Even when government pressure forced Sterling Foster to close in 1997, Bernstein still felt immune. "My impression, looking back, is that Randy Pace tried to keep me at arm's length from anything that was actually unlawful," he said, almost wistfully.
But closing one eye to Pace's unsavory past clearly affected Bernstein's depth perception. He invested in several fraudulent deals and lied about those deals to regulators. He had crossed the line.
One afternoon in September 1997, he learned that several of Pace's friends were striking deals with prosecutors and talking -- about him. Shocked and frightened, he hired a lawyer, Scott A. Edelman of Milbank, Tweed, Hadley & McCloy.
Looking back now, his days in the Pace empire seem to him to have occurred a lifetime ago -- one specific lifetime ago: that of his daughter, Raine. She was born on Dec. 17, 1997, shortly after her father came under investigation, and died on June 3, 2001, of what is believed to have been an asthma-related seizure.
"When all this happened with Hartley, we thought it was the end of the world," mused his wife, herself a lawyer, the family breadwinner and a loyal defender of her husband's essential decency.
"But I remember thinking that day: I thought I had problems -- I didn't know what a real problem was."
They are both active in bereavement support groups and still hope for a family. Bernstein, meanwhile, says he is exploring ways to turn StockPatrol into a profitable, but still lawful, venture -- perhaps by expanding it into a radio program or a book.
His admirers among the enemies of penny-stock fraud say they are confident that Bernstein's redemption is genuine and that he will resist future temptations. But even they cannot explain why he can see so clearly now what he could not see for so long: the dots that add up to fraud.
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