VERY LITTLE IS LEFT FOR REWALD CLIENTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00494R001100690019-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: August 10, 2010
• Sequence Number: 19
• Publication Date: August 17, 1983
• Content Type: OPEN SOURCE

Sanitized Copy Approved for Release 2010/08/10: CIA-RDP90-00494RO01100690019-1
STAT
L.LLO IIUIIUIUIP
Aloha!
Today is Wednesday,
Aug. 17, 1983
Hawaii
Governor, defends his nomina-
tion of James Wakatsuki for Su-
preme Court Page A-3
D.G. "Andy" Anderson is to be
' arraL~ggned Aug. 26 on charges
of violating building code at
restaurant-retail complex
Page A-8
The Nation
Coastal areas of Texas and
Louisiana brace for Hurricane
Alicia
Page F-1
' - 3shington
Pentagon and Environmental
Protection Agency agree on
procedures for cleanup of toxic
chemical pollution in and around
military installations
Page E-10
The World
Chadian president rules out ne-
gotiations with rebels who hold
northern part of nation
Page F-1
U.S. takes extraordinary step of
apologizing to France for help-
"rng accused Nazi war criminal
Klaus Barbie escape to South
America three decades ago
Page A-10
Editorial * } ''
?.Thomas Hayes: "Money spinning that fast obviously s a very
shaky financial situation."
ery little is left
for Rewald clients
By James l ooley
,ldcerfiser Staff Writer
"The money is gone," federal
bankruptcy trustee Thomas
Hayes said in court yesterday of
some $10 million to $12 million
entrusted by 400 investors to
businessman Ronald R. Rewald.
After hearing more than a
dav's worth of testimony from
Haves, ex-Rewald employees
and other witnesses,' federal
Senior District Judge Martin
Pence continued a freeze on all
of Rewald's personal assets.
Pence said the evidence
showed a "very strong probabil-
ity" that Rewald was operating
a classic scam known as a
" Ponzi scheme."
Rewald's attorney, Robert
Smith, told Pence yesterday
that Rewald wants to repay
investors and is willing to turn
over personal assets to do so.
Pence termed the offer an
empty gesture."
Smith says efforts are contin-
uing to get immunity from
prosecution for Rewald if he.
agrees to help get the money
back. .
ITestimony .and financial
records showed that Rewald's
firm - Bishop, Baldwin, Re-
wald, Dillingham and Wong Inc.
- while "guaranteeing" 20 per-
cent interest on investments
made with the firm, was really
only using new, investors'
money to pay the interest to old
,investors when the "guaran-
teed" payments came due,
Pence said.
In the meantime, all the
principal - the millions of dol-
lars of investment money depos-
ited with Rewaid's company -
was being spent by insiders,
principally Rewald himself. on
personal expenses. Pence said.
"So long as the Ponzi scheme
of paying the old investors out
of new ones' funds continued,
the company 'prospered' to the
benefit of those on the inside,"
Pence said.
Haves, who took control of
the firm Aug. 4 after Rewald
attempted suicide and the
company foundered, had esti-
mated in court Aug. 5 after a
brief examirlatibn of company
financial records that 300 inves-
tors were owed some $17 mil-
lion. That estimate was made
after only one day on the job
a
and on the base incomplete
records.
He said yesterday he is not
cure or the tnral~z. but has iden-
tified 400 investors. He also said
he believes the $17 million fig-;
ure represents principal plus ac-.
crued and projected interest
earnings.
Hayes said he still is not sure
exactly how much cash was en-
trusted to the firm, but had "a
gut feeling" the total was some.,
S10 million to $12 million.
He was not optimistic about
recovering anything close to"-
that amount for repayment to:
investors - the majority of
them Hawaii residents, with a,
sizable minority from California,
other states and some foreign
countries.
Hayes said that he has control
of corporate cash perhaps total-:
ing $200,000 and may be able to
liquidate some furniture and fix-
tures from the company office.
in downtown Honolulu and,
from another office in Napa.
Calif.
Bishop, Baldwin stock hold-:
tags in two companies here -
the only investments Hayes
could discover - "may not
have any value at all," Hayes
said. Both companies, Motorcars
Hawaii Ltd. and Aspengren.
Travel Inc., have been losing
See I itfle nn Pw~ A?4
Sanitized Copy Approved for Release 2010/08/10: CIA-RDP90-00494RO01100690019-1