CIA/FRAUD CASE HAWAII

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00494R001100700080-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: July 5, 2011
• Sequence Number: 80
• Publication Date: May 15, 1984
• Content Type: OPEN SOURCE

Sanitized Copy Approved for Release 2011/07/05: CIA-RDP90-00494RO01100700080-1
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP90-00494RO01100700080-1
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP90-00494R001100700080-1
CBS EVEr ZIRG NEWS
15 Hey 19B'+
CIA/FRAUD RATHER: A number of Americans are now suing the Central
CASE/HAWAII Intelligence Agency for money they lost when an Hawaiian
investment firm folded. In the second of two reports,
Barry Peterson and the BBC have investigated the alleged
CIA connection to that firm and what it meant to those who
invested.
PETERSON: Tess Black, a widow invested her life savings
in a company she believed was backed by the U.S.
government. Did work for the CIA. The $83,000 that you
had invested in Bishop Baldwin represented what percentage
of your life's savings? TESS\BLACK: Well, that was it.
PETERSON: To get it back, she is suing the CIA. And so,
is Ted *Frygar, to get back his $300,000. TED\FRYGAR:
The CIA wr,.s set up to deal with commies and people like
that, not to take money from Americans.
PETERSON: They trusted this man, Ronald Rewald, who
headed a company called Bishop Baldwin Rewald, Dillingham
and Wong, who hobnobbed with the rich. Who lived in an
elegant house. Who promised 20 percent interest. Until
suddenly it all went bad. Rewald was arrested, jailed,
his company declared bankrupt. He claimed he was a CIA
agent. Some investors are convinced that Bishop Baldwin
was a CIA operation-and have hired attorney Melvin Belli
to sue the agency, the first such lawsuit ever. Belli
claims he has evidence that shows Bishop Baldwin was
working for the CIA and making money at it, too.
MELVIN\BELLI (Investors' Attorney): This front did very
well in arms deals and did make money for the CIA. And
that's the money that I'd like to see from the trustee
returned to the investors.
PETERSON: The CIA denies that it ran Bishop Baldwin. But
nevertheless, had some company records sealed on the
grounds of national security. Still, the presence of this
man, Jack *Kinchey, strengthened the belief that it was
all a CIA operation. Kinchey was CIA station chief in
Honolulu when Bishop Baldwin was set up, then supposedly
retired and joined the firm. If it was a scam, he should
have known. Yet, he was among the biggest investors.
Frederick *Kalilahehe was Ronald Rewald's chauffeur,
planned to retire by investing in Bishop Baldwin. But now
he's forced to work as a security guard.
FREDERICK\*KALILAHEHE: The CIA involvement, it's real.
PETERSON: Why do you say that? Why are you so convinced?
*KALILAHEHE: Well, I've met these people, and they've
talked highly classified things in back of the seat when
I've been driving. and which I cannot, talk about it.
Continued
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP90-00494R001100700080-1
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42.
JAMES\WAGNER (Bankruptcy Attorney): Because the agency
apparently was in some manner connected with Mr. Rewald's
activities, it is possible that the investors or some of
the investors may be able to make out a claim against the
agency because of. its involvement.
PETERSON: But Wagner believed the CIA involvement was
slight. That in fact, Rewald was just running a patsy
scheme. Money was raised with promises of high interest.
That interest was paid off by attracting new investors.
But there was virtually no real business to make profits.
So, more and more investors had to be attracted or the
scheme would finally collapse. RONALD\REWALD: It's just
obvious that you wouldn't involve all your relatives and
friends in an operation that was a patsy scheme when you
could have taken any amount of money from strangers who
would gladly put it in.
PETERSON: And if the investors had been'paid off..?
REWALD: They would have just kept quiet.
PETERSON: And why should the government be responsible
for the losses? BELLI: Because the guy's name is Uncle
Sam and not Uncle Flimflam. And Uncle Sam has no business
of setting up a deal like this or-in letting a business
like this be set up negligently and letting these people
be taken. ,
PETERSON: Tess Black, her money gone, is moving out of
her house, must move in with her son. But she has faith
that the CIA will be made to pay. BLACK: Because I trust
my country. I really trust my country. I trust that they
will do the right thing.
PETERSON: The lawsuit by the investors is unprecedented
and it could take years to work its way through the
courts. Barry Peterson, CBS News, Honolulu.
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP90-00494RO01100700080-1