Murder of Shao Tong

 

On September 26, 2014, police found a body later identified as 19-year-old Shao Tong (Chinese: 邵童, November 1994 – September 2014), a Chinese undergraduate at Iowa State University (ISU), in the trunk of a car registered in her name parked in an apartment complex on the outskirts of Iowa City, Iowa. She had been reported missing nine days earlier. The cause of death was found to be homicide by suffocation.

Shao had last been seen on September 7 at a hotel outside Nevada, Iowa, a small town east of Ames, where ISU is located. She had been spending the weekend there with her boyfriend, Li Xiangnan (Chinese: 李向南), a student at the University of Iowa, located in Iowa City. Her car and body were in the apartment complex he lived in.

Li was not present. Police believe that after abruptly checking out of the hotel the following morning, he had used her phone to text her friends that she was going to be away for a while and that Li had to return to China for a family emergency. While there was no evidence of Shao's purported travel, Li had flown back to Beijing, but beyond that point his whereabouts were unknown.

Early in 2015, authorities in Johnson County charged Li with first-degree murder and obtained an arrest warrant. Chinese Internet users began circulating pictures of Li, who remained at large. After Chinese detectives traveled to Iowa to visit the crime scene and review evidence, they too charged Li with intentional murder under Chinese law, which allows the prosecution of any Chinese citizen for a crime even if it occurred abroad. He surrendered to police in his native Wenzhou in May. The case was prosecuted there, since not only is there no extradition treaty between China and the United States, China does not extradite its own citizens. In March 2016, he pleaded guilty; three months later, he was given a life sentence, which could be reduced to a prison term of no less than 13 years.

Background

Shao was born in the coastal Chinese city of Dalian in 1994, the only child of a family typical of China's emerging middle class. Her father was a civil servant who worked in food safety inspection and her mother was a homemaker. Shao attended Dalian Yuming High School and aspired to become a biologist.

Yuming students routinely perform well on China's National Higher Education Entrance Examination or gaokao, and in the Olympic Competition, which offers winners admission to college without having to take the gaokao. In the late 2000s, Shao and her then boyfriend entered the competition. He won and attended a prestigious university in southern China; she did not.

She decided to study in the U.S. instead, which she was able to do because her parents had saved over US$100,000 toward her education. In 2011 she went to Beijing to take a preparatory course for the Test of English as a Foreign Language. There she met Li Xiangnan, three years her senior, from Wenzhou. Shao's mother said he developed a crush on her daughter, which was not unusual—many other young men had shown such an interest in her daughter. She met him once when he came to Dalian, and recalled him as shy. Although he seemed to be from a rich background, she and her husband did not think he was right for their daughter.

Shao was accepted at Iowa State University (ISU), in Ames, where she majored in chemical engineering in 2012, a choice that pleased her father, since not many women enter that field. Li "chased [her] from China to the U.S," an acquaintance said, transferring from Rochester Institute of Technology to the University of Iowa in Iowa City, 140 miles (230 km) away, where he studied business. At Iowa State, friends, mostly fellow Chinese students, recalled her as being very outgoing, tutoring students in Chinese and dancing at parties. She also distinguished herself for her ability to solve Rubik's Cube quickly. Although engineering was not her favorite subject, she maintained a grade point average of 3.75.

Li and Shao continued to socialize in Iowa. According to her friends, he seemed to believe he was her boyfriend, although others who knew her said she had ongoing relationships with other men as well, not all of whom were aware of the others. He moved in with her in summer 2013, to the great annoyance of her roommate. "He didn't clean up. It's just not normal that a boy lived in a girl's dorm," she told a Chinese news outlet. "We tried to kick him out, but he wouldn't leave." In early 2014, he gave Shao's address as his on two occasions when he was cited for traffic violations while driving his 2009 BMW in Coralville, outside Iowa City.

Shao's other friends shared the same low opinion of Li, to the point that Shao avoided talking about him in their presence. A cousin in China noted that on visits home, Shao seemed more withdrawn than she had been in the past.

Disappearance

On September 3, 2014, Karen Yang, a friend of Li, got a call from him. Li said that he had called Shao, and he could hear her conversing with another boy about him, making disparaging remarks. After calling Yang, he posted "fuck my life" in Chinese to his page on Renren, a social networking site popular with Chinese college students. It was his last post to the site.

Despite this, Li and Shao took advantage of the ensuing weekend to spend some time together. Since his presence was not desired by her roommates, they got into the 1997 Toyota Camry she had bought during a summer internship in Kentucky and checked into the Budget Inn off U.S. Route 30 near Nevada, Iowa, a small town east of Ames, on September 5. The hotel owner, Ken Patel, recognized them from two earlier stays over holiday weekends.

The following night, Patel says he saw Shao come to the lobby alone. It would be the last time anyone other than Li saw her alive. On the morning of September 7, Patel said that he woke and saw that Shao's gold car, in which the two had come from Ames, was already gone. This was unusual, he later stated, because on the couple's previous stays he had had to go to their room after they missed the 11 a.m. checkout time. While the hotel had a security camera on constantly, its feed was not recorded anywhere.

That night, Shao's father sent a text to her phone from China. He wanted to know if she had had any success replacing a pair of glasses she had told him several days earlier that she had lost. The responding text said that she had borrowed a pair from a friend. He asked if they could video chat, but she said she was too busy at the time. In retrospect he believes that those messages actually came from Li.

Another text, purportedly from Shao, was sent from Li's phone to one of Shao's roommates. It said that Li was going back to China due to an "emergency" and that Shao was going to take a bus to Minnesota and visit some friends from China there in the next week. The following day, Karen Yang sent Li a text asking how things were going with Shao. "Fine for now," he responded.

A week later, on September 16, Li's birthday, Yang sent him a text. He did not respond. "He was never like that," she recalled later to a Chinese publication. "He replied [to] messages promptly." She began to suspect that something was wrong.

Around that time, Shao's roommates began to wonder when she was planning to return as the week had passed and they had not heard from her. Through social media, they contacted her friends in Minnesota. None of them had seen her. "That's when we started to get really worried," one said. They reported her missing to Ames police on September 18.

Discovery of body

Ames police were unable to find any evidence that Shao had taken a bus to Minnesota. They searched Shao's apartment the following week. They found a receipt for the Toyota Camry Shao had purchased in Kentucky, which still had that state's license plates on it. On September 26, they made the description and plate number of the car available to other police departments.

Police in Iowa City had also obtained a search warrant for Li's BMW the previous week, parked near his apartment off U.S. Route 6 on the eastern outskirts of the city. On the evening that their Ames counterparts posted the information about Shao's car, they found it nearby. Residents of the complex said it had been there for some time, and complained of the smell emanating from it. After a warrant was obtained, police found a body in the trunk, its decomposition accelerated by exposure to the late summer heat. It was later confirmed to be Shao.

Investigation

Police immediately called the death suspicious. The autopsy found the cause of death to be asphyxiation and blunt force trauma, likely inflicted by another person. It did not fix a time of death beyond that when her body was discovered, due to the lack of information about the circumstances in which it had occurred. Her head was found wrapped tightly in a towel consistent with those at the Nevada Budget Inn where she and Li had stayed, and next to the body in the trunk was a 15-pound (6.8 kg) barbell.

Also in the trunk were travel documents showing that on September 6, Li had booked a flight from Eastern Iowa Airport in nearby Cedar Rapids to Chicago and then to Beijing. Cell phone records showed that the texts to Shao's friends had been sent from Chicago while he was on a layover there between flights. In Li's apartment, police found further evidence suggesting a hasty departure. Groceries had not been put away, an open container of milk had been left on a counter long enough for it to have spoiled, and luggage had been left behind.

Three days after the body was discovered, a search warrant was executed on the hotel room in Nevada that Li and Shao had shared. In it they found "splatters and drips of various dried liquids," which they sought to test to see if they had been human bodily fluids. They came to believe that Shao had been murdered at the hotel before her body was placed in the trunk of her car and driven to the parking lot of Li's apartment complex in Iowa City.

Upon further investigation, police learned of Li's September 3 "fuck my life" social-media post and the circumstances that gave rise to it. A Chinese friend of Li's in Iowa also reported that at a party a month before Shao's disappearance, Li had asked how long it would take the police to know if a person was missing. They found this odd because his question had no relation to the conversation they had been having. Iowa City police soon named Li a person of interest in the case.

Police were unable to locate Li so they could talk to him, believing that, as the evidence suggested, he had returned to China. They later received confirmation that he had cleared customs in Beijing on September 10. Since then there had been no record of him anywhere in China or elsewhere.

Chinese media had been following the case closely, since Chinese parents who send their children overseas to attend college are very concerned for their safety. Users on the Chinese social media sites Sina Weibo and WeChat had begun circulating Li's picture and other identifying information along with the hashtag #FindLi. In a two-day period there were 150,000 posts related to the case, receiving 2.2 million views. A reporter in Li's hometown of Wenzhou said his newspaper had called two local phone numbers looking for Li; at the one which was answered, the person on the other end hung up when asked about him. The same reporter said in a WeChat post that his colleagues could not say whether Chinese police were looking for Li as well.

Arrest and charges

In an April 2015 CNN article about the case, Shao's father asked that Chinese and American authorities cooperate and share information to help capture Li and bring him to trial. He said that a few weeks earlier, the Iowa City police had told him that the Johnson County district attorney's office had charged Li with first-degree murder and issued an arrest warrant. Under Iowa law, prosecutors may in certain circumstances keep the existence of a warrant and any related indictment secret until after the arrest is made, and they did not confirm whether they had done so in Li's case.

Cooperation between the Chinese and American police did eventually increase. The Wenzhou police began monitoring Li around the same time. While they were occasionally able to find his whereabouts, he usually disappeared before they could get him under surveillance. They also lacked any evidence to charge him, since they were waiting for information from Iowa.

Later in April, investigators from China flew to Iowa and, accompanied by their American counterparts, interviewed witnesses and studied the crime scene. They returned to China with this evidence. In mid-May Li turned himself in to authorities in Wenzhou. Using the evidence from Iowa, agents from the Bureau of Criminal Investigation developed a case against him while Li remained in detention. At the end of June the Ministry of Public Security announced Li's formal arrest on a charge of intentional murder.

Li faced execution. Under Iowa law, the mandatory sentence would be life without parole.

Shao's father said he had been told that Li would be tried in China even though the crime occurred in the United States. The two countries do not have an extradition treaty, and China does not extradite its own citizens. It was not be the first such case in recent history: in 2010, a Shanghai court convicted Xiao Zhen of murdering a taxi driver in Auckland, New Zealand, before fleeing to China. Police in New Zealand shared their evidence with their Chinese counterparts only on the condition that Xiao would not be sentenced to death, since their country had abolished capital punishment.

The case also recalled the similar murder of Amanda Zhao in the Canadian province of British Columbia. Zhao had been killed by her boyfriend, Li Jiaming, while attending Coquitlam College. He reported her missing; ten days later, hikers found her body stuffed in a suitcase near Stave Lake, 60 miles (97 km) away. Li and another Chinese student came under suspicion and returned to China, where he was arrested but released for lack of evidence. Meanwhile, the Royal Canadian Mounted Police had built a case against him that led to a murder charge in Canada against Li and an accomplice. They would not share the evidence with their Chinese counterparts out of concerns, similar to those that attended the Xiao investigation in New Zealand, that Li would be sentenced to death if convicted. Eventually those concerns were resolved, and the two were charged in 2009. He was convicted three years later and sentenced to life, but on appeal in 2014 the Supreme People's Court reduced the conviction to manslaughter and the sentence to 7 years, accepting Li's argument that the death was the result of a pillow fight that got too vigorous.

Trial

In March 2016, Li pleaded guilty to the charge in Intermediate People's Court in Wenzhou. He called his act "irrational and impulsive," saying he had loved her but was unable to deal with her having affairs with other men. However, he denied that he had planned the crime in advance, saying he had bought the plane ticket a few days in advance because he intended to go back to China in any event due to the stress he was feeling. Li begged the court for leniency on these grounds. He faced a sentence that could range from ten years in prison to death. His parents have paid the Shaos CN¥2 million, approximately US$300,000, in compensation.

Investigators from Iowa traveled to China to witness the proceedings. After they returned to Iowa, they revealed more details about the case in a news conference. They were still unsure about when exactly Shao had died, believing it most likely that she had survived Li's initial beating only to suffocate after he stuffed her body into a suitcase and put it into her trunk. Despite Li's claims in court that it was a crime of passion, the Iowa investigators believed instead that he had planned the killing in advance, and that his original plan was to put weights in the suitcase and sink it in the Skunk River. However, the shallowness of the river made that impossible. In August, Li was sentenced to life imprisonment.

Crime in Iowa

Deaths in September 2014

Disappearance of Bethany Decker, 2011 Virginia missing-person case where friends of victim believe someone was trying to impersonate her on social media after she was last seen.

Other homicides by Chinese abroad tried in China

Trial of Xiao Zhen, in New Zealand

Zhang Hongjie, a Chinese student in Australia whose death went unnoticed for seven months as her boyfriend, believed to have killed her, sent messages to her friends and family claiming to be her, then fled to China after the body was finally discovered.

Fukuoka family murder case, committed by three Chinese students, Wei Wei, Yang Ning, and Wang Liang, in Japan. Wei Wei was tried in Japan, sentenced to death, and executed on December 26, 2019, at the age of 40. Yang Ning and Wang Liang fled to China, where they faced murder charges. Yang was sentenced to death and Wang was sentenced to life in prison. Yang was executed on July 12, 2005, at the age of 25.

References

Zhang Han; Wang Lingyu; Zhong Ying (April 14, 2015). "In-depth: Uncovering truth behind murder of Chinese student in US". Sino-US.com. Archived from the original on March 4, 2016. Retrieved August 16, 2015.

Hermiston, Lee (January 7, 2015). "Warrants reveal details in investigation of Tong Shao's Iowa City death". The Gazette. Cedar Rapids, IA. Retrieved August 16, 2015.

berg, Zach (January 9, 2015). "Death of former ISU student found dead in IC ruled a homicide". Iowa City Press-Citizen. Retrieved August 16, 2015.

berg, Zach (January 16, 2015). "Tong Shao stayed in hotel with boyfriend days before going missing". Iowa City Press-Citizen. Retrieved August 16, 2015.

Aronsen, Gavin (July 2, 2015). "ISU student's suspected killer apprehended in China". Ames Tribune. Archived from the original on July 27, 2015. Retrieved August 16, 2015.

Lu, Shen; Hunt, Katie (March 23, 2016). "Boyfriend in Iowa killing pleads guilty; may face death penalty". CNN. Retrieved May 12, 2016.

Lu, Shen; Hunt, Katie (June 22, 2016). "China: Boyfriend in Iowa student killing gets life sentence". CNN. Retrieved June 23, 2016.

Drash, Wayne; Lu, Shen (April 3, 2015). "Killing in the heartland; heartbreak in China". CNN. Retrieved August 17, 2015.

Schmidt, Mitchell; Klingseis, Kathleen (September 30, 2014). "Police: Body in trunk is missing ISU student". The Des Moines Register. Retrieved August 17, 2015.

"Budget Inn and Suites, Nevada, Iowa" (Map). Google Maps. Retrieved August 17, 2015.

Berg, Zach (January 7, 2015). "Investigators say Tong Shao was not 'missing voluntarily'". Press-Citizen. Retrieved August 18, 2015.

Whitworth, Jodi (September 28, 2014). "New Details Emerge About Car Tied to Missing ISU Student's Investigation". WHO-TV. Retrieved August 18, 2015.

Hermiston, Lee (January 9, 2015). "Medical examiner says Tong Shao died of suffocation; death now considered homicide". The Gazette. Archived from the original on June 29, 2015. Retrieved August 18, 2015 – via KCRG-TV.

Erickson, Melissa (January 15, 2015). "Nevada hotel connected to Shao murder case". Ames Tribune. Retrieved August 18, 2015.

Carlson, Mark (September 30, 2014). "Chinese media closely watching case of ISU student Tong Shao". KCRG-TV. Archived from the original on April 7, 2015. Retrieved August 18, 2015.

Hua Shengdun (April 6, 2015). "Report stirs up unsolved murder case". China Daily. Retrieved August 18, 2015.

Shen Lu (September 30, 2014). "Friends Of 'Person Of Interest' Respond To Chinese Student's Death". Iowa Watch. Retrieved August 18, 2015.

Shen Lu (June 30, 2015). "Suspect in Iowa student murder charged after months on the run in China". CNN. Retrieved August 19, 2015.

"Iowa City Police and Chinese Police Make Arrest in Tong Shao Homicide" (Press release). Des Moines, IA. Iowa Department of Public Safety. June 30, 2015. Retrieved August 20, 2015.

Iowa Code 707.2.6: "Murder in the first degree is a class 'A' felony." Iowa Code 902.1: "[upon conviction or a guilty plea, the court] shall commit the defendant into the custody of the director of the Iowa department of corrections for the rest of the defendant's life. Nothing in the Iowa corrections code pertaining to deferred judgment, deferred sentence, suspended sentence, or reconsideration of sentence applies to a class 'A' felony, and a person convicted of a class 'A' felony shall not be released on parole unless the governor commutes the sentence to a term of years."

Carlson, Mark (March 28, 2016). "Back From China, Authorities Reveal New Details in Tong Shao Murder Case". KCRG-TV. Retrieved May 13, 2016.

Shen Lu and Katie Hunt (23 June 2016). "Boyfriend in Iowa student killing gets life sentence". CNN. Retrieved 2019-04-13.

Vicki Wegerle

 

Dennis Rader describes Vicki Wegerle's murder

WICHITA, Kansas -- Judge Gregory Waller: Sir in Count 9 it is claimed, on or about the 16th of September 1986, in Sedgwick County, Kansas, that you unlawfully killed a human being, Vicki Wegerle, maliciously, willfully, deliberately and with premeditation by strangulation, inflicting injuries from which said Vicki Wegerle did die on September 16th 1986. Can you tell me what you did here in Sedgwick County on that day that makes you believe you are guilty?

Dennis Rader: Yes. Again, Vicki Wegerle was a potential victim. I went through those different phases, locked in on her as I would call it and decided that I would try that date. I used a ruse as a telephone repairman to get in her house. [I] drove there in my own personal car around lunch time having lunch hour or approximately that time. It was earlier in the morning then. And uh put my.. I actually went somewhere else and changed uh, changed my clothes into what I call my 'hit clothes.' And um...

Judge: Hit Clothes?

Rader: Hit Clothes. Basically different, you know, things I need to get rid of later. Not the same kind of clothes I had on. I don't know a better word to use it -- crime clothes or hit clothes -- I just call them hit clothes. Uhh, anyway I walked from my car as a telephone repairman. As I walked there I donned my telephone helmet. I had a briefcase. Went to one other address just to kind of size up the house. I'd walked by it a couple of times but I wanted to check it a little bit more. As I approached it I could hear a piano sound. I went to this other door, knocked on it and told them that we were recently working on telephone repairs in the area. And then went to her and knocked on the door and asked if I could check her telephone lines inside.

Judge: Did she allow you in?

Rader: Yes she did.

Judge: What happened then?

Rader: Uhh, went over and found out where the telephone was, simulated that I was checking the telephone. I had a make believe instrument and after she was looking away I drew a pistol at her asked her if she would go back to the bedroom with me.

Judge: Is this the same .357 Magnum you'd used earlier?

Rader: No, this was a different one.

Judge: A different pistol?

Rader: *Nods*

Judge: Alright, you asked her to go back to the bedroom with you after drawing the pistol on her?

Rader: Yes, Sir.

Judge: What happened then?

Rader: I told her, when we went back to the bedroom, I told her I was going to have to tie her up. She was very upset. And I think we, I, used some material that was in, and that's another thing, I'm not sure but I that I used the material that they had in their bedroom, and after I tied her hands she broke that and we started fighting. And we fought quite a bit, back and forth.

Judge: She was physically fighting you?

Rader: Oh yeah, yes sir.

Judge: What happened then?

Rader: I finally got the hand on her and got a nylon sock and started strangling her.

Judge: So you wrapped the stocking around her neck?

Rader: *Nods* Yes.

Judge: So what happened then?

Rader: I finally gained on her and put her down and I thought she was dead but apparently she wasn't. But, uh, after she was down and not moving any more I rearranged her clothes a little bit and took some quick photos -- I think three of them if I remember. And then after that there was a lot of commotion. She had mentioned something about her husband coming home so I got out of there pretty quick. The dogs were raising a lot of cain in the back. The doors and windows were all open in the house. There was a lot of noise when we were fighting so I left pretty quickly after that. Put everything the briefcase and had her, I already gone through her purse and got the keys to the car, and used her car for my get away car.

Judge: Alright, you indicated that you thought that she was dead. Did you assume later that she was not dead.

Rader: Yes. I guess the paramedics arrived and they tried to attempt to relieve her, revive her, and that failed. I don't know if she died there or on the way to the hospital or at the hospital. I don't recollect.

Judge: But you later found out that she did die as a result of your strangulation.

Rader: Yes.

Bankruptcy of Lehman Brothers

 

The bankruptcy of Lehman Brothers, also known as the Crash of '08 and the Lehman Shock, on September 15, 2008, was the climax of the subprime mortgage crisis. After the financial services firm was notified of a pending credit downgrade due to its heavy position in subprime mortgages, the Federal Reserve summoned several banks to negotiate financing for its reorganization. These discussions failed, and Lehman filed a Chapter 11 petition that remains the largest bankruptcy filing in U.S. history, involving more than US$600 billion in assets.

The bankruptcy triggered a 4.5% one-day drop in the Dow Jones Industrial Average, then the largest decline since the attacks of September 11, 2001. It shook confidence in the government's ability to manage the crisis and prompted a general financial panic. Money market mutual funds, a key source of credit, saw mass withdrawal demands to avoid losses, and the interbank lending market tightened, threatening banks with imminent failure. The government and the Federal Reserve system responded with several emergency measures to contain the panic.

Lehman Brothers' parent company, Lehman Brothers Holdings, remained in liquidation until September 28, 2022. Lehman's 110,000 customers received all $106 billion they were owed. General unsecured creditors received back $9.4 billion, or 41 cents on the dollar.

Background

Rise of mortgage origination (1997–2006)

Lehman Brothers, one of the United States and the world's bulge-bracket investment banks, was one of the first Wall Street firms to move into the business of mortgage origination. In 1997, Lehman bought Colorado-based lender Aurora Loan Services, an Alt-A lender. In 2000, to expand their mortgage origination pipeline, Lehman purchased West Coast subprime mortgage lender BNC Mortgage LLC. Lehman quickly became a force in the subprime market. By 2003 Lehman made $18.2 billion in loans and ranked third in lending. By 2004, this number topped $40 billion. By 2006, Aurora and BNC were lending almost $50 billion per month.

Lehman had morphed into a real estate hedge fund disguised as an investment bank. By 2008, Lehman had assets of $680 billion supported by only $22.5 billion of firm capital. From an equity position, its risky commercial real estate holdings were thirty times greater than capital. In such a highly leveraged structure, a three- to five-percent decline in real estate values would wipe out all capital.

Exposure to the mortgage market

Lehman borrowed significant amounts to fund its investing in the years leading to its bankruptcy in 2008, a process known as leveraging or gearing. A significant portion of this investment was in housing-related assets, making it vulnerable to a downturn in that market. One measure of this risk-taking was its leverage ratio, a measure of the ratio of assets to owners equity, which increased from approximately 24:1 in 2003 to 31:1 by 2007. While generating tremendous profits during the boom, this vulnerable position meant that just a 3–4% decline in the value of its assets would entirely eliminate its book value of equity. Investment banks such as Lehman were not subject to the same regulations applied to depository banks to restrict their risk-taking.

In August 2007, Lehman closed its subprime lender, BNC Mortgage, eliminating 1,200 positions in 23 locations, and took a $25-million after-tax charge and a $27-million reduction in goodwill. The firm said that poor market conditions in the mortgage space "necessitated a substantial reduction in its resources and capacity in the subprime space".

Lehman's final months

In 2008, Lehman faced an unprecedented loss due to the continuing subprime mortgage crisis. Lehman's loss resulted from having held onto large positions in subprime and other lower-rated mortgage tranches when securitizing the underlying mortgages. Whether Lehman did this because it was simply unable to sell the lower-rated bonds or made a conscious decision to hold them is unclear. In any event, huge losses accrued in lower-rated mortgage-backed securities throughout 2008. Regulators began preparing contingencies, including unofficially approaching Barclays executive Robert Diamond about acquiring Lehman in April 2008; by then United States Treasury Secretary Henry Paulson had told Lehman CEO Richard Fuld that there would be no government bailout, so his firm needed to do a deal.

In the second fiscal quarter, Lehman reported losses of $2.8 billion and decided to raise $6 billion in additional capital by offering new shares. In the first half of 2008 alone, Lehman stock lost 73% of its value as the credit market continued to tighten. In August 2008, Lehman reported that it intended to lay-off 6% of its work force, 1,500 people, just ahead of its third-quarter-reporting deadline in September.

On August 22, shares in Lehman closed up 5% (16% for the week) on reports that the state-controlled Korea Development Bank was considering buying Lehman. Most of those gains were quickly eroded as news emerged that Korea Development Bank was "facing difficulties pleasing regulators and attracting partners for the deal." It culminated on September 9, when Lehman's shares plunged 45% to $7.79, after it was reported that the state-run South Korean firm had put talks on hold.

Investor confidence continued to erode as Lehman's stock lost roughly half its value and pushed the S&P 500 down 3.4% on September 9. The Dow Jones lost nearly 300 points the same day, on investors' concerns about the security of the bank. The U.S. government did not announce any plans to assist with any possible financial crisis that emerged at Lehman.

On September 10, Lehman announced a loss of $3.9 billion and their intent to sell off a majority stake in their investment-management business, which included Neuberger Berman. The stock slid 7% that day. On September 11, JPMorgan Chase, which cleared Lehman's trades, stopped the more than $100 billion Lehman borrowed daily via the interbank lending market. That day Paulson officially asked Diamond about purchasing Lehman.

On September 12, Timothy F. Geithner, then president of the Federal Reserve Bank of New York, called a meeting on the future of Lehman, which included the possibility of an emergency liquidation of its assets. Bankers representing all the major Wall Street firms were in attendance. The meeting goal was to find a private solution in rescuing Lehman and mitigate the 2008 financial crisis. Lehman reported that it had been in talks with Bank of America and Barclays for the company's possible sale; both firms made offers, but the Treasury refused Bank of America's terms, so it purchased Merrill Lynch.

Barclays's purchase of Lehman seemed assured, but The New York Times reported on September 14, 2008, that Barclays had ended its bid to purchase all or part of Lehman and a deal to rescue the bank from liquidation collapsed. It emerged subsequently that a deal had been vetoed by the Bank of England and the UK's Financial Services Authority (FSA). FSA refused to waive the rule that shareholders approve such an acquisition. Leaders of major Wall Street banks continued to meet late that day to prevent the bank's rapid failure. Bank of America's rumored involvement also appeared to end as federal regulators resisted its request for government involvement in Lehman's sale. By Sunday, September 14, after the Barclays deal fell through, the news of impending doom swept through Lehman, and many employees arrived at the headquarters to clean out their offices. By Sunday afternoon, the government summoned Harvey Miller of Weil, Gotshal & Manges to file for bankruptcy before the markets opened on Monday.

Bankruptcy filing

Barclays acquired the investment banking business of Lehman Brothers in September 2008.

Lehman Brothers filed for Chapter 11 bankruptcy protection on Monday, September 15, 2008. According to Bloomberg, reports filed with the U.S. Bankruptcy Court, Southern District of New York (Manhattan) on September 16 indicated that JPMorgan Chase provided Lehman with a total of $138 billion in "Federal Reserve-backed advances". The "Federal Reserve-backed advances" as provided by JPMorgan Chase were for $87 billion on September 15 and $51 billion on September 16.

The filing remains the largest bankruptcy filing in U.S. history, with Lehman holding over $600 billion in assets.

Breakup process

Lehman told Diamond that while Lehman Brothers Holdings, the parent company, would declare bankruptcy, Lehman Brothers North America was available for sale. Barclays began working on another deal. On Tuesday, September 16, Diamond announced to employees at Lehman headquarters at 745 Seventh Avenue that their company had been bought, playing "God Save the Queen" on the intercom.

On September 22, 2008, a revised proposal to sell the brokerage part of Lehman Brothers holdings of the deal was put before the bankruptcy court, with a $1.3666 billion (£700 million) plan for Barclays to acquire the core business of Lehman (mainly Lehman's $960 million Midtown Manhattan office skyscraper, 745 Seventh Avenue), was approved. Manhattan court bankruptcy judge James Peck, after a seven-hour hearing, ruled: "I have to approve this transaction because it is the only available transaction. Lehman Brothers became a victim, in effect the only true icon to fall in a tsunami that has befallen the credit markets. This is the most momentous bankruptcy hearing I've ever sat through. It can never be deemed precedent for future cases. It's hard for me to imagine a similar emergency."

Luc Despins, the creditors committee counsel, said: "The reason we're not objecting is really based on the lack of a viable alternative. We did not support the transaction because there had not been enough time to properly review it." In the amended agreement, Barclays would absorb $47.4 billion in securities and assume $45.5 billion in trading liabilities. Lehman's attorney Harvey R. Miller of Weil, Gotshal & Manges, said "the purchase price for the real estate components of the deal would be $1.29 billion, including $960 million for Lehman's New York headquarters and $330 million for two New Jersey data centers. Further, Barclays will not acquire Lehman's Eagle Energy unit, but will have entities known as Lehman Brothers Canada Inc, Lehman Brothers Sudamerica, Lehman Brothers Uruguay and its Private Investment Management business for high-net-worth individuals. Finally, Lehman will retain $20 billion of securities assets in Lehman Brothers Inc that are not being transferred to Barclays." Barclays had a potential liability of $2.5 billion to be paid as severance, if it chooses not to retain some Lehman employees beyond the guaranteed 90 days.

On September 22, 2008, Nomura Holdings announced it agreed to acquire Lehman Brothers' franchise in the Asia Pacific region including Japan, Hong Kong and Australia. The following day, Nomura announced its intentions to acquire Lehman Brothers' investment banking and equities businesses in Europe and the Middle East. A few weeks later it was announced that conditions to the deal had been met, and the deal became legally effective on Monday, October 13. In 2007, non-US subsidiaries of Lehman Brothers were responsible for over 50% of global revenue produced.

Following the asset sales to Barclays and Nomura, the remaining Lehman estate pursued extensive avoidance and preference actions against financial institutions, trading counterparties, and former business partners to maximize creditor recoveries. The estate engaged a range of firms to manage the recovery litigation, including Jones Day, Quinn Emanuel Urquhart & Sullivan LLP, Dechert LLP, Mark Roher Law, P.A., and Togut, Segal & Segal LLP, representing various creditor and counterparty interests across multiple jurisdictions.

Impact of bankruptcy filing

The Dow Jones closed down just over 500 points (−4.4%) on September 15, 2008, at the time the largest drop by points in a single day since the days following the attacks on September 11, 2001. This drop was exceeded by a 6.98% plunge on September 29, 2008.

Lehman's bankruptcy was expected to cause some depreciation in the price of commercial real estate. The prospect for Lehman's $4.3 billion in mortgage securities getting liquidated sparked a selloff in the commercial mortgage-backed securities (CMBS) market. Additional pressure to sell securities in commercial real estate was feared as Lehman got closer to liquidating its assets. Apartment-building investors were also expected to feel pressure to sell as Lehman unloaded its debt and equity pieces of the $22 billion purchase of Archstone, the third-largest United States real estate investment trust (REIT). Archstone's core business was the ownership and management of residential apartment buildings in major metropolitan areas of the United States. Jeffrey Spector, a real-estate analyst at UBS, said that in markets with apartment buildings that compete with Archstone, "there is no question that if you need to sell assets, you will try to get ahead" of the Lehman selloff, adding "Every day that goes by there will be more pressure on pricing."

Several money funds and institutional cash funds had significant exposure to Lehman with the institutional cash fund run by The Bank of New York Mellon and the Reserve Primary Fund, a money market fund, both falling below $1 per share, called "breaking the buck", following losses on their holdings of Lehman assets. In a statement The Bank of New York Mellon said its fund had isolated the Lehman assets in a separate structure. It said the assets accounted for 1.13% of its fund. The Primary Reserve Fund owned $785 million or 1.2 percent of its holdings in Lehman commercial paper. The drop in the Primary Reserve Fund was the first time since 1994 that a money-market fund had dropped below the $1-per-share level.

On Monday, September 15, 2008, the market staged a run on AIG with shares plummeting 61 percent. Shareholders also fled from Goldman Sachs and Morgan Stanley. Two weeks later, the Fed agreed to give the bank holding company status which provided vital access to the Fed discount window.

Putnam Investments, a unit of Canada's Great-West Lifeco, shut a $12.3 billion money-market fund as it faced "significant redemption pressure" on September 17, 2008. Evergreen Investments said its parent Wachovia Corporation would "support" three Evergreen money-market funds to prevent their shares from falling. This move to cover $494 million of Lehman assets in the funds also raised fears about Wachovia's ability to raise capital.

Close to 100 hedge funds used Lehman as their prime broker and relied largely on the firm for financing. In an attempt to meet their own credit needs, Lehman Brothers International routinely re-hypothecated the assets of their hedge funds clients that utilized their prime brokerage services. Lehman Brothers International held close to $40 billion of clients assets when it filed for Chapter 11 Bankruptcy. Of this, $22 billion had been re-hypothecated. As administrators took charge of the London business and the U.S. holding company filed for bankruptcy, positions held by those hedge funds at Lehman were frozen. As a result, the hedge funds were forced to de-lever and sit on large cash balances, inhibiting chances at further growth. This in turn created further market dislocation and overall systemic risk, resulting in a $737 billion decline in collateral outstanding in the securities lending market.

In Japan, banks and insurers announced a combined 249 billion yen ($2.4 billion) in potential losses tied to the Lehman shock. Mizuho Trust & Banking cut its profit forecast by more than half, citing 11.8 billion yen in losses on bonds and loans linked to Lehman. The Bank of Japan Governor Masaaki Shirakawa said, "Most lending to Lehman Brothers was made by major Japanese banks, and their possible losses seem to be within the levels that can be covered by their profits," adding, "There is no concern that the latest events will threaten the stability of Japan's financial system." During bankruptcy proceedings a lawyer from The Royal Bank of Scotland Group said the company was facing between $1.5 billion and $1.8 billion in claims against Lehman partially based on an unsecured guarantee from Lehman and connected to trading losses with Lehman subsidiaries, Martin Bienenstock.

Lehman was a counterparty to mortgage financier Freddie Mac in unsecured lending transactions that matured on September 15, 2008. Freddie said it had not received principal payments of $1.2 billion plus accrued interest. Freddie said it had further potential exposure to Lehman of about $400 million related to the servicing of single-family home loans, including repurchasing obligations. Freddie also said it "does not know whether and to what extent it will sustain a loss relating to the transactions" and warned that "actual losses could materially exceed current estimates." Freddie was still in the process of evaluating its exposure to Lehman and its affiliates under other business relationships.

After Constellation Energy was reported to have exposure to Lehman, its stock went down 56% in the first day of trading having started at $67.87. The massive drop in stocks led to the New York Stock Exchange halting trade of Constellation. The next day, as the stock plummeted as low as $13 per share, Constellation announced it was hiring Morgan Stanley and UBS to advise it on "strategic alternatives", suggesting a buyout. While rumors suggested French power company Électricité de France would buy the company or increase its stake, Constellation ultimately agreed to a buyout by MidAmerican Energy, part of Berkshire Hathaway (headed by billionaire Warren Buffett).

The Federal Agricultural Mortgage Corporation or Farmer Mac said it would have to write off $52.4 million in Lehman debt in the form of senior debt securities it owned as a result of the bankruptcy. Farmer Mac said it might not be in compliance with its minimum capital requirements at the end of September.

In Hong Kong, more than 43,700 individuals in the city had invested in HK$15.7 billion of "guaranteed mini-bonds" (迷你債券) from Lehman. Many claimed that banks and brokers mis-sold them as low-risk. However, bankers noted that the minibonds are indeed low-risk instruments since they were backed by Lehman Brothers, which until just months before its collapse was a venerable member of Wall Street with high credit and investment ratings, and many banks accepted minibonds as collateral for loans and credit facilities. Another HK$3 billion was invested in similar products, including derivatives. The Hong Kong government proposed a plan to buy back the investments at their current estimated value, which would allow investors to partially recover some of their loss by the end of the year. HK chief executive Donald Tsang insisted the local banks respond swiftly to the government buy-back proposal as the Monetary Authority received more than 16,000 complaints. On October 17, He Guangbe, chairman of the Hong Kong Association of Banks, agreed to buy back the bonds, which were priced using an agreed upon methodology based on its estimated current value.

Neuberger Berman

Neuberger Berman Inc., through its subsidiaries, primarily Neuberger Berman, LLC, is an investment-advisory firm founded in 1939 by Roy R. Neuberger and Robert Berman, to manage money for high-net-worth individuals. In the decades that followed, the firm's growth mirrored that of the asset-management industry as a whole. In 1950, it introduced one of the first no-load mutual funds in the United States, the Guardian Fund, and also began to manage the assets of pension plans and other institutions. Historically known for its value-investing style, in the 1990s the firm began to diversify its competencies to include additional value and growth investing, across the entire capitalization spectrum, as well as new investment categories, such as international, real-estate investment trusts and high-yield investments. In addition, with the creation of a nationally and several state-chartered trust companies, the firm became able to offer trust and fiduciary services. In 2016, the firm had approximately $246 billion in assets under management.

Neuberger Berman's New York City headquarters on Third Avenue

In October 1999, the firm conducted an initial public offering of its shares and commenced trading on the New York Stock Exchange, under the ticker symbol "NEU". In July 2003, shortly after the retired Mr. Neuberger's 100th birthday, the company announced that it was in merger discussions with Lehman Brothers Holdings Inc. These discussions ultimately resulted in the firm's acquisition by Lehman on October 31, 2003, for approximately $2.63 billion in cash and securities.[citation needed]

On November 20, 2006, Lehman announced its Neuberger Berman subsidiary would acquire H. A. Schupf & Co., a money-management firm targeted at wealthy individuals. Its $2.5 billion of assets would join Neuberger's $50 billion in high-net-worth client assets under management.

An article in The Wall Street Journal on September 15, 2008, announcing that Lehman Brothers Holdings filed for Chapter 11 bankruptcy protection, quoted Lehman officials regarding Neuberger Berman:

Neuberger Berman LLC and Lehman Brothers Asset Management will continue to conduct business as usual and will not be subject to the bankruptcy case of the parent company, and its portfolio management, research and operating functions remain intact. In addition, fully paid securities of customers of Neuberger Berman are segregated from the assets of Lehman Brothers and aren't subject to the claims of Lehman Brothers Holdings' creditors, Lehman said.

Just before the collapse of Lehman Brothers, executives at Neuberger Berman sent e-mail memos suggesting, among other things, that the Lehman Brothers' top people forgo multimillion-dollar bonuses to "send a strong message to both employees and investors that management is not shirking accountability for recent performance".

Lehman Brothers Investment Management Director George Herbert Walker IV dismissed the proposal, going so far as to actually apologize to other members of the Lehman Brothers executive committee for the idea of bonus reduction having been suggested. He wrote, "Sorry team. I am not sure what's in the water at Neuberger Berman. I'm embarrassed and I apologize."

Controversies

Executive pay during crisis

Richard Fuld, head of Lehman Brothers, faced questioning from the U.S. House of Representatives' Committee on Oversight and Government Reform. Rep. Henry Waxman (D-CA) asked: "Your company is now bankrupt, our economy is in crisis, but you get to keep $480 million (£276 million). I have a very basic question for you, is this fair?" Fuld said that he had in fact taken about $300 million (£173 million) in pay and bonuses over the past eight years. Despite Fuld's defense on his high pay, Lehman Brothers executive pay was reported to have increased significantly before filing for bankruptcy. On October 17, 2008, CNBC reported that several Lehman executives, including Richard Fuld, had been subpoenaed in a case relating to securities fraud.

Accounting manipulation

In March 2010, the report of Anton R. Valukas, the Bankruptcy Examiner, drew attention to the use of Repo 105 transactions to boost the bank's apparent financial position around the date of the year-end balance sheet. The New York attorney general Andrew Cuomo later filed charges against the bank's auditors Ernst & Young in December 2010, alleging that the firm "substantially assisted... a massive accounting fraud" by approving the accounting treatment.

On April 12, 2010, a story in The New York Times revealed that Lehman had used a small company, Hudson Castle, to move a number of transactions and assets off Lehman's books as a means of manipulating accounting numbers of Lehman's finances and risks. One Lehman executive described Hudson Castle as an "alter ego" of Lehman. According to the story, Lehman owned one quarter of Hudson; Hudson's board was controlled by Lehman, most Hudson staff members were former Lehman employees.

Section 363 sale

On February 22, 2011, Judge James M. Peck of the U.S. Bankruptcy Court in the Southern District of New York rejected claims by lawyers for the Lehman estate that Barclays had improperly reaped a windfall from the section 363 sale. "The sale process may have been imperfect, but it was still adequate under the exceptional circumstances of Lehman Week."

In popular culture

Margin Call – 2011 American film by J. C. Chandor

Too Big to Fail – 2011 American biographical TV film

The Big Short – 2015 film by Adam McKay

C – 2011 Japanese anime television series

References

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Stempel, Jonathan (September 28, 2022). "After 14 years, Lehman Brothers' brokerage ends liquidation". Reuters.

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Lehman Brothers Holdings Inc. (2007). Form 10-K. Washington D.C.: United States Securities and Exchange Commission

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Robin Blackburn. "Blackburn-The Subprime Crisis-New Left Review-March/April 2008". Newleftreview.org. Retrieved November 11, 2011.

Labaton, Stephen (October 2, 2008). "NYT-Agency 04 Rule Let Banks Pile Up More Debt-October, 2008". The New York Times. Retrieved November 11, 2011.

Kulikowski, Laura (August 22, 2007). "Lehman Brothers Amputates Mortgage Arm". TheStreet.com. Archived from the original on March 17, 2008. Retrieved March 18, 2008.

Jenny Anderson; Eric Dash (August 29, 2008). "Struggling Lehman Plans to Lay Off 1,500". The New York Times. Archived from the original on May 12, 2011. Retrieved August 29, 2008.

"Lehman raising $6 billion in capital, expects $2.8 billion loss". mercurynews.com. June 9, 2008.

New York Times, World Business, article by Jenny Anderson and Landon Thomas, August 22, 2008.

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Ben White (September 10, 2008). "Lehman Sees $3.9 Billion Loss and Plans to Shed Assets". The New York Times. Archived from the original on May 12, 2011. Retrieved September 10, 2008.

Joe Bel Bruno (September 10, 2008). "Lehman shares slip on plans to auction off unit, consider sale of company". The Seattle Times. Associated Press. Retrieved September 10, 2008.

Jenny Anderson; Andrew Ross Sorkin (September 11, 2008). "As Pressure Builds, Lehman Said to Be Looking for a Buyer". The New York Times. Archived from the original on May 12, 2011. Retrieved September 11, 2008.

Jenny Anderson; Eric Dash; Vikas Bajaj; Edmund Andrews (September 13, 2008). "U.S. Gives Banks Urgent Warning to Solve Crisis". The New York Times. Archived from the original on May 12, 2011. Retrieved September 13, 2008.

Ben White; Jenny Anderson (September 14, 2008). "Lehman Heads Toward Brink as Barclays Ends Talks". The New York Times. Archived from the original on May 5, 2011. Retrieved September 14, 2008.

Will Hutton, The Observer, April 19, 2009, You give bankers £1.3 trillion and do they thank you? Do they hell

Kary, Tiffany (September 16, 2008). "JPMorgan Gave Lehman $138 Billion After Bankruptcy (Update3) By Tiffany Kary and Chris Scinta". Bloomberg. Retrieved November 11, 2011.

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"Judge approves Lehman, Barclays pact". Reuters. September 21, 2008. Retrieved January 5, 2016.

Chasan, Emily (September 20, 2008). "reuters.com, Judge approves Lehman, Barclays pact". Reuters. Retrieved November 11, 2011.

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Steven Lessard, E.U. Re-Hypothecation And Lehman Brotherʼs Bankruptcy: Changes That Must Be Made To The MiFID, Appearing in Folsom, Gordon, Spangole, INTERNATIONAL BUSINESS TRANSACTIONS, PRACTITIONERS TREATISE, (2010 Treatise Supplement)

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Gasparino, Charlie (October 17, 2008). "Lehman Executives Including Fuld Subpoenaed". CNBC-TV. Englewood Cliffs, NJ. Archived from the original on October 15, 2012. Retrieved March 18, 2011.

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"Lehman Brothers $11bn case against Barclays fails". BBC. February 23, 2011. Retrieved September 13, 2017.

External links

Wikinews logo

Wikinews has related news:

Lehman Brothers files for bankruptcy

Channel 4 News: How Britain could have saved Lehman Brothers

"Why Lehman Brothers had to go bankrupt"—as told by a former employee

September 1, 1969--Berkshire UFO Incident

 

The Labor Day 1969 UFO incident is an alleged encounter with an unidentified flying object (or UFO) that occurred on the night of 1 September 1969, in Berkshire County, Massachusetts. The Thom Reed UFO Park was established to commemorate the purported event, and over 250 people were claimed to have witnessed the object. The incident has been deemed a "significantly historic and true event" by the Great Barrington Historical Society and Massachusetts historians, though other local historians and journalists have expressed doubts. Despite being depicted as the most-seen UFO in the history of Berkshire County, no tangible record of any report made at the time to police or media has ever been found.

Alleged encounters

The most famous encounter from this incident was alleged to have occurred in Sheffield near Old Covered Bridge. Thomas Reed and his family were crossing the bridge when they reportedly witnessed a disc-shaped object hovering in the air. Reed described the craft as a "white orb" that was "bigger than a football field". They tried escaping the UFO by continuing towards Covered Bridge Lane, but the craft followed them. Reed says the car was engulfed in light as they were pulled into the UFO. When Reed took a polygraph test, he was found to be 99.1% truthful.

Another alleged incident is said to have occurred at Lake Mansfield in Great Barrington. Melanie Kirchdorfer and her family had traveled to the lake. When her father backed into the parking lot, a very bright light engulfed their car. Everyone in the vehicle began to panic. Her father decided to chase the light, despite Melanie urging him not to. Reportedly, she and her sister began to shake in fear, and her sister did not remember anything after that. However, Melanie remembered levitating and then being aboard a ship. She subsequently remembered being laid out. Tom Warner remembered seeing Melanie to the right of him on the ship. He recalled observing that her expression was fearful; however, she did not remember seeing him. She recalled being in a room with several other children. Suddenly, the other children began to disappear, one by one. After that, she woke up at the lake by herself, and had to walk home. Meanwhile, Tom remembered at the same time being laid down on his back at the other end of his family's property.

Though the narratives were consistent with the alleged phenomenon of alien abductions, the witnesses involved in these incidents reportedly took offense to it being called an abduction, and have been reticent to use the word "abduction" to describe the encounters. This is different from other notable UFO sightings in the United States.

UFO Monument Park

To commemorate the incident, a park was founded in 2015 on the banks of the Housatonic River by the town of Sheffield where Thom Reed's encounter is claimed to have occurred. A 5,000-pound (2,300 kg) granite monument was placed in the park from 2015 until 2019, when it was replaced by a sign which reads:

"On behalf of the citizens of Commonwealth of Massachusetts, I am pleased to confer upon you this Governor's citation in recognition of the off-world incident on September 1, 1969, which engaged the Reed family, which has been established. Your dedicated service to this incident was factually upheld, founded, and deemed historically significant and true by means of Massachusetts historians. The records highlighting the historic event are now officially part of the Great Barrington, MA Historical Society's collection and your recent induction into Massachusetts history."

The plaque was signed in error by then-Governor Charlie Baker after a persistent Reed asked the governor's staff to put Baker's signature on it, a Baker spokesman said. The Town of Sheffield has been involved in a dispute with a private landowner near the park over the location and return of the granite monument for several years.

In popular culture

The Netflix reboot of Unsolved Mysteries dedicated an entire episode to the incident.

The YouTube channel Yes Theory made a documentary about the incident with interviews from people who reportedly witnessed the alleged craft. The documentary has over 6.5 million views as of 3 October 2023.

The BBC Radio 4 series Uncanny covered this incident in a show broadcast on 24 June 2024 and featured interviews with Thomas Reed and Melanie Kirchdorfer.

References

Reed, Thom. "Thom Reed - UFO Park". Retrieved 4 March 2023.

Rodriguez, Bianca (1 July 2020). "The 1969 Berkshire County UFO Sighting In Netflix's 'Unsolved Mysteries' Is Recognized by History". Marie Claire. Archived from the original on 5 March 2023. Retrieved 4 March 2023.

Durwin, Joe (2020-07-07). "Alien Abduction in the Berkshires? (Pt 1) The 1966 Reed Family Encounter". These Mysterious Hills. Retrieved 2023-08-28.

Watts, Marina (2020-07-02). "'Unsolved Mysteries': Berkshire UFO & 4 Stranger-Than-Fiction Sightings". Newsweek. Retrieved 2023-08-28.

https://www.masslive.com/news/2016/07/man_at_center_of_1969_berkshir.html

"Thom Reed UFO Monument Park". Atlas Obscura. 10 August 2017. Archived from the original on 5 March 2023. Retrieved 4 March 2023.

Cowgill, Terry (25 April 2018). "Close enounters in Sheffield – of the municipal kind". The Berkshire Edge. Archived from the original on 26 November 2022. Retrieved 26 November 2022.

"Sheffield keeps its word, removes disputed UFO monument" Berkshire Eagle June 7, 2019

"72 Hours With Strangers Who Have Seen Aliens". YouTube. 6 December 2020.

Annaliese Michel

 

Anna Elisabeth "Anneliese" Michel (21 September 1952 – 1 July 1976) was a German woman who underwent 65 Catholic exorcism rites during the year before her death. She died of malnutrition, for which her parents and the priest who performed the exorcism were convicted of negligent homicide. She was diagnosed with epileptic psychosis (temporal lobe epilepsy) and manic depression (bipolar disorder), and had a history of psychiatric treatment that proved ineffective.

When Michel was 16, she experienced a seizure and was diagnosed with psychosis caused by temporal lobe epilepsy. Shortly thereafter, she was diagnosed with depression and was treated by a psychiatric hospital. By the time that she was 20, she had become intolerant of various religious objects and began to hear voices. Her condition worsened despite medication, and she became suicidal, also displaying other symptoms, for which she took medication as well. After taking psychiatric medications for five years failed to improve her symptoms, Michel and her family became convinced she was possessed by a demon. As a result, her family appealed to the Catholic Church for an exorcism. While rejected at first, two priests got permission from the local bishop, Josef Stangl, to perform the exorcism in 1975. The priests began performing exorcisms and the family stopped consulting doctors. Michel stopped eating food and died of malnourishment and dehydration after 67 exorcism sessions. Michel's parents and the two Catholic priests were found guilty of negligent homicide and were sentenced to six years in jail (reduced to three years of probation), as well as a fine.

Several religious horror films are based on her story, including the 2005 film The Exorcism of Emily Rose, the 2006 film Requiem, and the 2011 film Anneliese: The Exorcist Tapes.

Early life

Born Anna Elisabeth Michel on 21 September 1952 in Leiblfing, Bavaria, West Germany, to a Roman Catholic family, Michel and her three sisters were raised by their parents, Joseph and Anna. She attended Mass twice a week. When she was 16, she experienced a severe convulsion and was diagnosed with temporal lobe epilepsy. In 1973, Michel attended the University of Würzburg. Her classmates later described her as "withdrawn and very religious".

Psychiatric treatment

In June 1970, Michel had a third seizure at the psychiatric hospital where she had been staying. She was prescribed anti-convulsion drugs for the first time, including Dilantin, which did not alleviate the problem. She described seeing "devil faces" at various times of the day. That same month, she was prescribed Aolept, which is similar to chlorpromazine and is used in the treatment of various psychotic conditions, including schizophrenia, disturbed behavior, and delusions. By 1973, she began experiencing depression, hallucinated while praying and complained about hearing voices telling her that she was "damned" and would "rot in hell." Michel's treatment in a psychiatric hospital did not improve her health and her depression worsened. Long-term treatment did not help, either, and she grew increasingly frustrated with her medical care after having taken pharmacological drugs for five years.[4] Michel became intolerant of Christian sacred places and objects, such as the crucifix.

Michel visited the unauthorized shrine of San Damiano in Piacenza, with a family friend who regularly organized Christian pilgrimages to Italy. Her escort in Piacenza was convinced that she was suffering from demonic possession because she was unable to walk past a crucifix and refused to drink the water of a Christian holy spring.

Anneliese told me—and Frau Hein confirmed this—that she was unable to enter the shrine. She approached it with the greatest hesitation, then said that the soil burned like fire and she simply could not stand it. She then walked around the shrine in a wide arc and tried to approach it from the back. She looked at the people who were kneeling in the area surrounding the little garden, and it seemed to her that while praying they were gnashing their teeth. She got as far as the edge of the little garden, then she had to turn back. Coming from the front again, she had to avert her glance from the picture of Christ [in the chapel of the house]. She made it several times to the garden, but could not get past it. She also noted that she could no longer look at medals or pictures of saints; they sparkled so immensely that she could not stand it.— Father Ernst Alt

Michel's mother said that she saw stigmata on her daughter. Michel believed she could communicate with Mary, mother of Jesus.

Michel's family and community became convinced that she was possessed and consulted several priests to request an exorcism. The priests declined, recommended the continuation of medical treatment and informed the family that exorcisms required the bishop's permission. In the Catholic Church, official approval for an exorcism is granted when the subject strictly meets the set criteria and is considered to be suffering from possession (infestatio) and under demonic control. Intense dislike for religious objects and supernatural powers are some of the first indications.

Michel worsened physically and displayed aggression, injured herself, drank her own urine and ate insects. In November 1973, Michel began treatment with Tegretol, an anti-seizure drug and mood stabilizer. She was prescribed antipsychotic drugs during the course of the religious rites and consumed them frequently until some time before her death. Despite taking these neuroleptic medications, Michel's symptoms worsened and she began "growling obscenities, screaming guttural curses, and raving wildly."

Exorcism

A family friend of the Michels requested the elderly Jesuit priest Adolf Rodewyk to visit Anneliese, but he declined due to his old age and put the family in contact with another Jesuit. In September 1974, the local priest who had visited her, Father Ernst Alt, declared that Michel "didn't look like an epileptic" and that he did not observe her experiencing seizures. However, between July and August 1975, Alt came to believe that she was suffering from demonic possession and urged Josef Stangl, the Bishop of Würzburg, to allow an exorcism. In a letter to Alt in 1975, Michel wrote, "I am nothing; everything about me is vanity. What should I do? I have to improve. You pray for me" and also once told him, "I want to suffer for other people but this is so cruel." In August 1975, Stangl granted Father Alt the permission of performing the "small exorcism" upon Michel, i.e. Pope Leo XIII's Exorcism against Satan and the Apostate Angels, a rite which any priest could recite as it doesn't require episcopal approval.

In September 1975, Father Rodewyk visited Anneliese with Alt and wrote a detailed report of her case to the Bishop Josef Stangl "unintelligible to third parties", arguing in favor of a genuine demonic possession and urging Stangl to allow them to perform the major rite of exorcism. Eventually, Stangl granted Salvatorian priest Arnold Renz permission to conduct an exorcism according to the Roman Ritual (Latin: Rituale Romanum), but ordered total secrecy. Renz performed the first session on 24 September. Michel began increasingly speaking about "dying to atone for the wayward youth of the day and the apostate priests of the modern church." Her parents stopped consulting doctors at her request and relied solely on the exorcism rites. A total of 67 exorcism sessions, one or two each week lasting up to four hours each, were performed over approximately ten months in 1975 and 1976. Toward the end of her life, Michel began to refuse food.

On 1 July 1976, Michel died in her home. The autopsy report stated the cause of death as malnutrition and dehydration resulting from almost a year in a state of near starvation while the rites of exorcism were performed. She weighed 30 kilograms (66 lb), suffered broken knees from continuous genuflections, was unable to move without assistance and was reported to have contracted pneumonia.

Prosecution

After an investigation, the state prosecutor maintained that Michel's death could have been prevented as late as one week before she died.

In 1976, the state charged Michel's parents and priests Ernst Alt and Arnold Renz with negligent homicide. The parents were defended by famed Nuremberg trials defense attorney Erich Schmidt-Leichner and the priests' defense counsel were paid by the church. The state recommended that none of the involved parties be jailed; instead, the recommended sentence for the priests was a fine, while the prosecution concluded that the parents should be exempt from punishment as they had "suffered enough," a mitigating legal factor in German penal law (cf. § 60 StGB).

On July 14, 1977, a New York Times article reported the Aschaffenburg prosecutor had announced that two Roman Catholic priests had been charged with negligent homicide in the death of Anneliese Michel, who had undergone exorcism a year previously.

Trial

The trial began on 30 March 1978 in the district court and drew intense interest. Doctors testified that Michel was not possessed, stating that the manifestations of demonic possession were a psychological effect of her strict religious upbringing as well as her epilepsy. Schmidt-Leichner argued that the exorcism was legal and that the German constitution protected citizens in the unrestricted exercise of their religious beliefs. The defense played tapes recorded at the exorcism sessions, sometimes featuring what was claimed to be "demons arguing" to assert their claim that Michel was possessed. Both priests claimed that six demons identified themselves as Lucifer, Cain, Judas Iscariot, Nero, Adolf Hitler, and an evil priest named Fleischmann. They also stated that Michel was finally freed of demonic possession resulting from the exorcism just before her death.

Bishop Stangl said that he was not aware of Michel's alarming health condition when he approved of the exorcism and did not testify in court. In April 1978, the Michels and the two priests were convicted of negligent homicide but were given suspended prison sentences, and were ordered to share the costs of the legal proceedings. The sentences have been described as stiffer than those requested by the prosecutor, who had asked that the priests only be fined and that the parents be found guilty but not punished. By approving the ancient exorcism rite, the Catholic Church drew public and media attention.

Exhumation and aftermath

After the trial, the Michels asked the authorities for permission to exhume the remains of their daughter because she had been buried in undue hurry in a cheap coffin. Almost two years after the burial, on 25 February 1978, her remains were replaced in a new oak coffin lined with tin. The official reports state that the body bore signs consistent with deterioration of a corpse of that age. The family and the priests were discouraged from viewing Michel's remains. Father Renz later stated that he had been prevented from entering the mortuary. Michel's gravesite remains a pilgrimage site as she is "revered by small groups of Catholics who believe she atoned for wayward priests and sinful youth."

The number of officially sanctioned exorcisms decreased in Germany following the incident.

Michel's father, Joseph Michel, died in 1999. In a 2006 interview, Anna Michel stated that she did not regret her actions, saying, "I know we did the right thing because I saw the sign of Christ in her hands". On 6 June 2013, a fire engulfed the house where Michel had lived. Although some locals attributed the fire to the exorcism case, the arsonist turned out to be a member of the local fire brigade .

Notes

"In Nov '73, exorcism expert Jesuit priest Adolf Rodewyk examined Michel and recommended exorcism, which Stangl authorized in Sept '75."

References

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Goodman, Felicitas D. (1988). How about Demons?: Possession and Exorcism in the Modern World. Bloomington, Indiana: Indiana University Press. p. 15. ISBN 9780253014627. When treatment by the family physician and various psychiatrists brought her no relief, the bishop of her diocese gave permission to two priests to carry out the ritual of exorcism.

Ebert, Roger (2013). Roger Ebert's Movie Yearbook 2007. Kansas City, Missouri: Andrews McMeel Publishing. p. 907. ISBN 9780740792199. It involved a German girl named Anneliese Michel, who was treated for seizures and given drugs over a period of five years before the Church finally authorized an exorcism; its investigation indicated she was possessed by, among others, Lucifer, Judas, Nero, Cain, and Hitler.

Forcen, Fernando Espi (14 October 2016). Monsters, Demons and Psychopaths: Psychiatry and Horror Film. Taylor & Francis. p. 132. ISBN 9781315353920. After a few months, she stopped eating and died from malnourishment and dehydration.

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Dégh, Linda (2001). Legend and Belief: Dialectics of a Folklore Genre. Indiana University Press. p. 20. ISBN 9780253339294. Michel's deeply devout, conservative Catholic community was convinced that she was possessed by the devil after they had seen her hostile reaction to holy communion during pilgrimage to patron saint San Damiano in Italy.

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Getler, Michael (21 April 1978). "Cries of a Woman Possessed". The Washington Post. Archived from the original on 28 August 2017. Retrieved 24 December 2016. Nobody is expected to go to jail. The prosecutor yesterday asked that the priests be fined and that the parents be found guilty but not punished because they have already suffered enough.

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Further reading

Goodman, Felicitas D. (2005) [1981]. The Exorcism of Anneliese Michel. Eugene, Oregon: Resource Publications. ISBN 978-1-59752-432-2.

Getler, Michael (21 April 1978). "Cries of a Woman Possessed: German Court Hears Tapes in Exorcism Death Trial". The Washington Post. Washington, D.C.: William Lewis. ISSN 0190-8286. OCLC 2269358. Retrieved 9 May 2025.

External links

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Wikimedia Commons has media related to Anneliese Michel.

Casefile True Crime Podcast – Case 11: Anneliese Michel - 19 March 2016

Dunning, Brian (8 March 2011). "Skeptoid #248: The Exorcism of Anneliese". Skeptoid. Retrieved 22 June 2017.