Oct. 26 (Bloomberg) -- William Kissel says that when each of his two sons turned 16, he gave them a credit card and told them to go out and buy whatever they wanted.

``Andrew came back with a fur jacket,'' Kissel, 77, says of his eldest son, who now faces a 10-count indictment for grand larceny, forgery and falsifying business records in New York state court for allegedly pilfering $3.9 million from a Manhattan co-op. He's also charged with federal bank fraud for allegedly swindling mortgage lenders of $11 million in loans.

Until Robert's murder, the Kissel brothers, born in Manhattan and raised in the New Jersey suburbs, seemed to embody success. Robert, who was 40 when he died, was an expatriate banker living in a $20,000-a-month, 3,270-square-foot (304- square-meter) apartment with a view of Hong Kong's skyline and the South China Sea; driving a silver Porsche Carrera; and employing two live-in Filipina maids. He amassed a $20 million fortune.

Robert's death revealed a sordid underside to the Kissels' lives. Robert's wife of 14 years, Nancy, admitted killing him while she was carrying on an affair with a stereo repairman who lived in a trailer park outside Stratton.

Nancy, a former waitress who claimed to disdain Robert's wealth and the life of an expatriate wife, said in her defense that her husband beat her, abused her sexually, used cocaine and drank heavily -- claims that Robert's family, colleagues and friends all vigorously deny.

Andrew, who was released on $1 million bail in July on the condition he wear an electronic surveillance device on his ankle, has pleaded not guilty to the state charges. He hasn't yet entered a plea in the federal bank fraud case.

He's also being sued by lenders, business partners, a title insurance company and a yacht dealership. His wife, Hayley Kissel, a former analyst at Merrill Lynch, filed for divorce in March 2005.

Robert's children are now the object of a custody dispute between Hayley Kissel and Robert's sister, Jane Kissel Clayton, 38, who lives with her husband, Richard, a Microsoft Corp. engineer, and their two children outside Seattle.

Hayley Kissel referred all queries about the children to her lawyer, Joseph Martini of Pepe & Hazard in Southport, Connecticut, who didn't return phone calls.

There was little hint of tragedy to come when the brothers were youths living in Saddle River, New Jersey, where their neighbors included former U.S. President Richard Nixon. William Kissel, a chemist, had risen to become a manager of Fort Lee, New Jersey-based Sun Chemical Corp., the world's largest producer of inks and pigments, before setting up his own company, Synfax Manufacturing, which made toner for copiers, in 1972, also in New Jersey.

As Kissel's career prospered, the family moved from a small apartment on Irving Place in Manhattan to a modest house in Woodcliff Lake, New Jersey, to a ranch-style home in Saddle River, built on two acres with a pool, a semicircular driveway and a three-car garage that held William's Cadillac Seville and his wife Elaine's Mercedes-Benz convertible.

``Andrew was a very different cat,'' his father says. ``He has incredibly good taste and sense of design. He always wanted to be in real estate, and he made a lot of money, too, but he thought he had figured out a way of being able to spend more than he made.'' William Kissel says he's estranged from Andrew.

When Andrew was 19, he went into business, opening a shop selling accessories for four-wheel-drive vehicles and trucks on Route 17 in Mahwah, New Jersey, says Danny Williams, 42, who worked with Andrew at the shop.

Andrew earned a bachelor's degree in communications from Boston University in 1983. On his Web site resume, Andrew Kissel says that from 1988 to 1991 he was a vice president in the real estate group at Shearson Lehman Brothers Inc., where he was responsible for the management, acquisition and disposal of a $350 million real estate portfolio. Tasha Pelio, a spokeswoman for Lehman, said the company doesn't have records going back that far.

Robert, meanwhile, attended the University of Rochester and worked in his father's toner business after he graduated with a bachelor's degree in optical engineering in 1986.

That same year, he took a vacation to a Club Med resort in the Turks and Caicos Islands, where he met a slender, 22-year-old waitress named Nancy Keeshin.

Nancy, who'd been born in Michigan and had then moved to Oakland, California, with her mother after her parents divorced, was studying art at Parsons School of Design in Manhattan's Greenwich Village and working in restaurants, including EJ's Luncheonette. About a year later, the couple moved in together, and they were married in 1989.

The following year, Robert enrolled at New York University's Leonard L. Stern School of Business, graduating in 1991 with a master of business administration.

Kissel studied under Edward Altman, a professor of finance who invented the Z-score, a mathematical formula that measures whether a company is at risk of bankruptcy. Altman made Robert a teaching assistant.

Robert began working in 1991 for Ladenburg Thalmann & Co., a Wall Street investment firm, where he specialized in distressed debt. A year later, he joined Lazard Freres & Co., where he became a vice president in the high-yield group.

In 1997, he was hired by Goldman Sachs Group Inc., which sent him to Hong Kong as a managing director in its Asian Special Situations Group. Goldman Sachs, Lazard and Merrill Lynch declined to comment. Ladenburg didn't respond to requests for comment.

At about the same time, Andrew set up Hanrock Group LLC, the real estate company through which he would later funnel some of the money he's accused of stealing from the co-op.

Nancy Kissel testified at her trial that Robert was involved in the founding of Hanrock, which she said was chosen as a name because the first four letters stood for the initials of the brothers and their wives, Hayley and Andrew and Nancy and Robert.

Andrew was president at Stamford-based Hanrock, which buys, sells and manages commercial and residential real estate. He owned the company with partner David Parisier.

Andrew's full-time job was running Hanrock Group, and Robert received checks from his brother, Nancy told the court. She said Robert had also sometimes discussed returning to the U.S. and setting up his own fund in Connecticut with Andrew.

According to Michael Collesano, an attorney appointed by the New York Surrogate's Court to protect the Kissel children's interests, Robert invested $500,000 in one of Andrew's real estate ventures.

As Robert Kissel arrived in Asia, the region was in an economic crisis following the collapse of the Thai baht and other currencies. Foreign investors had dumped shares in Asian companies that could no longer repay dollar-denominated loans. That created lots of distressed debt.

One of the biggest deals the Goldman team worked on took place in December 1998, when it teamed up with General Electric Capital Corp. to pay $560 million -- 21 percent of face value -- for assets the Thai government had seized from bankrupt auto finance companies.

``Rob was absolutely one of the best-respected investors in Asia after the crisis,'' says Joseph Draper, 41, a Hong Kong- based managing director at Citigroup Inc., the world's biggest financial services company by market value.

Draper had worked with Kissel when their employers teamed up to buy bad debts in Taiwan, and the two men had been preparing competing bids for $1.8 billion of distressed debt being sold by Bank of China when Robert was murdered.

Merrill Lynch rewarded Kissel with a salary of $175,000 plus bonuses that averaged $2 million a year, Antony Hung, Merrill's head of Asia-Pacific Rim debt markets, told the court.

Nancy threw herself into volunteer work, helping out at the Hong Kong International School, a $15,000-a-year private school her two oldest children attended, and in the United Jewish Congregation. She held an annual Halloween party for all of the residents of their 20-story tower at Parkview.

When the severe acute respiratory syndrome epidemic broke out in March 2003, Nancy and the children, along with one of their maids, fled to the family's home in Stratton. When Nancy needed someone to repair the house's sound system, she called Lance Del Priore, 41, who had installed a home entertainment system in Andrew Kissel's Stratton house and had been recommended to Robert by his brother. Del Priore sent his own brother, Michael, 42, to do the work.

Nancy began an affair with Michael, who lived in a trailer park outside Stratton. At her trial, Nancy denied that Del Priore was interested in her wealth.

``He had an understanding of what my life was about -- struggling to be accepted for who I am as a person, not where I live or what I drove or my jewelry,'' she told the court.

Still, says Lance Del Priore, who fired his brother over the affair and no longer speaks to him, ``Nancy was spending thousands of money on this idiot.'' Lance Del Priore told Bloomberg News that he knew of the affair but agreed not to tell Robert or Andrew about it. Michael Del Priore, who now runs Amity Security & Alarm, in Hinsdale, New Hampshire, didn't return repeated phone calls.

Robert Kissel became suspicious of his wife and, on June 6, hired Alpha Group Investigations, a Farmingdale, New York, private investigation firm, according to Frank Shea, the firm's president.

Shea, 57, a former New York Police Department detective whose firm was paid a total of $25,000, sent investigator Rocco Gatta to Stratton to spy on Nancy. Gatta saw Michael Del Priore drive up to the house and called Shea, who happened to be on the phone with Robert, Shea says.

Robert called Nancy immediately and confronted her, Shea says. Del Priore left the house minutes later, Gatta told Shea. On other occasions, Del Priore stayed at the house until late at night, he said.

Robert Kissel had installed spyware on his wife's computer. On her return from the U.S., he found she had made Internet searches using key phrases such as ``overdose of sleeping pills'' and ``medications causing heart attack,'' prosecutor Peter Chapman told the Hong Kong court during Nancy Kissel's trial.

In late September, Robert found bills for a mobile phone that Nancy Kissel had acquired secretly, giving her address as the Hong Kong International School, according to David Noh's testimony. It was the final straw for Robert, said Noh, in whom Robert had confided about his marital problems.

Still, the couple appeared in public together. On Oct. 8, Nancy and Robert attended a banquet hosted by International Bank of Asia, a Hong Kong-based lender, at which former U.S. President George H.W. Bush was the guest of honor.

The pair had had a terrible argument, Nancy said in her testimony, and so arrived too late for cocktails with Bush. During the dinner, Nancy approached Bush's table, tapped him on the shoulder and asked to introduce him to her husband. The ex- president then posed for photographs with them.

A few weeks later, in the last week of October, Noh told the court, Robert told him he was going to seek a divorce and was going to tell Nancy the coming Sunday night. Noh testified that Kissel said he was prepared to fly Michael Del Priore to Hong Kong so that Nancy would stay there and he could remain close to his children.

That week, Nancy Kissel made appointments with two doctors and obtained prescriptions for hypnotic and sedative drugs, Chapman told the court. The drugs prescribed for her -- including rohypnol, the so-called date rape drug, and three types of sedatives -- were later found in Robert Kissel's stomach.

That Sunday, Nov. 2, Robert Kissel and an acquaintance, Andrew Tanzer, returned to the Kissel apartment from the Jewish center so two of their children could play together. Nancy Kissel made two pink milkshakes and asked the children to give them to their fathers.

At 5 p.m. that day, Noh phoned Kissel and found him ``vague and incoherent, tired and sleepy.'' Later that same night, police say, Nancy Kissel bludgeoned her husband to death using an 8.3- pound (3.8-kilogram) lead statue -- a Keeshin family heirloom topped with two female figurines. She killed him in their bedroom with five blows to the head and slept with his body for at least two nights, the court was told.

Kissel missed a conference call that night, said Noh, who became concerned when he failed to show up for an important meeting the following day to prepare the bid for Bank of China's distressed debt.

She packed Robert's body in the carpet and, on Nov. 5, hired workmen to carry it down to the storeroom. One of the workmen recalled in court that the carpet gave off a strong smell, like salted fish.

Before and after the murder, Nancy Kissel and Del Priore made frequent calls to each other, according to the prosecutor, who read out in court the numbers she'd dialed from her cell phone. On. Nov. 4, she spoke with a woman friend and confirmed that she'd be flying to San Francisco on Nov. 17 for cosmetic surgery on her breasts.

After the murder, Nancy Kissel also visited a doctor, claiming to have been assaulted by her husband. She told her father, Ira Keeshin, 61, the same story, and he flew out to Hong Kong to be with her.

On Nov. 6, Nancy made a police report alleging assault. The same day, Noh reported Robert missing. Police investigating his report went to the Kissel residence and, after talking to Parkview staff, asked Nancy for the keys to the storage room. They found Robert's body there and arrested Nancy.

Back in Stratton, Lance Del Priore learned of the murder when he got a phone call from Andrew Kissel. ``Your brother killed my brother,'' he says Andrew told him.

That October, Andrew paid the co-op more than $4 million to cover the discrepancies. The parties signed papers releasing him from liability, Kissel's lawyer said. Andrew then sold his three units in the co-op for $3 million. In November, the New York district attorney's office began investigating Andrew's activities at the co-op.

Andrew and Hayley and their two children moved to Greenwich, Connecticut. Hayley, a former ski coach who'd met her husband through his sister, Jane, was working as a stock analyst at Merrill Lynch, following companies in the leisure and toy sectors such as Mattel Inc. and Six Flags Inc.

In December 2003, Andrew and Hayley, who quit working at Merrill in 2002, sought temporary custody of Robert's three children. The court granted it in January 2004. At about the same time, Andrew began a series of real estate borrowings by using two properties in Greenwich, one on Quaker Lane and one on Tuttle Road, and the Stratton vacation home as collateral.

A fourth property became the subject of the federal bank fraud charge. On July 26, 2004, according to a criminal complaint filed by FBI Special Agent Catherine McPadden, Andrew got a mortgage loan of $1.6 million from Washington Mutual Bank to buy a four-bedroom, five-bath Colonial-style home at 43 Burning Tree Road in Greenwich.

The following February, Andrew filed an allegedly phony release from the mortgage with the Greenwich town clerk. This release led a second lender, Hudson Valley Bank of Yonkers, New York, to believe the property was unencumbered by debt.

Hudson Valley gave Kissel a $4.5 million construction line of credit using the property as collateral. He repeated the process twice more, with Independence Community Bank of Brooklyn and Connecticut-based Ridgefield Bank, borrowing a total of $11 million before the scheme was uncovered.

Two days later, Cathy Seibel, an assistant U.S. attorney for the Southern District of New York, said at a bail hearing in White Plains, New York, that Andrew is under investigation by the FBI for frauds that could, in all, total $50 million.

At the same time, Andrew's marriage to Hayley was unraveling. The couple continues to live together with their two children and Robert and Nancy's three.

A court-appointed attorney who represented Nancy's children, Michael Collesano, describes Andrew as a recovering alcoholic. Nancy Kissel said in her testimony that Andrew had received medical treatment for cocaine abuse.

In October, New York Surrogate's Court awarded Clayton temporary guardianship of Robert's children. The case was heard in New York because that's where Robert's will -- which left everything to his wife -- was recorded. Under New York law, Nancy is considered as dead because of the murder, and the children will inherit their father's estate.

Hayley Kissel had wanted to keep custody, which is different from legal guardianship and which is scheduled to be decided in a Connecticut court. ``The children are happy and safe in my house,'' she told Judge Eve Preminger.

If her appeal fails, she could apply to serve the rest of her sentence in a U.S. prison. In either case, it's a far cry from her cosseted life at Parkview, where Robert Kissel's silver Porsche Carrera still sits, unclaimed, in the parking lot.

As for Andrew, he pleaded not guilty in October to charges of grand larceny in the co-op case, for which he faces a prison term of as much as 25 years. He hasn't yet entered a plea in the federal fraud case. He remains under house arrest in Connecticut.

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