Surviving the 'Black Bernie Madoff'
How a Cleveland entrepreneur lost everything and bounced back after tangling with an infamous con man.
Entrepreneur Phil Davis has experienced his share of ups and downs in his business life, including shuttering his first Cleveland-based venture after losing his biggest client.
But nothing could have prepared him for the day he was forced to close his award-winning chicken-and-waffle restaurant chain--Phil the Fire--amid a swirl of financial fraud accusations, lawsuits and a damaged reputation.
"I couldn't see the bottom," said Davis, 50. "A con man is only as good as you are greedy."
The con man Davis is referring to is Kirk Wright, who in 2008 was convicted for swindling just over $150 million out of 500 investors, including former NFL stars Steve Atwater and Blaine Bishop. Wright ran a classic Ponzi scheme, and to this day Davis calls him the black Bernie Madoff. Davis became a victim of the deceitful web after entering into a partnership with Wright to open a second restaurant in downtown Cleveland. Wright turned the tables on him, says Davis, by attempting to accuse him of fraud and forcing him out of his own business. Unable to get a job in the restaurant industry, Davis had to take an $8.50-an-hour job loading boxes for UPS.
It has taken the entrepreneur six years to rise from the ashes. This time around, Davis is pinning his hopes on iCubed International, through which he has designed one of the world's smallest microwave ovens, the iWavecube. Measuring less than 12 cubic inches, the mini-microwave oven has caught on slowly during the economic downturn, but he has found an outlet through online retailing. He now has his eyes set on building a $1 billion company in five years.
"We're on the cusp of doing something big," says Davis, who declined to give revenue figures but expects to sell up to 100,000 units over the next 18 months. "There's nothing I can't get done."
Davis--born and raised in Cleveland--tasted entrepreneurial life as a senior at Stanford University, when he revived the college's yearbook for African-American students. After earning an economics degree at Stanford and an MBA at University of Virginia in 1985, he landed a position at Ocean Spray in Boston.