MIAMI -- Once upon a time -- six years ago to be exact -- a Gatsbyesque banker named David L. Paul blew into town and spent millions on yachts and limos, on jets and jet setting.

He hung a $13.2 million Rubens in his living room and racked up $1,700-a-night hotel tabs at New York's Stanhope. He flew six chefs first-class from France for a "Great Chefs" party that could have fed the city's homeless for months. The cost for the party: $122,726.20.

Moreover, Paul's nouveau glitz was embraced by Miami's pooh-bahs. As Paul and his CenTrust -- then the largest savings and loan in the Southeast -- bankrolled symphonies, operas and ballets, hospitals and universities, he was invited to sit on the best boards and join the most exclusive clubs.

In Washington, where deep pockets are often the province of Republicans, the Democratic Party rejoiced at Paul's largess. He gave money to Joe Biden's and Richard Gephardt's presidential quests. Paul and his CenTrust PAC contributed to and raised thousands for the Democratic Senatorial Campaign Committee. He was rewarded with a reception at the 1988 Democratic National Convention and a fancy title, Chairman of the Democratic Trust. In an effort to broaden his base, Paul also gave to Republicans.

Paul, 50, was heralded as a civic light nearly as bright as his CenTrust Tower, the $90 million skyscraper in the shape of a half circle, designed by I.M. Pei. Every night it blazed, as Paul ordered the lights illuminating the facade to take different colors -- Dolphins team aqua and orange one night, blue with white stars for Christmas another. Prominent in the sweeping opening shot on "Miami Vice," CenTrust became everyone's landmark beacon.

Now, David Paul has stunningly thudded to earth from his exquisite office on the 44th floor. Last month, the feds invaded the tower, hustling top executives out the door, seizing records. CenTrust -- which relied heavily on high-risk junk bonds and speculation with government securities -- was in an "unsafe and unsound condition," federal bank officials charged. The S&L was drained by "excessive and inappropriate expenses and investments."

It was Florida's biggest bank failure in history.

According to state regulators, Paul used his company's money to pay for many of his toys -- including the grandiose Great Chefs party, the Rubens, the hotel bills, even his home garbage collection bills. Paul, they say, treated CenTrust "as if it were his own personal piggy bank" -- draining the corporation to finance his lavish lifestyle. It also turns out that Paul lied about some of his credentials, including inventing a Harvard degree for himself.

In his high-spending days, David Paul gave money to the campaigns of various members of congressional banking committees. Now, on March 26, he will be called to testify before the House Banking Committee, which will hold hearings on CenTrust and its operations, according to a committee spokesman. Paul says he is innocent and misunderstood, persecuted by regulators, pilloried in the press, a victim of "unverified allegations."

Money Mirage

Some see Paul's story as the quintessential Miami money mirage. But his rise and fall is spectacular, even for this city where money talks, and breeding is strictly a horse term.

"All it takes is money, my dear," says one longtime society matron, "character has nothing to do with it." She has never seen anyone come on so fast and flamboyantly. "His ego was enormous. He pushed until he became the biggest shot on the block."

One of the drug money laundering capitals of the world, Miami is a city where Ferraris and Maseratis and condos and mansions are snapped up by mysterious newcomers, and paid for with cash, no questions asked. It is not uncommon here to buy estates from families of deposed dictators or drug lords who lose everything.

"This is a frontier town; Miami had a population of 10 in 1896 and 2 million less than 100 years later," says Dan Paul, a prominent Miami lawyer who is no relation to David Paul. "Throw a little money around, you have 'arrived.' This could not have happened in Atlanta, say."

On another level, this saga is larger than Miami -- the stuff of modern-day high rollers engulfed in a whirlwind of greed, from Wall Street to Beverly Hills. Speculation wizards one day, flameouts the next. Former millionaires mired in junk bonds -- investment quicksand of the roaring '80s.

And some of that story belongs, singularly, to David Paul, an enigmatic entrepreneur who inspires loathing and loyalty, evinces adjectives from charming to cruel. He is stocky, filled with nervous energy. There is a resemblance to the pugnacious Vince Lombardi and a persuasive force in his deep voice. Some of his life reads like "Wall Street's" Gordon Gekko or an acquisitor in "The Bonfire of the Vanities."

Accounts of his volcanic tantrums, dressing down and firing of everyone from secretaries to executives, are legendary -- as are tales of his mercurial shift to engaging conversationalist.

"He could charm the pants off a nun when he wanted to," says John McMillian, wealthy oil man and former boat company owner -- one of many who has fought Paul in court. McMillian's ongoing lawsuit contends that Paul still owes him $469,000 in building costs for his $7 million yacht, the Grand Cru.

Gone With the Wind

Between Jan. 1, 1988, and Sept. 30, 1989, Paul collected $4.8 million in salary, benefits and stock dividends from CenTrust, according to regulators and company records. Yet much of that time CenTrust was hemorrhaging, losing at least $119 million in fiscal 1989. Regulators say losses for that year may be twice that much.

Now Paul says he's close to broke and life is a "nightmare."

Friends say he got a raw deal, but others who remember his reign at CenTrust say it couldn't have happened to a nicer guy. Steamed stockholders are suing. Board directors, some of whom collected huge stock dividends and, Paul has said, approved many of his controversial expenditures, are running for cover. Employees found out that money set aside for their retirement may be gone; the pension plan was heavily invested in now virtually worthless CenTrust stock.

No criminal charges have been brought, but the Office of Thrift Supervision, the FBI, IRS and the U.S. Attorney's office are sifting through boxes of material on Paul and CenTrust to investigate for possible fraud and tax evasion. A grand jury probe appears to be imminent, according to investigative sources. Paul denies all wrongdoing.

In addition, the SEC is probing links between CenTrust and the "daisy chain" operation that allegedly involved junk bond czar Michael R. Milken and Charles H. Keating Jr. of the collapsed Lincoln Savings and Loan of Irvine, Calif., according to published reports.

Paul bought hundreds of millions of dollars of Milken's junk bonds and participated in several securities trades with Milken and Keating. Paul dealt often with Milken but has stated he had only two transactions with Keating, brokered by the now collapsed Drexel Burnham Lambert. However, he made at least three dubious transactions with Keating that are being investigated by regulators.

'Arriving'

Today, there are no more grand parties on the Grand Cru. Paul's 95.8-foot-yacht sits in abandoned splendor. It is berthed in front of burnished teakwood docks. Regulators claim that Paul had a CenTrust maintenance crew shellac the docks monthly.

The Grand Cru -- named for the top-quality wine grape -- is for sale at $7 million. Throw in an additional $9 million and change and you can also buy Paul's estate on exclusive LaGorce Island, where U.S. senators and judges once dined on champagne and caviar, strolled near a cascading waterfall and lagoon style pool, lulled by silken sunsets over Biscayne Bay.

Paul the newcomer assiduously wooed Miami's socially correct. "He had the uncanny instinct to buy his way in with the wealthiest man, Ted Arison {Carnival Cruise Lines billionaire}, and the most powerful, Alvah Chapman," chairman of the executive committee of Knight-Ridder, says Seth Gordon, a former Citicorp executive and civic leader. "Shielded under their wings, he was very safe."

Cultivating the prominent, Paul invited veritable strangers to dinner, where they met a "renaissance man," well read and, some say, brilliant -- albeit a renaissance man who was not all his re'sume' said he was and who humiliated subordinates.

One of those dinner guests was Chapman, who sponsored Paul for the city's most exclusive club, preciously called the Non-Group -- even after Paul's lying past had been exposed in print. "He did a lot of good things for the community. Whether we should have foreseen anything is another matter," says Chapman. "My dealings with him were civic, not business."

However, Dan Paul, the unrelated lawyer, says for the record what many others will only say privately. "The facts as they unfold tell us more about our civic leadership and the Miami Herald {Knight-Ridder is the paper's parent company} than they do about David Paul. Here is a man who came in here, his past was not checked carefully, or his present operation, and he is embraced by the so-called top civic leaders like Alvah Chapman." (Dan Paul, who represents the New York Times, Wall Street Journal and NBC, also represented the Herald some years ago.)

Once David Paul had "arrived," civic leaders, as well as international businessmen such as Calvin Klein Industries Chairman Barry Schwartz, eagerly joined CenTrust's board of directors. One director now ruefully explains his attraction to Paul's then $8 billion portfolio: "I was impressed by the zeros."

Grand Goodies

Just one of the many personal items billed to CenTrust and questioned by regulators was the 1988 Great Chefs party, attended by senators and federal judges, cited in Tiffany's party book as one of the parties of the year. (Regulators said Paul reimbursed the company only after they insisted; he says he repaid it before he was asked.)

But the final nails in the coffin that made Paul the Master of Wretched Excess were 14-karat gold. An unidentified former CenTrust employee told state regulators that she was instructed to pay through CenTrust accounts for 14-karat gold nails for his yacht.

Paul explodes on the subject of the nails in a brief phone conversation before saying that his lawyers will not let him talk. "That's false," he says. "I've never seen a gold nail in my life." Whatever happened, the image of those nails has become a metaphor for immoderation that did include matching gold-leaf ceilings -- one glistening in his inner sanctum at CenTrust, the other on his yacht.

By far the most publicized CenTrust-paid purchase now under investigation is the $29 million collection of old masters paintings, including the $13.2 million Rubens. Some New York art experts told the Wall Street Journal that Paul had been taken on the collection. Such criticism gnawed. Paul once beckoned a dumbfounded carpenter in to survey one of the paintings and demanded, "Do you think I overpaid?" One former employee remembers Paul's wife wearing an overcoat one morning because Paul kept the mansion frigidly air-conditioned to protect the collection.

Paul has always contended that art was a good bank investment, and that he was going to hang the collection in CenTrust's executive suites when ongoing construction was completed. But he was forced to sell the collection at regulators' orders for a $4.3 million loss.

Details

According to numerous sources, Paul ran CenTrust "like his private little kingdom." His stationery was from Tiffany's, his coffee was served on silver trays by white-jacketed waiters. His linens were Porthault.

For some this is impressive. Others find Paul's fetish for the finer things, his obsession with detail, more than a little disturbing. He personally checked the marble squares in CenTrust, with workers sticking hundreds of red dots on those he found flawed. There were shouting scenes over slight scars on his desk or tiny imperfections on his yacht's gold leaf ceiling.

"He was so obnoxious and created so much hell over the tiniest imperfection that it had to be done over again," remembers McMillian. The boat builder's lawyer, Ted Lapidus, recalls "my favorite story while collecting testimony from workmen on the boat. Paul arrived one night, with a whole entourage, lawyers, secretaries and all, for an on-site inspection at the yard, 100 miles above Milwaukee. There were 24 electrical switches and each came with a 5-cent screwdriver for installing. Paul counted and demanded to see the screwdrivers. There were only four or five left. He threw a tantrum, screaming as his people got him off the boat that he was being robbed blind. So the boatmen went out and bought 20 screwdrivers and presented him with them the next day."

Such actions seemed, to many, the insecurity of a troubled man fixated on status and symbols -- even to the point of making them up.

Re'sume's

"There's a history and a pattern, in my opinion, of this man being a fraud, a crook, a liar, a cheat, a man of multilitigation," said McMillian of Paul in a 1987 deposition during litigation between them. At that time, McMillian was chairman of Burger Boat Co.

Today, McMillian adds, "Paul is like a compulsive gambler. He's going to make Leona Helmsley look like the Virgin Queen of New York when the IRS gets through with him.

"You know how we found out about his college degrees? He had a Coast Guard license mounted on the boat. I said to myself 'I know that's not real.' We checked, and sure enough it was a forgery. I felt if he'd forge a federal document for his own ego he'd do anything. So we checked his credentials."

Paul's bogus Harvard degree and other falsehoods were first publicly exposed in 1988 when the Miami Review, a small paper noted for its thorough business coverage, examined Paul in a prize-winning series. The articles were enough to keep him off the blue-blood board of the University of Miami, a post Paul coveted, but did not ruin him with the Non-Group. Today Alvah Chapman says of the revelations, "Sure it raised some concern, but David said he made a mistake. It's a mystery to me what he was trying to prove that was so important."

Paul's false credentials, including a PhD from Harvard and an MBA from Columbia University business school, had been repeated in Who's Who in America, the New York Times, the Herald, other publications and official CenTrust literature. CenTrust bio information added that he was a Phi Beta Kappa at the Wharton School of the University of Pennsylvania. What makes it all the more surprising is that his real credentials were enough that he didn't need puffery. He wasn't Phi Beta Kappa but did receive a Bachelor of Science degree from Wharton in 1961. He didn't get an MBA from Columbia, but did graduate from its law school.

In some articles, Paul was identified as an Exeter graduate; Exeter has no record of him. In sworn depositions, Paul lied about his Harvard degree and also stated that he was a member of the bar of Massachusetts. (The law graduate was never a member of the bar anywhere.) He claimed to be the developer of the Citicorp and American Express buildings in New York City. Neither is true. When quizzed by the Miami Review, Paul said "I regret the lack of judgment" in issuing "erroneous" material.

As for the Coast Guard license, a Coast Guard investigation concluded that the license had been forged from the valid operators' license of Joseph Leon Hinzey, a boat captain and longtime Paul employee, but cleared Paul, saying he had no motive for taking such action. Paul claimed the license was a "joke gift" presented by Burger employees.

"He never needed a license," says Lapidus. "It's absolutely wacko. Paul has a wonderful fantasy life."

Roots

Paul's father, Isadore, founded Kent cleaners, a chain of dry cleaning stores, and died when Paul was an adolescent. His mother, now ailing, lives in Miami.

Another peculiar twist of Paul's background was a Miami Herald article that described him as "the son of a Jewish father and Catholic mother" -- although Who's Who in America lists his mother's maiden name as Ruth Goldstein.

Although declining to be interviewed for this article, Paul did say over the phone, "I had a nurse, a fabulous woman, a Catholic, and she raised me. I said the woman was 'like a mother' and that got twisted into being 'my mother was Catholic.' " (The reporter says he wrote what he remembers Paul telling him.)

Sister Jean O'Laughlin, the president of Barry University, who met Paul four years ago, says, "I'm not going to say he was abandoned by his mother, but she went to New York and did hire a nurse for David, who stayed here. She was Catholic. He was sent to Catholic schools in Miami Beach and when he was a young boy, he did call her 'Mother.' Apparently he called her 'Mother' for some time. In some ways it is stretching the truth when he talks with Catholic friends, saying he had a Catholic mother, but since he was raised so much by her, who knows how much rationalization is there?"

Some of Paul's acquaintances describe his real mother as demanding and super critical, which, they feel, is the key to much of his personality. Many friends felt that Paul was always trying to prove himself.

In Paul's abandoned office, a bouquet of flowers remained, sent by Sister Jean, with love. Paul, or CenTrust, gave $100,000 to Barry University -- "He gave University of Miami a half million," Sister Jean points out. "I was grateful for the help he gave us."

Sister Jean met Paul and his wife, Sandy, when Sandy was pregnant for the first time at the age of 39. "She had ileitis and was in pretty bad shape. She needed someone to talk to and I gave her as much support as I could. I was impressed at that time with David's devotion to public health." Paul was head of the governing body of Jackson Memorial Hospital, the largest public hospital in the Southeast.

A previous marriage ended years ago in bitter divorce, with Paul getting custody of his two sons.

Paul's climb to corporate success, while not exactly as his official bio describes, was impressive nonetheless, as he planned shrewd move after move.

By 1974, the New York Times real estate section profiled Paul as a "35-year-old builder whose efforts have left a strong impact" on staid Ridgefield, Conn., by building two controversial, modern apartment developments. (The article listed his fake Harvard PhD in urban planning.)

From there, Paul gained control of the Westport Co., a Massachusetts real estate investment trust (REIT), and then began the Chicago project 666, refurbishing the old furniture mart into apartments. The venture went belly up, but fortunately for Paul the bankruptcy didn't happen until a year after he used the interest to achieve his biggest coup. He used his interest in that project to help acquire Dade Savings and Loan and renamed it CenTrust.

The Deal Maker

Critics point out that taxpayers are now picking up the tab for Paul's profligate ways.

Friends, however, fiercely defend Paul, saying that not so long ago he was considered a genius deal-maker. A few years ago, Forbes magazine ranked CenTrust the second-most profitable company in the country (following Reebok International) as measured by its five-year return on equity. Paul took over the virtually insolvent Dade Savings in 1983, and in five years built it into the largest thrift institution in the southeastern United States, with $8.2 billion in assets.

Richard Goodwin, the writer and former aide to presidents John Kennedy and Lyndon Johnson, has been an outside director for CenTrust since August 1989. "David had an acute social conscience," said Goodwin, who admired his politics.

"I think he's a victim of a new regulatory climate. An honorable and honest man." Goodwin argues that Paul's extravagance is the "commonplace of normal corporate life, except for a few puritanical guys." Paul once colored CenTrust purple for Goodwin in honor of Goodwin's friend Whoopi Goldberg and her movie "The Color Purple."

"David got a very raw deal," explodes Democratic pollster Pat Caddell, who met Paul through politics. "He took a totally bankrupt outfit and did really creative things, a lot of Eurodollars and such, and turned it around. The regulators hated his unconventional approach. This man never stopped working. All his dinners at home were business. If it was a write-off, it was legitimate."

Had his junk bond investments and other high-risk ventures not collapsed, some contend that Paul could still be operating CenTrust.

And others feel he was a casualty of "rules changed in midstream." At the time Paul took over Dade, regulators permitted buyers of busted S&Ls to call their negative net worth "good will" and consider it a depreciating asset over a 30-year period. With last year's new S&L law, this was no longer permitted and the balance had to be subtracted from net worth -- nearly $400 million for Paul. This unexpected charge was a factor in CenTrust's insolvency and made it a candidate for a federal takeover.

No matter such excuses, says state comptroller spokesman Terry McElroy, "S&Ls are quasi-public, not private companies. When people invest their money in such institutions, they expect them to be prudent."

Rages

At CenTrust, Paul was legendary for berating everyone from chauffeurs to CEOs, and had a revolving door of personnel.

Executives recall the squirming embarrassment they felt at meetings when Paul castigated an executive like Roland Baker, who ran an insurance company subsidiary of CenTrust and left after a short time because he couldn't tolerate Paul. "He hired the cream of the crop," says Baker, "however, he wanted them to be chattel."

Berna Cosner, a top legal secretary, lasted three days as one of Paul's several secretaries. "I've worked for a lot of tough people, but he was the biggest egomaniac I've ever seen."

"Mostly I remember the screaming -- on the phone, down the hall, in his office," says Cosner. "I've seen bosses throw phones, but what was different with Paul was real verbal and emotional abuse. He once asked a secretary to carry out a huge stack of books. She looked at this heavy pile and said, 'You've got to be kidding.' He said, 'No I'm not.' " Cosner describes the secretary lugging the books out, with Paul striding in front, saying, "If you ever speak to me like that again, I'll fire you on the spot."

Her first day lasted until 10 p.m. Cosner got a call from the waiting chauffeur who had kept the car running for two hours and was worried about it ruining the engine. She told him to shut it off. The chauffeur said he couldn't because Paul would go into a tirade if the air-conditioning wasn't cold enough when he stepped in. Cosner alerted the chauffeur by phone as Paul was leaving the floor, so he could turn it back on. "We had to wait at our desks while Paul flew to New York on the company jet and until he was inside the ballet or seated at dinner before we were given the okay to go home," says Cosner.

"He enjoyed humiliating people," says yet another former executive, who quit in short order after witnessing Paul "blast his wife from head to toe" during a business meeting at his estate. "He yelled at her and called her names in front of the servants and us and she just took it. In the board room he'd yell, 'How can you be so stupid?' 'How could anyone be so dumb?' He had to have macho control. He hurt a lot of little people. He's a very troubled man." Another business acquaintance said he and his wife stopped dining with the Pauls because he verbally attacked his wife all evening.

"He was his own worst enemy," says one board director, who used to beg Paul to let someone else meet with the regulators because he was "so antagonistic."

Over the years Paul jousted from coast to coast in court. He did battle with the big (he lost the largest foreclosure suit in Chicago's history to Chemical Bank, the lead lender whom Paul accused of trying to "sabotage" the 666 project), and the little (LaGorce Island neighbors who sued over the four docks, massive pilings and floodlights he put on the property).

"He could start a fight in a room by himself," says McMillian.

Paul often used charges of veiled antisemitism. He says angry neighbors on LaGorce "remember when the island was restricted" -- although one of the neighbors bringing a lawsuit is the son of a rabbi. Bank regulators' tactics against CenTrust were "reminiscent of Germany in the '30s" -- although the state comptroller, Gerald Lewis, whom Paul views as his chief persecutor, happens to be Jewish. "He accused me in a deposition of saying something antisemitic about his wife, who I don't even know," says McMillian.

The Future

The government is now trying to keep CenTrust afloat, just one of the hundreds of S&L bailouts across the nation.

Paul's future is uncertain. Still pending is the option of regulators to permanently ban Paul from operating any Florida banking institutions.

Friends describe Paul as preoccupied and worried. They say he talks about moving to an apartment. He seems most bitter about what he describes as the trashing of his philanthropic activities. Recipients say they are grateful, no matter where the money came from. But for Paul, the prestigious goal, the title of major civic philanthropist, has eluded him. It is doubtful that any bridges or buildings will be named after David L. Paul.

Some are banking on a rebirth of the feisty Paul, but others are already relegating him to a nether world beyond limelight, beyond social pages.

In scandal's aftermath, fame is as fleeting as a full moon over Miami. In but a few short weeks the social set has begun to say the words a man like Paul must most dread.

"Whatever," they murmur, picking up a canape and moving on, "has happened to David Paul?"

The Perks of David Paul

In David Paul's once lush life, here are some of the other personal items bank regulators claim the banker charged to his company:

Nearly half a million -- $456,591 -- in home security services.

$257,784 per year for $6 million in life insurance -- with Paul's wife as the beneficiary.

$33,082 for his car phone and residential phone service. $26,000 annually to lease a Mercedes-Benz limo for his own use, plus $40,940 for a 1988 Lincoln limo in New York and Connecticut and $38,515 in additional limo expenses from February 1987 to August 1989.

A $15,193 Tiffany tableware service for eight shipped to Paul's house. His wife later returned six place settings but kept two. As of Nov. 22, 1989, CenTrust had not been reimbursed $3,832 for those two place settings.

Other CenTrust assets still carried on the corporation's books but believed to be at his house, according to regulators, total more than $150,000 and range from a $419.69 deep fryer to more than $10,000 in mobile or car phones.

Unidentified former CenTrust employees have sworn in affidavits that personal bills paid through CenTrust's accounts included residential garbage bills, monthly lawn maintenance invoices, expenses incurred by Paul's wife while shopping in Paris, marble originally ordered for the CenTrust Tower but delivered to his home.

CenTrust expenses and disbursements also raised regulators' eyebrows. Among them were nearly $85,000 worth of Baccarat crystal and $22,427 in Porthault linens for CenTrust's exclusive dining club that routinely operated at a loss, plus four Persian rugs for $208,000. According to the enforcement action filed by the comptroller's office, seeking removal of David Paul from CenTrust, "Paul has the stated that invoices for the purchase of two of the most expensive rugs were intentionally misstated to reflect delivery to CenTrust in Connecticut in order to avoid payment of Florida sales tax."

Regulators are questioning the business nature of many of the flights on a corporate jet leased by CenTrust for $1.4 million annually. This does not include insurance, fuel, catering, landing fees, pilots' benefits. Also questioned is the $47,020 CenTrust paid in 1988 for Paul to spend 35 nights at New York's Stanhope Hotel -- owned by a subsidiary of CenTrust. A three-night stay one month averaged $1,766 per night.

And there is the $6 million lent Paul to finance his two-home estate on LaGorce Island; regulators challenge the procedure in granting the loan. His monthly mortgage payment is $60,000.

Paul has stated nothing was out of order. The Stanhope Hotel bills, he says, were for entertaining investment bankers who could help CenTrust, the jet a legitimate business expense. Ditto the half million in home security costs for an executive whose work never stopped. Any CenTrust-paid expenses around the house were reimbursed, he asserts. The Baccarat and Porthault were nothing more than any Fortune 500 executive would do for his corporation.