Surviving the ‘Black Bernie Madoff’

How a Cleveland entrepreneur lost everything and bounced back after tangling with an infamous con man.

Phil Davis and his iWavecube (Jesse Kramer)

“He has the ultimate belief in his ability to think like a customer,” says Boake Sells, former CEO of Revco, which also sold the deodorant.

Wal-Mart–the largest purchaser–stopped carrying the products as part of a reorganization of its merchandising. That spelled the end of BertSherm, and Davis went back to doing some consulting work.

In 1999, the avid cook and baker began a catering service. He grew that to a weekly Sunday brunch in a church basement to Phil the Fire by 2002, generating nearly $1.5 million in annual sales. He garnered high praise from area food critics, winning Cleveland Magazine’s Silver Spoon Award for best soul food restaurant two years in a row.

Then he met Wright through Earl Patton, the director of basketball administration for the Cleveland Cavaliers and a regular at Phil the Fire. Following initial meetings, Davis says Wright promised he would put up $1 million for a second location downtown. With that, the pair forged ahead to have it done by the start of the 2003 Cavs season–LeBron James’ rookie year.

Wright, however, failed to pay contractors for work that was completed to open the second spot. What’s worse, the hedge fund manager turned on Davis and tried to accuse him of fraudulently diverting money from the restaurant, according to Davis.

“He took my business right from under me,” says Davis. By April 2004, Phil the Fire restaurants were gone.

It would be a year later when Wright was finally convicted of investment fraud. He committed suicide just before being sentenced.

The damage was already done for Davis, who couldn’t even get a job as a restaurant manager and grew concerned about taking care of his daughter, now 9 years old. “This still ranks as the lowest point in my life,” said Davis, adding he had contacted federal regulators about Wright’s scheme. “I kept saying, I have to reinvent myself.”