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Sins of the father: The rebellious Sydney rich kid finding hope in a US prison

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Driving around Sydney on his L-plates in a Lexus sports car bought by his dad, Alexander Jariv had an upbringing more unusual than most.

He was suspended from school for smoking, befriended by an unsavoury casino magnate and raised in a world of unthinkable wealth - playing in harbourside pools and private jets owned by his father, James Jariv, and his father's business associate, Nati Stoliar. 

The precocious teenager in Australia is a far cry from the gently-spoken man sitting across from me in a prison in rural Oregon, wearing thin spectacles, prison-issue green trousers and a thick green jacket to ward off the autumnal fog blanketing the grass expanse that divides Sheridan Federal Correctional Institution from the drizzly world outside.

Jariv is only 30 years old. But he has risen faster, and fallen harder, than most people might in a lifetime. It was a meteoric crash that a sentencing judge attributed to the sins of his father, however, two years into his sentence for two frauds described by investigators as "complex and egregious" international schemes, Jariv is finally taking the blame.

"I was so angry for a long time but I take full responsibility now, I deserve to be where I am," he says. "I needed a shock like this in order to drastically change the trajectory of my life."

Intrigued by his family's self-detonation, I sent an interview request to Jariv in October and expected to get no reply. Three days later, an email popped up from Corrlinks, a system that allows federal inmates in the US to contact family and friends for a small payment: an inmate had a message for me.

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"I appreciate the opportunity to tell my story and communicate how I've come to terms with what I have done, and the changes I have made to ensure a successful life ahead," Jariv wrote.

Later, sitting in the prison manager's office, he says that he agonised over the request but eventually resolved to talk publicly as part of an effort to reform himself by being "radically transparent".

"In the beginning, I thought I'd just change my name," he says. "But I am that person. I've come to the conclusion that we are who we are. I've taken the time in prison to think: 'Who are you? What are your values?' My values were totally off before."

Moving to Sydney as an 11-year-old was one of several moments that Jariv can pinpoint as leading him to where he is now, serving time for frauds committed with his father and Stoliar that generated obscene amounts of money. Much of it was laundered around the world and used to fund eye-watering lifestyles.

The first moment was as a child in Las Vegas. His father was usually absent, working on business deals that followed an inevitable boom and bust cycle. Instead, he found a father figure in his neighbour, Ted Binion, a famous casino tycoon who was into heroin and guns. When Jariv was 11, his neighbour was murdered, a case that gripped America when Binion's girlfriend and her lover were both convicted then acquitted.

Soon after the murder, Jariv followed his father as he ran off to Sydney to escape a sour business deal. But Jariv snr was quickly drawn into Sydney's  developer set, starting a property development firm with fellow Israel-born businessman Stoliar.

Stoliar, a partner of the late Rene Rivkin, bought and sold mega-developments, dabbled in telcos and did business with the now jailed NSW MP Eddie Obeid and the mastermind of the ill-fated Froggy investment scheme, Karl Suleman.

He once hosted a $1100-a-head charity dinner headed by Bill Clinton at his trophy home Villa del Mare in Wolseley Road, Point Piper - one of the most expensive homes in Australia's most expensive street. Nicknamed Villa del Nightmare, a parcel bomb was once dropped outside next to his daughter's birthday presents. The home hit the headlines again in 2015 when then-treasurer Joe Hockey blocked its $39 million sale to a Chinese businessman under foreign ownership laws.

In his Lexus, Jariv bounced between his mother's house in Bondi, his father's homes across Sydney, his girlfriend's house and Stoliar's mansion.

"Dad took care of me with money. It wasn't 'let's do something together son'. It was 'here's money to do this' or 'I'll buy you this'. I think his way of expressing his love was financially," he says. "Seeing the riches and the cars and all the stuff associated with that, I looked up to [dad and Stoliar]."

Stoliar and Jariv snr's company eventually went down the tube owing $24 million and, in 2004, Jariv snr fled the country owing $6 million for an inner Sydney apartment block he sold riddled with defects to unsuspecting buyers.

Jariv, a US citizen, followed him back to Nevada and enrolled in university but soon quit to work for his father's fledgling brokerage business.

"He was pressuring me to stop going to university. My mother was so angry. He'd say 'you'll never learn what you need to know there'," he says. "It was another fork in the road, one I wish I didn't take."

The brokerage went bust in the global financial crisis but, with the help of an associate, Jariv snr merged it into a telemarketing business that his son says was "seedy" from the start.

The premise was simple and dirty. They targeted mostly elderly people wanting to sell their timeshare properties, which come with notoriously complicated exit clauses in the US. They charged fees - up to $200,000 in some cases - and strung owners along, saying one buyer had fallen through but another was waiting if they could cough up a bit more. But there were never any buyers.

In just one of the scheme's five years, they duped 1000 people and netted $6 million, according to court documents. They operated several offices around the country, drafting in Jariv snr's second wife, Jiwon Jariv, and first wife, Jariv's mother Varda, who were among eight people eventually convicted.

James Jariv and his wife Jiwon (right) were both convicted of a telemarketing fraud targeting elderly timeshare property owners.

James Jariv and his wife Jiwon (right) were both convicted of a telemarketing fraud targeting elderly timeshare property owners. Photo: Facebook

Workers used multiple aliases to bombard timeshare owners, even using "veiled threats", the documents stated. One worker joked in an internal email that an owner was "half dead already" and he had a plan for converting her to a new deal.

When complaints mounted, they would shut down the company, start another and write fake testimonials. Investigators found 15 companies in total and Jariv said "fortunes" were spent on hiring lawyers to fend off complainants. Hundreds of thousands of dollars were siphoned off to bank accounts in Australia and Israel.

Jariv says he was only half-interested in the business at the start but he became dependent on his father. By 2010, he was living in Los Angeles and fully committed to the job, earning $15,000 to $20,000 a month that was mostly blown on cocaine, partying, living in hotels and flying a private airplane his father bought for him. Police later seized the plane, Jariv's Hummer, a luxury Vegas apartment and millions in cash.

"I was drunk on money," he says. "I think I was in love with the power I had because I was the son of the owner. I became so good at justifying my behaviour."

He speaks matter-of-factly, looking me straight in the eyes with no hint of sheepishness. "I take full responsibility, I knew what I was doing," he says. "I had a choice to get out but I just didn't see it at the time. It was very hard to escape the orbit of my father."

Alexander Jariv flying his private airplane, one of several luxury items seized by police.

Alexander Jariv flying his private airplane, one of several luxury items seized by police. Photo: Facebook

In the midst of the telemarketing scam, Stoliar approached Jariv snr with a proposal to rort the emerging biofuels industry in Canada. Again, it seemed astonishingly simple. The US were offering a $1 tax credit for each gallon of biofuel sold to the US, and Canada were offering a 70-cent subsidy for each gallon produced.

Jariv moved to Vancouver, where his father and Stoliar had bought a processing plant called CityFarm that made biofuel from feedstock, such as animal fat and vegetable oil. They set up a company in America to sell the feedstock to CityFarm and another company to buy the purported biofuel from CityFarm.

They owned all three parts of the equation but, beyond a couple of test runs that Jariv says were "abysmal failures", no fuel was ever made. The same batch was driven around the triangle over and over again. Truck drivers faked offloading and loading, and Jariv submitted logs to the government claiming they were producing and importing 6000 gallons a day, generating $12,000.

"[They] had their trucks complete this cycle hundreds of times without produce actually being sold," the indictment against the trio said.

They also took advantage of laws requiring petroleum importers in the US to have a certain amount of renewable fuels in their product mixes. Biofuel producers could generate credits from their renewable fuel production and sell them to importers to meet the requirements. The trio sold millions of credits generated by their fake biofuel production, netting a further $250,000 a week. Then, they bought 23 million gallons of biodiesel mixed with petrol diesel (known as B99) and sold it to Australia and the US, claiming it was pure B100.

Prosecutors said they made $41 million in four years, much of it transferred to Australia and Israel or spent on property, gambling, travel, private school fees, jewellery and cars. Investigators later had to trawl through more than 100 bank accounts.

It was a "complex and egregious scheme to defraud fuel suppliers and the United States", US attorney Daniel Bogden, from the District of Nevada, said in 2015 when Jariv was sentenced.

The Jarivs' six-year run of deception ended one February morning when, acting on a tip-off, the FBI burst through the doors of the telemarketing company's offices in a series of raids.

Soon after, the investigation married up with a separate probe triggered by irregular Environmental Protection Agency audits of CityFarm. Investigators tracked Stoliar down in Poland, where he had moved after Sydney.

Jariv snr was arrested as he backed out of his garage with $US6000 in his pocket, claiming he was going down the road to buy blood pressure medication, bail transcripts reveal. His wife was arrested with $US15,000 in her purse. Jariv remembers the moment a US Secret Service agent in a cowboy hat burst through the door to his Texas office, held a firearm in his face and handcuffed him.

"In that instant I realised, Alex, your entire life has been built on sand," he says. "Everything you have tried to be, the choices you have made, they have all been completely backwards. In that moment, I realised how completely screwed I was."

He was sentenced to three years in prison with a further two years on parole. His father received 10 years, Stoliar served two years after pleading guilty to conspiracy to engage in money laundering, two counts of wire fraud and one count of making false statements under the Clean Air Act, and has since returned to Sydney, where he has reportedly resumed life in Rose Bay, behind the wheel of a BMW.

Two years into his sentence, Jariv is oddly optimistic. After months of anger and self-loathing he accepted that he wasn't going anywhere ("there's always euphoria in here", he says, referring to inmates who are constantly, blindly convinced they've found a loophole that will free them). Instead, he has decided to make the most of his time, reading hundreds of books, writing, working out, taking up guitar and piano again, and working as an admin officer taking the roll and assisting prisoners who are studying.

"I'm the best musician I've ever been, I'm in the best shape physically that I have ever been, intellectually I'm better than I was before," he says.

But he is lonely, wearied by monotony and terrified about the future. During the three years he spent on bail pending the outcome of his court cases, he started a web consulting business and got his realtor's licence. He hopes to return to both when he leaves and possibly start a music school for children.

Asked if he will speak to his father one day, he pauses for a while and says: "Right now, the answer is no."

"I'm not comfortable with badmouthing dad," he says. "A lot of bad things happened, yes. But, being where I am today, I would rather thank him for the lessons I've learned."

Still, the words of his sentencing judge have stuck with him. "He said: 'Alex, you're not a criminal. Your father turned you into a criminal.'"