If you were a smoker, you'll remember Salem for having been the first filter-tipped menthol cigarette. If you were (like me) in mari-time transport (on and off four times), you'll remember Salem for having been the biggest maritime fraud ever perpetrated.
The Salem was a supertanker which was scuttled off the coast of Guinea on 17 January 1980, after secretly unloading 192,000 tons of crude oil in Durban in defiance of the South African oil embargo. The ship's owners then presented Lloyd's of London with an insurance claim of US$56.3 million, the largest single claim received up to that time. Go and read Klinghoffer's book or look at the unadorned facts here and here.
Although the tanker was supposed to have sunk so quickly that not even the ship's log could be saved, the shipwrecked crew had taken all their personal belongings as well as duty-free goods and wrapped sandwiches.
One apocryphal story even suggested that they had booked in advance hotel rooms in Dakar where they eventually came ashore. Methinks it was the sandwiches that gave them away, be they plain or toasted.
As for the mastermind behind this audacious fraud, he escaped:
JAMES NOLAN | May 30, 1988
When Frederick Soudan, the mastermind of the world's largest maritime fraud, decided it was time to leave federal prison he called his wife from a phone booth.
She drove up. They drove away.They have phones there that aren't monitored, said one lawyer involved in the case. I suspect he just called and said, 'Hello dear. It's time to come get me' and she did.
Outside the minimum security prison near Fort Worth, Texas, the pickup was so unobtrusive that federal prison guards barely remember Mr. Soudan leaving. And in Washington, the Justice Department believes it has bigger fish to fry. The matter is settled so far as we're concerned, said a spokesman. He was caught, convicted, sentenced and escaped.
But on an international scale, insurance investigators and anti-fraud detectives are outraged that the perpetrator of the notorious Salem supertanker scam is free.
After years of international legal wrangling and complex criminal investigations, Mr. Soudan now is not only free but probably still wealthy - with an estimated $2 million cachedin Swiss and Bahamian banks.
We're very disappointed, said Eric Ellen, the director of the International Maritime Bureau. If you can't hold him in prison the whole deterrent effect goes immediately.
The escape, simple compared to his other crimes, was only the latest chapter in Mr. Soudan's book of world-class tricks. His crimes have given him a perverse air of Homeric greatness. The Salem caper now holds the Guiness Book of World Records' title as World's Largest Maritime Fraud.
Guiness claims the Salem fraud eventually cost Shell Oil Co. $305 million. Court testimony showed that the crime began when the audacious Mr. Soudan talked sophisticated London merchant bankers into lending him some $15 million to buy the supertanker Salem. Then he hired Greek officers and a crew of Tunisians.
The plot turned on South Africa's unquenchable thirst for oil. The racially troubled nation is not deemed a legitimate customer by the Middle East oil kingdoms.
The Soudan ring got a contract to deliver oil worth $45 million to Durban, South Africa, in 1980. The ship loaded in Kuwait and, while it was at sea, Mr. Soudan succeeded in selling the cargo again to Shell.
The oil was delivered to Durban. Then the Salem loaded its tanks with seawater and headed up the coast of Africa, faking a course for Rotterdam, the Netherlands, to make delivery to Shell.
A hundred miles off the coast of Senegal, the crew opened valves in the ship's bottom to let in the sea water and took to lifeboats. Down the giant ship sank, in mile-deep waters.
The first suspicion of a scam came when it was reported that the crew wore shore-going clothes and carried well-stocked suitcases into the lifeboats.
Arthur Jay Klinghoffer, a Rutgers University professor, has written a book about Mr. Soudan called Fraud of the Century: the Case of the Mysterious Supertanker Salem. It's due out later this month.
Mr. Klinghoffer says trial testimony taken in Rotterdam; Athens, Greece; Houston; and Liberia shows that Mr. Soudan got a tidy sum of loot.
Fred Soudan got $4.25 million. But he had expenses and paid off debts so we estimate he's got $2 million now. It's in Swiss banks and the Bahamas, said the professor of political science.
In 1985, Mr. Soudan was sentenced to 35 years in a minimum security prison in Fort Worth. And last December, he escaped.
Mr. Soudan was born in Tyre, a Lebanese port in the eastern Mediterranean. But the 45-year-old Mr. Soudan made his business in the United States. He had moved to Houston in the glory days of the oil patch, won U.S. citizenship and grew rich as an oil broker.
And it was in the international oil business that Mr. Soudan learned the gift of persuasiveness that would serve him so well - and international commerce so poorly.
U.S. District Judge Carl O. Bue, a former admiralty lawyer, tried the case in Houston. Now retired, the judge recalled Mr. Soudan.
Many people in life are gifted with a glib vocabulary and charming personality. Mr. Soudan was one of these, Judge Bue said.
David Berg, a trial lawyer who defended Mr. Soudan, said the judge rejected a plea bargain. The terms of the proposal called for Mr. Soudan to plead guilty to some counts and serve three years.
The trial, Judge Bue said, was no back-alley scrap. This was a very sophisticated case. You had people come over from Lloyd's of London; detectives from Scotland Yard; South African police; people from Greece.
The Justice Department sent down two of their top prosecutors from Washington. Very able lawyers to deal with issues that were novel. Nothing like it ever before.
I am sure the maritime industry would like the case to go away and its like never be seen again, Judge Bue concluded.
Mr. Berg laughed as he reminisced about Mr. Soudan.
Down here, we think that he had his mind fixed on the three-year term in the plea bargain. That time came, and he just looked around and said: 'Well, I have done my time. That's it. Time to go.' Then he just walked out, Mr. Berg said.
Clint Peoples, a U.S. marshal for the Southern District of Texas in Dallas, has issued a warrant for Mr. Soudan. Paris-based Interpol is looking for him.
Mr. Peoples said that Mr. Soudan's Spanish-born wife, a very pretty young lady, bought airline tickets to Madrid, her home. Some feel he has returned to Lebanon, where the long arm of the law catches few these days.
Others, at Lloyd's of London, feared briefly that he would seek revenge against those who testified against him, according to some sources.
Still other investigators say he may be in Spain. In the Whitehall Club in New York City, maritime officials speculate that Mr. Soudan may have met with foul play from some colleague in crime. Whatever the case, Mr. Soudan has simply disappeared.
He was in the Federal Correctional Institute for the morning head count and at night he was just gone, Mr. Peoples said.
