Raman Handa and the Bling Job
Illustration by Bill Mayer
They left in the middle of the night, the story goes, taking with them on an airplane bound for India 17 Italian leather suitcases stuffed with everything but the family dog. No forwarding address, no plans to return. It was Saturday, December 15, 2007, ten shopping days before Christmas, and four until news would leak to the local press that Raman Handa, owner of Cambridge-based jewelry chain Alpha Omega, had packed up his wife and two adult children and fled the country, quickly and quietly, without a word to store employees, neighbors, or even the cousin he’d followed to the United States 30 years earlier. In the absence of evidence, the rumor mill spun tales of bags loaded with merchandise: watches, diamonds, bricks of gold. And indeed, an inventory count would later show that roughly $8 million of Alpha Omega’s reported stock could not be accounted for.
Alpha Omega had become very well known in certain circles in and around Boston, earning fame as much for its prodigious marketing as for its unrivaled selection of exclusive watch brands like Rolex, A. Lange & Söhne, Vacheron Constantin, and Panerai. But as the details surrounding the Handas’ disappearance grew increasingly fantastic, it became clear that the seven-store chain had been surviving on glitter and pretense. The outrageous parties, photo ops with Bill Clinton and P. Diddy, and general ubiquity in magazines, on billboards, and in sports stadiums concealed a seriously troubled side to the business, one that included out-of-control debt, fed-up creditors, and nervous employees. Watch and jewelry vendors had been complaining of slow payment for years; toward the end, many started to withhold new shipments. Upscale line Breitling pulled its stock out of the stores altogether.
A year after the story first broke, the family’s flight is still described by people who knew them as a major shock, unexpected and out of character. Those who dealt with and, for a long time, profited from the Alpha Omega gravy train—creditors, vendors, and the media, in particular this magazine—told themselves that the bloated orders of watches and advertisements were an indication of the company’s profitability and never its excess, that any debts it amassed would be repaid because Handa always spoke of himself using words like “honor” and “integrity.” Not everyone was fooled, though. “We all said what [Handa] was doing was too good to be true,” says John Green of jeweler Lux Bond & Green. “But he thought he was king. He thought he could own the world overnight.” In the end, the question isn’t how Handa’s business could have failed. It’s how anyone could have expected it wouldn’t.
Watch collectors are not merely collectors. They are aficionados. The average enthusiast owns between 10 and 20 timepieces, and most make their purchases the way some women acquire shoes; as in fashion, there’s always a new style, inevitably better than the last one, ideally better than your neighbor’s. “For an affluent customer, it’s similar to having multiple cars,” says Craig Rottenberg, president of Long’s Jewelers. “It’s a status symbol. It’s good to have variety.” Some collectors talk of building up to specific brands, of obtaining a particular watch only when they are ready for it. It is an industry-wide sentiment: At the largest and most important watch fair, Baselworld, held each spring in Basel, Switzerland, brands carefully hand-select their preferred dealers. In other words, you don’t choose Rolex. Rolex chooses you.
The yardstick by which watches are judged is known, quite aptly, as complications. Tourbillon escapement, chronograph, moon phase—complications are things a watch can do other than tell time. The more complicated the watch, the more difficult it is to design, assemble, and repair, and therefore the more it costs. A Patek Philippe nautilus, for example, has 327 parts, a 12-hour monocounter, chronograph hand, and sapphire crystal case back. It can retail for $40,000. Watchmaking is perhaps the only industry in which a complication is regarded as a good thing.
The watch business—and its dynamics—was a perfect fit for Handa, who came from a wealthy New Delhi family and had an affinity for flash. His father was a gemstone exporter who helped his son invest in several retail businesses in London, where Handa lived for nearly three years before moving to the United States in the ’70s with wife Nilma and their two young children, Amit and Nidhi. In 1980, he bought a tiny jewelry shop in Cambridge called Alpha Omega. But Handa quickly found that people were reluctant to buy gems from a guy they didn’t know. “Diamonds,” he once said, “are built on history and trust.” (Handa, who presumably is still in India, could not be reached for comment on this story, and e-mails to family members went unanswered.) So he took on watches, dealing in well-known brands like Seiko and Movado.
In the late ’80s, Handa partnered with Swatch to open a store on JFK Street in Harvard Square. At the time, Swatch was the hottest brand around. The space was 5,000 square feet, with a watch museum in the basement and a selection upstairs better than any in the world. Handa’s relationship with Swatch helped him attain for his own store in Cambridge some of the maker’s high-end lines, including Omega and Breguet. Among collectors, Handa was becoming someone to know.
“It was important for him to be seen,” says Jack Winer, a former Alpha Omega vice president. And so began the advertising juggernaut. “Any kind of medium—newspapers, billboards, magazines,” he says. “In his mind, it was worth it to grow the business and become known and bring customers in.” While others put 3 percent of profits into advertising, Handa spent 8. He was fawning with clients, a charmer, and a regular at the most expensive restaurants in town. He made sure Alpha Omega was active in charity galas and benefits, and sponsored parties whenever possible. Harvard’s annual Hasty Pudding Awards, an Alpha Omega favorite, provided a prime opportunity to get Handa photographed with honorees such as Ben Stiller, Scarlett Johansson, and Sandra Bullock. The company was just as aggressive in seeking editorial coverage (and over the years, its numerous mentions in Boston‘s pages, along with its 10 Best of Boston awards, would further contribute to Alpha Omega’s, and the Handas’, glitzy public profile). “Raman lived for marketing himself and his company,” says Alexis Gilbode, a former jewelry buyer.
Handa drove a top-of-the-line Mercedes and lived in a sprawling Lexington mansion built in 1915 to emulate a Tuscan villa. On the lush grounds, the Handas would host famously ostentatious garden parties, where hundreds of friends and business associates mingled among the rare Japanese maples and rhododendrons. He’d throw showy “customer appreciation” events, with invitations sent on what a former employee calls “needlessly thick” card stock. At one party for the watch line Girard-Perreguax, guests enjoyed Woodford Reserve bourbon, five-pepper sirloin and Kurobuta pork ribs from Grill 23, and cigars from LJ Peretti. Another event, introducing the arrival of Carl F. Bucherer timepieces, featured mannequins dressed in gowns previously worn by Audrey Hepburn, Jacqueline Kennedy, and Nicole Kidman, borrowed from the private collection of Jean Claude Mastroianni. “He wanted to be the Big Maha, we liked to say,” recalls one former associate.
It didn’t take long for vendors to notice. In 1996, Handa became one of the rare few American retailers to attend Baselworld, still largely made up of European and Asian dealers. The exposure helped him build a global clientele and land a number of new watch accounts, including A. Lange & Söhne and the mighty Rolex. Over the next six years, he would open stores in Natick, Burlington, and Chinatown. In 2002, he beat out 50 other bidders to take over the lease at 1380 Massachusetts Avenue in Cambridge, a three-floor, 6,100-square-foot space with 21 front windows that served as built-in billboards. Maybe, he’d tell people, habitually vague on the details, he’d take Alpha Omega national.
From the beginning, Handa was a man who would do anything for a sale.
A happy customer, he would tell his bewildered staff, is a repeat customer. He’d give deals—often very good deals—to anyone who asked, and to many who didn’t. It was as if he couldn’t help himself. “Raman had endless family and friends,” says former manager Beverly Richards, with sarcasm. Many would save as much as 30 or 35 percent. Says former saleswoman Carrie Dobay, “[It] was outrageous. Outrageous!”
Of course, a clientele built on discounts comes to expect certain things. Dobay says watch companies would complain that Handa was ruining the industry. Local competitors struggling to match Alpha Omega’s prices, she adds, demanded that he stop. Employees warned he was diluting the brands he sold. “He’d just say, ‘You give a customer a good deal and he’s yours for life,'” says Dobay. “When they came back, though, they expected more and more and more.”
A consequence of Handa’s sales philosophy was that he was chronically slow to pay his bills. “The way Raman worked was to pay people when he needed a product from them,” says Dobay. “He’d pay just enough to get more.” Sometimes vendors told Alpha Omega employees that items were on back order, a polite way of saying they weren’t getting any new merchandise until Handa paid up, according to former employee Andrea Notermann. Gilbode says she was regularly asked to issue vendors postdated checks. “Every month, I’d have to call the vendor and tell them not to deposit the check we’d sent [until later],” she says. “It was embarrassing. One day, I had a vendor flip out on me: ‘You don’t know what he’s doing to your reputation!'”
With other vendors, Alpha Omega deployed a different stalling tactic. “It was just suddenly the phone would go dark, and you’d be leaving voice mail after voice mail,” says Marc Ofte, who worked with the company as a watch rep. After considerable prodding, he says, Alpha Omega would pay its bills, and “then they’d always come back, and place a large order. They pretty much said how they were going to do business with you, and if you didn’t like it, fine. Have a nice day.”
While most employees describe Handa as a caring and charismatic boss, they also say he treated them with shameless parsimony. “The man could squeeze a penny out of a penny,” says Richards. For years, says Dobay, he refused to pay employees overtime on Sundays, until one filed a complaint with the state; Christmas bonus one year was a $3 box of cookies. After Handa transitioned his sales staff from salaries to a commission-based compensation system, employees would complain that commissions simply weren’t being paid. One believes that sales logs in the company’s computers were tampered with, and in some cases erased. “If you didn’t keep your own receipts from sales you made, you were screwed,” says the former employee. “People were extremely stressed out over it.”
And yet the full-page ads in Boston, the Globe, and elsewhere continued apace, and people continued to see Handa’s business as one that dominated the local market. His promotional mania was partially underwritten by co-op advertising, in which watchmakers partner with stores to run ads featuring their line. Co-op dollars are contingent on sales; judging by the volume of co-op ads, Handa was selling through the roof. And he was moving product—just not exclusively in his stores.
Handa was shuffling a portion of the watches he sold onto the gray market, which involves an authorized dealer, like Alpha Omega, selling to an unauthorized dealer, who could be anyone without a contract to sell the high-end brand in question. The gray market is not the black market. The typical gray-market seller—there are an estimated 200 in the U.S.—deals in high-end product in a showroom or storefront, or online (never out of a suitcase on a street corner at Fanueil Hall). Authorized retailers who provide merchandise to gray-market sellers violate the terms of their agreements with their suppliers, though the practice is not illegal. Instead, it carries the risk of another kind of punishment: a ban on carrying the brand. In the mid-’90s, before Alpha Omega acquired its Rolex account, the watchmaker eliminated most of its Boston-area retailers for their gray-market dealing and gratuitous discounting.
Sometimes, going gray market can serve as a way for a retailer to clear inventory, either to satisfy minimum purchase requirements set up by a watchmaker or to fulfill co-op quotas. In such cases, the retailer doesn’t make much, or any, money from the sale. Other times—such as with hard-to-find watches—selling to a gray-market dealer can bring in substantial profits, profits that would go unrecorded in sales reports. For example, a stainless steel Rolex Daytona, one of the rarest and most coveted watches in existence, can command two to three times its retail price on the gray market. “It’s the Holy Grail of Rolexes,” says David Bergman, a collector in Needham. Handa could make a lot more selling a Daytona on the gray market than he could in his store. Dobay and another employee of the Harvard Square location, who asked that his name be withheld, say that the store’s inventories would show that it received seven or eight Daytonas annually, but Dobay says, “In eight years, I never saw a single one.”
“[Handa] needed and wanted the money,” says Gilbode. “But the watch rep would want to know, ‘How many watches did you sell this month? And what do you still have in stock?’ Raman would have someone run the reports very creatively.”
Paul Duggan owns a gray-market showroom on Washington Street in the Financial District. Local collectors know him as a man who can get anything. Duggan says Handa sold him watches for 20 years, pre-owned models mostly, but all of them in fine shape, and always at a profit for Handa (and then Duggan). Duggan is convinced that watch companies had ample clues to Handa’s gray-market activity, and chose to look the other way. “At the end of the day, the watch companies are in business to sell and get paid,” he says. “Alpha Omega was outselling every other vendor in the area by far. What did they think was happening?”
Ofte, the watch rep, adds, “Gray-market selling is almost always self-inflicted by the brand. Very often vendors sort of invite these problems themselves. It could be that Alpha Omega was moving so much product that even Rolex had to turn away.”
For those doing business with Handa, it was probably best not to dwell on the details. After all, Handa kept placing orders—and big ones. The more orders he placed, the more flexibility in repayment he was allowed. And he wasn’t going anywhere: He’d remind creditors that his was a family business, and that Nidhi and Amit, now working for the company, were being groomed to take over. Like their father, they made a good impression—polite, nattily dressed, with the Handa charm. “He’d bring his two children into the picture and say, ‘This is my progeny,'” says Gilbode. “‘This is who it’s going to come down to in later years.'”
If trotting out his children didn’t work, he
would play the friend card. “He’d say, ‘I need a little help here, this is difficult,'” says Dan Scully, former president of Boston magazine. Alpha Omega was the biggest advertiser in the magazine’s history. “Until the end, we got what was promised. But there was always a request for an extension. ‘Can you help me? Can you help me?'”
Over the years, Boston made other allowances for Handa, as well. “He’d call to ask if the ‘concierge desk’ was open,” says a former Handa associate. “He wanted hotels, dinners, and to create the illusion that he could afford it all on his own. He’d call and say, ‘I want to go to Grill 23 tomorrow, and I’ll have six people with me. And I don’t want to pay.'” Because of the money he was spending, Handa felt entitled to ask for anything, and Boston advertising salespeople, one says, felt obligated to him to honor his request. (Says Herb Lipson, chairman of Metrocorp, which owns Boston magazine, “We may have booked a table, but we didn’t pay for his dinners, or anything like that.”)
By 2007 it was getting tough for Handa to keep up appearances. He stopped paying vendors. He asked employees to pressure layaway customers to pay faster. That spring, he enlisted Stoughton-based debt-management consultant Altman and Company to reorganize the books. In early November, Altman recruited investment banking firm Consensus Advisors to seek out investors.
At the same time that Handa was presenting Alpha Omega to Altman and Consensus as a solid operation, his family was privately amassing hundreds of thousands of dollars of personal credit-card debt to try to save it. In November, he and his wife gave personal guarantees totaling $1 million to LaSalle Retail Finance, an arm of Bank of America, which were secured by a $1.5 million mortgage on their Lexington house, which came on top of an existing $1.3 million mortgage. Rolex, meanwhile, had approached across-town competitor Long’s about carrying its line, and soon was placing stock in nearly all of Long’s stores. “I don’t want to say the writing was on the wall,” says Craig Rottenberg, “but we knew something was going on.”
Those concerns apparently never reached the team at Consensus. “He made all the right statements about facilitating money coming in to make sure that the business would survive,” says CEO Michael O’Hara. In fact, Handa was set to meet with investors from India on Monday, December 17. Though Handa was upset about potentially losing control of his business, “we really did think he was committed to the process we were involved in,” O’Hara says.
On Saturday, December 15, Handa called an Alpha Omega courier who often doubled as a driver. Raman and his wife, Nilma, were to be taken to the airport. They had two tickets for a flight to India. Weeks earlier, Raman’s nephew Atul, the company CFO, had suddenly pulled his two daughters out of school in Bedford under the guise of attending a family reunion in India. “He said they’d be back after Christmas,” a former employee says. Handa’s children, Nidhi and Amit, left at around the same time.
Over the weekend, O’Hara tried getting in touch with Handa to discuss the upcoming meeting with investors. Handa never answered. When he failed to turn up by Tuesday, LaSalle Retail Finance, which held the secured loan on the business and therefore a claim on the stores’ inventories, obtained a court order to shut down the stores immediately to review their stocks. Of the $27 million of inventory Alpha Omega had on the books, only $19 million could be accounted for. The shops went dark for two days until the Handas named O’Hara chief restructuring officer and tasked him with selling the company off.
On January 2, Handa and his wife filed for Chapter 11 bankruptcy protection; they’d given consent to the move, via e-mail from India, in late December. They owed more than 200 creditors more than $31 million. According to bankruptcy documents, Alpha Omega owed $1.6 million to the Boston Globe, $194,000 to Boston, and $1.44 million to Rolex. Calls to the Globe and several other creditors went unreturned; Rolex public relations manager Carla Uzel would say only that the company does not comment on its relationship with dealers. According to attorney Michael Fencer, who represented the committee of unsecured creditors in the Chapter 11 filings, it’s unknown what, if anything, these companies will recover.
That same month, the U.S. Department of Justice requested the appointment of a bankruptcy trustee, citing “reasonable” grounds to believe that Raman and Nilma Handa had participated in “actual fraud, dishonesty, or criminal conduct” before their Chapter 11 filing. (That request was denied; the court said it offered insufficient evidence to suggest fraud.) The Justice Department’s court filing refers to the alleged “unexplained disappearance” of $6.4 million in inventory. According to court papers, Alpha Omega’s corporate headquarters at 625 Mount Auburn Street contained three safes, to which Raman and Atul had access. One safe was shown in the company books as containing $3.2 million worth of merchandise, the other $3.6 million. After the December 19 inventory, $450,000 was found between the two. The FBI has questioned former managers and Alpha Omega associates, but had no comment on whether the investigation into the company is still active.
Handa didn’t have the strength to watch his company’s demise. At least once he’d sought treatment for stress, and employees say he hadn’t been looking well for months. Handa must have known that though his company could be saved—the investors were flying from India to do just that, after all—poring over Alpha Omega’s books would reveal his success to be little more than a mirage. Handa was a proud man, former employees say, and the company’s salvation would have come at too high a cost. Fleeing meant he never had to confront the reality that was waiting for him.
On a sunny fall day in late October, there’s a crowd gathered on the front lawn of 12 Summit Road in Lexington. A garden party contingent it is not. Through the Chapter 11 proceedings, Handa held out hope that someone would buy his company and allow it to stay open. But there were no takers, and in June the bankruptcy transferred to Chapter 7, effectively killing off the Alpha Omega brand. Now, nearly seven months after the final liquidation of the Alpha Omega stores, the Handas’ last U.S. asset, their house, will be sold at foreclosure to the highest bidder. Though prospective buyers are not allowed inside—this sale is sight-unseen—a peek through dirty windows festooned with ceramic Christmas tchotchkes shows a home abandoned in a rush. Dirty dishes are piled in the sink. Cabinet doors are ajar. A value pack of sandwich baggies sits open on a counter. Outside, weeds overwhelm the gazebo around which the ostentatious parties were once held.
The auction is being conducted by Stanton & Davis, the Marshfield law firm handling the foreclosure on behalf of J. P. Morgan Chase. The auctioneer reminds buyers that they’ll be responsible for any property taxes owed on the house ($26,000), and then begins taking bids.
Employees have alleged further discrepancies since the discovery of the $8 million in unaccounted-for inventory. To secure bigger bank loans, Alpha Omega consistently inflated its stock tallies. “In one instance, $100,000 of the ‘missing’ merchandise that had been logged in was a brand we never even carried,” says one former employee. “Do I think Raman took off with some stuff? Sure. But half the inventory that was unaccounted for I’m sure we never even had.”
Carrie Dobay suspects that Alpha Omega also engaged in insurance fraud. Between June and November 2007, according to Cam
bridge police records, four thefts were reported at the flagship store: three watches valued between $11,000 and $50,000 apiece, and a diamond tennis bracelet. “Many things disappeared,” Dobay says; whether business or personal, all losses would be put through as a claim. “Amit would be showing someone a $20,000 bracelet, and then not know where he put it. He was at his uncle’s restaurant, and all of a sudden a watch was missing off the table. Once a Panerai was stolen from his house.” Months after she’d taken another job, Dobay got a call from police. The officer told her the Handas had accused her of stealing the three watches in the summer 2007 thefts. Dobay was questioned and released, and hadn’t heard anything more by the time the Handas left the country. (It’s unknown what the FBI might be investigating in all this.)
Like the failure of their business, the loss of the Handas’ house, too, was inevitable. Over the course of 12 years, the Handas had refinanced six times, and still owed more than $2 million on it. But today the first bid, thrown out by a surly woman in a sweater and khakis—not your average Lexington millionaire—proves to be the last. “Two million, thirty-one thousand, three hundred and twenty-eight dollars,” she says, to the confused reactions of the bidders who’d come to bargain-shop.
It turns out the woman is with the bank. In high-value foreclosures, the crediting bank rarely takes a loss on property, instead coming in and bidding what it is owed with the intent to sell later. Ownership of the house will go to J. P. Morgan Chase. It is the one transaction in Handa’s life that is uncomplicated, and the message is clear: There will be no deals here today.
Editor’s Note: On February 21, 2017, Raman Handa was arrested in Los Angeles nearly 10 years after fleeing to India, and was charged with 12 counts of wire fraud.