear in court while on bail. At press time he was held at the Ventura County Jail on $100,000 bail awaiting a March jury trial. Vargas eventually settled with the other defendants, but on Fernandovargas.com, Pecora's picture was obliterated by a giant red X, and the words No Longer Involved With Ferocious: Beware.

Vargas' attorney, Greg Ramirez, announced last summer that Vargas was in such dire financial straights that he had to move out of his home in Southern California, and would probably have to come out of retirement and fight again just to feed his family. It sounded a bit melodramatic, as if Ramirez was building his case against Pecora in public. But when it was announced early this year that Vargas was coming out of retirement to box again, people naturally assumed Vargas’ comeback was simply a by-product of a financial wipeout.  Meanwhile, Vargas insists his return would’ve happened regardless of the situation with Pecora.

“I was basically tired of boxing,” Vargas said of his retirement in 2007. “I’d been doing it since I was 10-years-old. I’d accomplished a lot, but it wasn’t fun no more. It was just a job. But time goes by, and you start looking at your gloves, you start looking at old tapes of your fights, you see your robes. I thought, ‘I am still young.’ I’m 33. I did a lot at a young age. Damn, I’m younger than Floyd (Mayweather.)

“So I talked it over with my wife. The one person who doesn’t lie to me is my wife. I want to fight two more years, and then concentrate on promoting."

Vargas’ last bout, a loss to Ricardo Mayorga, was under the VEP banner, and rumors surfaced throughout 2009 that Vargas might return fight just to publicize VEP. That same year Vargas attended Roy Englebrecht's Fight Promoter's University, a three day seminar on the art and business of promoting boxing. The same month Pecora was first arrested, Vargas co-promoted with Englebrecht a boxing show in Lindsey, California. He admits that fighting Buchanan is purely about the building of VEP.

“If I wasn’t the promoter, I wouldn’t do it,” Vargas said of the event called “The Return of the Aztec Warrior,” another co-promotion with Englebrecht. “There’s no better feeling in the world for a fighter than to know he’s promoting himself. I never knew what was going on before. I’d just show up to fight, put the other guy to sleep, and say, Where is my money? I had no idea what went on behind the scenes. Now, I am learning. Englebrecht is an example of the sort of man I want to work with.”

Vargas denies that he’s broke. He said his attorney's dramatic comments were designed “to make Joe sound even worse than he is. Believe me, I’m fine. I have buildings all over the place.”   

Pecora, though, has claimed that Vargas has had money trouble since 2005. “He spent money faster than he could make it — cars, homes, jewelry, lavish weekends with his buddies, paying for flights for everybody to go to Tucson,” Pecora told The Ventura County Star. According to sheriff's officials, Pecora had access to Vargas’ bank accounts and “was involved in the grand theft and forgery of one or more of those accounts,” but Pecora claimed to have had no access to Vargas' accounts, and has since described Vargas as a paranoid, “vindictive” man.

“Everybody who’s ever been involved with him, he thinks has stolen from him,” Pecora said, claiming Vargas has fired a number of bookkeepers and accountants in the past. “And nobody steals from him.”

Vargas does have a reputation for making sweeping changes within his inner circle, but he would say that a lot of fighters do the same thing. And he has found himself in some strange legal battles– in 2009 he took his own mother to court over a property dispute.

But to say nobody steals from him is wrong.

In 2002 Vargas was awarded a large settlement after suing sports agent Robert Caron for fraud. The recently deceased Caron, a former personal injury lawyer who partnered with some of the biggest Ponzi schemers in California, was known for taking money from investors and placing it with a crooked Orange County group known as DFJ Italia. The head of that group was Luigi DiFonzo, a con artist who told clients he was an Italian Count with access to European royalty; he promised investment opportunities not open to regular folks. (Amid allegations that he'd swindled nearly 40-million dollars from clients, DiFonzo committed suicide in 2001.) Caron was also in league with notorious Oxnard scammer Donald Lukens, who specialized in taking advantage of women and gullible athletes. (Vargas' mother signed a contract with Lukens back when Vargas was an amateur, nearly costing Vargas his spot on the US Olympic team.) NFL and NBA players were the favorite targets of Caron, DiFonzo, and Lukens, but a few boxers were victimized, including Robert Garcia, Hall of Famer Terry Norris, and Vargas.

The Vargas of 2011 doesn't resemble the flashy spender described by Pecora. If anything, he sounds pragmatic, older and wiser, and a bit weary of always having “to weed certain people out.” As for Pecora’s comments, Vargas said, “He thought he was smart, but he’ll be in jail, and I’m the one happy and laughing.”

Amid the sounds of children playing in the background, Vargas unexpectedly began waxing nostalgic about his own childhood. He told a story about being 10-years-old, making the long, lonely walk to the Colonia boxing gym, where he was befriended by a kindly trainer who offered him rides. The world of boxing, in those days, seemed a safe place where Vargas would find love and support, not the vipers’ nest of conmen and crackpots he has since found. When asked if his outlook has been forever damaged, his voice dropped to a deadly serious tone.

 “I’m very suspicious of everyone,” Vargas said.

“He was stealing from me for years. I don’t know why he did that. He stole from me and my family. You know, his mother died recently, which was sad, but I don’t want nothing to do with him. I’ll be working close with the D.A. to make sure he gets the maximum amount of time behind bars.

“I give praise to God we found out about him in time. Every night, I get on my knees and I ask God to please take away the people who want to take from me. I will give anything to anybody, but please, stop these people who want to do me harm.”

Vargas believes VEP will be one of the great successes of his career. And no one gets involved unless they’re a shareholder, which Vargas hopes will be a safeguard against predators. “You want to be in it, you’ll have to put in some money of your own. I’m putting in my money, so you do, too. If you don't want to do it that way, I don't need you.” Then, sounding a bit like the Feroz of old, he added what should be VEP’s business motto. “From now on, everyone puts in a pound of flesh.”

Don Stradley is a freelance writer from Massachusetts and a regular contributor to The Ring.