Tino De Angelis

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Anthony "Tino" De Angelis (November 3, 1915 – September 26, 2009)[1] was a Bayonne, New Jersey, commodities trader who bought and sold vegetable oil futures around the world. In 1962 he started to corner the market for soybean oil, used in salad dressing. In the aftermath, investors (51 banks) learned that he had bilked them out of about $175 million in total ($1.2 billion in year 2000 dollars). The scandal is named after De Angelis's company, Allied Crude Vegetable Oil Refining Corporation.


De Angelis grew up in the Bronx, to Italian immigrant parents. He worked in a meat and fish market and, while still a teenager, managed about 200 employees. He soon found that the new National School Lunch Act program would buy practically anything, given certain price requirements. After he took over Adolph Gobel Company in North Bergen, New Jersey, he gained a large contract, but then overcharged the government $31,000. He also delivered over 2 million pounds of uninspected meat. Gobel would eventually go bankrupt.

In 1955, he formed Allied Crude Vegetable Oil Refining Corporation and other related companies to take advantage of the U.S. government's Food for Peace program. This program sold various surplus products to Europe at a low cost in order to shore up their weak post-war economies. He formed Allied in a dilapidated "tank farm" in Bayonne and, with the patronage of several major grain exporters, he began shipping massive quantities of substandard shortening and other vegetable oil products to Europe. De Angelis slowly became a major player in Europe and the commodities markets, expanding into cotton and soybeans.

Starting in 1962, De Angelis decided his network was strong enough that he could make a serious attempt to corner the market on soybean oil and started to buy massive quantities. On the basis of this huge value of inventory, he took out massive loans from various Wall Street banks and companies, and used the cash to buy all of the futures on the oil. This way he would not only own a large quantity of soon-to-be expensive oil, but also cheap futures that would soon be worth a considerable value when the prices went up. He also used this cash to pay his staff, influence the community and occasionally make sincere gestures, such as paying a government official's hospital bill.

Warehouse receipts[edit]

In the early 1960s American Express (Amex) was a respected name in traveler's checks and credit cards. The company created a new division that would specialize in "Field Warehousing," as a way for Amex to loan a business money based on an inventory of goods and commodities. Tino De Angelis was a new customer, and Amex wrote him warehouse receipts for many millions of pounds of vegetable oil. The receipts could be taken to a bank or broker and exchanged for cash. The lender would then "own" the oil as collateral.

As the exchanges became more regular, De Angelis reduced the actual amount of oil he had. The tanks at Allied Crude were increasingly filled with water, with a small, constant amount of oil floating on top. Some tanks had special compartments at the top, while others were a maze of pipes where oil could be shuttled between them to make one tank of oil appear in other tanks at key times. When inspectors visited and dipped the tanks, they found oil and everything seemed fine. The loans based on the warehouse receipts were "guaranteeing" that the oil was really in the tanks.

What puzzled authorities about the quality of Amex's Field Warehousing operation was that since De Angelis was theoretically buying so much, they essentially authenticated the existence of much more salad oil than was actually accounted for in the entire United States, according to monthly reports from the Department of Agriculture. While the warehouse operation was small for Amex, they were lenient with De Angelis, as he was one of their biggest customers. With Amex continuing to vouch for the inventories, its trusted seal of approval combined with De Angelis' talent for offering great deals attracted mainstream companies, such as Bunge Limited, Staley, and Procter and Gamble. The Bank of America also provided loans.

Scheme exposed[edit]

The inspectors were eventually tipped off by such things as attempted bribery and delivery mistakes. So, they returned to Allied's tanks in Bayonne and found the water. The result was a massive crash of the futures market, wiping out in minutes the entire value of the loans. On November 19, 1963, De Angelis's company filed for bankruptcy, at which point investors learned hundreds of millions were unaccounted for. The brokerages who handled De Angelis's futures trades were now tainted, and the next day the NYSE, worried about potential U.S. Securities and Exchange Commission involvement, suspended Williston and Beane and Ira Haupt and Co. from trading. Word started spreading as traders investigated the suspension, and desperately tried to get their holdings out of those companies.

The entire debacle was overshadowed by the assassination of U.S. President John F. Kennedy on November 22, 1963. Hours before Kennedy was shot, NY Stock Exchange president G. Keith Funston was attempting to avoid a massive crash caused by the 20,700 customers of Ira Haupt, who feared their holdings were now worthless. Because of the trading the brokerage firm did on De Angelis's behalf, they owed various banks over $37,000,000 that it could not pay. The Kennedy assassination provided the panic that Funston was trying to avoid. In 27 minutes, the Dow dropped 24 points (about 5%) and 2.6 million shares were sold off; the exchange closed 83 minutes early that day.

Investigation was led by U.S. Attorney for the District of New Jersey David M. Satz Jr.,[2][3] which revealed that De Angelis had hidden over $500,000 in a Swiss bank account, and this led to a charge of contempt, since he had declared bankruptcy. He also could not explain large cash withdrawals from Allied. Eventually, the details were sorted out, and Amex was forced to take a massive loss when they made good on their warehouse contracts. The two trading firms were eventually snapped up by larger players, and De Angelis ended up with a seven-year jail term. In the wake of the scandal, keen observer and investor Warren Buffett took advantage of the stock plunge of American Express and bought 5% of the company for $20 Million (US).

In 1972, De Angelis was released. By 1975 he was involved in another scam, this time a Ponzi scheme involving Midwest cattle. De Angelis was the controlling power of two firms; Rex Pork and Mister Pork. Using these two slaughtering companies he swindled hogs from livestock dealers in Indianapolis totaling $7 million (approximately $31M in 2016 dollars). Two of the top livestock dealers misappropriated in the case were M&R Livestock owned by Theodore C. McAninch and Farrow and Co. owned by Allan S. Farrow. De Angelis was able to continue unlawful trade with these livestock dealers by sending fraudulent letters promising payment. M&R Livestock was owed the largest amount at $3.5 million ($21M in 2016 dollars).

The swindle was documented in detail by Norman C. Miller in The Great Salad Oil Swindle (Baltimore, MD: Coward McCann Books, 1965). The book is based on Miller's coverage of the story in the Wall Street Journal, which won a Pulitzer Prize in 1964.


  1. ^ Silverman, Steve Useless information podcast, "The Case of the Phantom Vegetable Oil", January 30, 2018. Retrieved June 11, 2018.
  2. ^ "Noted NJ attorney David Satz Jr. dies at 83", Eyewitness News ABC7NY, ABC, December 27, 2009. Retrieved June 11, 2018.
  3. ^ Keller, Karen "Former U.S. Attorney David M. Satz Jr. dead at 83; pioneered casino gaming laws", December 26, 2009. Retrieved June 11, 2018.

External links[edit]

  • [1] A web page about the mafia in New Jersey contains an excerpt from Norman Miller's article.
  • Life "The Mob: Gallagher continued" "The Congressman and the Salad Oil Swindler", Life Magazine, October 25, 1968 (reprint), pages 70 - 71.