REWALD ASSOCIATE ADMITS FRAUD

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00494R001100700106-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: July 26, 2010
• Sequence Number: 106
• Publication Date: June 15, 1984
• Content Type: OPEN SOURCE

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The materials in the AP file were compiled by The Associated Press. These
materials may not be republished without the express written consent of The
Associated Press.
June 15; 1984, Fr1day, .AM cycle
SECTION: Domestic News
LENGTH: 401 words
HEADLINE: Rewald Associate Admits Fraud
DATELINE: HONOLULU. Hawaii
KEYWORD: Rewald
BODY:
An associate of former investment counselor Ronald Rewald has admitted that
he knowingly helped defraud investors in the now-defunct company he and Rewald
operated.
The Associated Press, June 15, 1984
Sunlin L. S. "Sunny" Wong, 35, pleaded guilty in U.S. District Court on
Thursday to one charge each 'of mail and securities fraud.
He entered his pleas several hours after being indicted by a federal grand
jury. The plea-bargain calls for him to testify against others involved in the
case.
Wong was released on his own recognizance pending sentencing July 23. He
faces a possible 10-year prison term and fines of $11,000.
Wong was president, secretary and a director of Bishop, Baldwin, Rewald,
Dillingham and Wong. which collapsed shortly after a suicide attempt by Rewald
last July 29. Like Rewald, Wonq was a 50 percent stockholder.
The company invested only $630,000 of the $22 million paid into the company
by 400 investors, according to the 22-page indictment.
The rest, it said. was diverted to Rewald's "lavish lifestyle," Wong's
$100,000-a-year salary and payment of salaries and "interest" to create a "false
facade of legitimate investment activity."
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The Associated Press, June 15, 1984
Wonq and Rewald engaged in activities that gave the appearance of
substantial investment activity, when in fact the actual investment of
investors' money was virtually non-existent," the indictment said.
Rewald was not charged in the federal cases but U.S. Attorney Daniel Bent
said the investigation is continuing.
Rewald faces state charges of theft in connection with the operation. He 15
free on bond and is in San Francisco looking for a job.
Reached at the San Francisco office of his attorney, Melvin Belli, Rewald
denied Wong's court admission.
"I knew he was making a deal with the government, but I didn't think he would
lie about it," Rewald said.
Samuel P. Xing Jr., Rewald's attorney in the state case, questioned whether
a jury would believe Liong now that is he a confessed swindler.
Rewald maintains that he set tip and operated the company at the request of
the Central Intelligence Agency. The government has denied the claim, although
court records indicate the company did provide cover for at least one CIA
The Associated Press. June 15, 1984
agent.
Thomas Hayes, court-appointed trustee in the bankruptcy case against the
company, said the federal charges bear out his view that the CIA connection
doesn't explain or excuse the loss of millions of dollars of investor money.
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The Associated Press, June 16, 1984
June 16. 1984, Saturday, PM cycle
SECTION: Domestic News
LENGTH: 99 words
DATELINE: HONOLULU. Hawaii
KEYWORD: National Briefs
BODY:
Sentencing is scheduled July 23 for a man who pleaded guilty to mail and
Securities fraud, admitting he helped defraud investors in the company he
operated with investment counselor Ronald Rewald.
Sunlin L. S. Wong, 35, pleaded guilty in U.S. District Court on Thursday to
the charges. Rewald denied Wang's court admission.
The company collapsed after a suicide attempt by Rewald last July. It
invested just $63D,000 of the .322 million paid into it, according to the
indictment.
The Associated Press. June 16. 1984
Rewald, free on bond in San Francisco, was not charged in the federal case,
but faces state charges of theft.
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DATE /6 Vy PACE_A Z
Hawaiian Pleads
-Guilty in Fraud
(3f $21 Million
By Howard Kurtz
wawa$tCf Post staff Wrltw
` The . president of . a bankrupt
Hawaii investment .firm that claims
to have had extensive ties to th? CIA
has pleaded guilty to charges that he
defrauded, investors of more than
$21 million. ,..
A federal grand; jury in Honolulu
Thursday:.... ndicted , Sunlin L.S.
Wong, 35, for' mail- fraud and secu-
rities fraud, according to U.S. Attor-
)jey Daniel Bent. A.few hours later,.
Wong entered a guilty plea.
Among other things, the indict-
ment charged that Wong's firm,
Bishop, Baldwin, Rewald, Dilling
) am & Wong, falsely told investors
that it "gave,{ business advice to the
U.S. Senate, House of Representa-
tives, White House, ex-presidents
and Saudi Arabian princes."
The firm's collapse gained wide-
~pread attention when Wong's part
her, Ronald R. Rewald, sued the
CIA, contending that he was a covert
agent, that he established the firm at
the agency's direction and that $ome
~f its subsidiaries were "used com-
letely and exclusively for .CIA CO-'
vert operations."
: CIA officials have said the ancy
had only "a slight involvement" with
the company and did not direct its
operations.
Wong, who faces up to 10 years in
prison and $11,000 in fines, pleaded
guilty in exchange for immunity
from further, prosecution. Law en-
or cement sources said he has agreed
o cooperate in the continuing inves-
'igation of Rewald's activities.
r Rewald has been charged by the
'Securities and Exchange Commis-
[Sion and Honolulu authorities with
dlefrauding investors. The sources
;said federal prosecutors believe that
Wong's guilty plea confirms that
~13ishop, Baldwin was an elaborate
fraud scheme
i The Wong indictment said that
Pishop, Baldwin "gave the appear-
ance of substantial investment ac-
.tivity" while investing only $630,000
of nearly $22 million in clients' mon-
ey. The indictment charged that
$21.3 million of investors' funds was
,used to perpetuate the scheme and
}'to maintain, Rewald in an excep-
?ttonally lavish life style."
Bishop, Baldwin officials falsely
Mold investors'that the firm had been
:an Hawaii for 20 years, that they
would receive a 20 percent return on
their money, that the federal govern-
ment was insuring investments of up
to $150,000 and that there was a
two-year waiting list of potential cli-
ents, according to the indictment.
Some investors, who included sev-
eral former CIA agents and retired
military officers, have charged in
lawsuits against the CIA that the
Agency shared responsibility for the
:bankruptcy.
Rewald charged in his suit that
:the CIA "established an operating
budget for Bishop, Baldwin of sev-
eral million dollars, and the agency
,used Bishop, Baldwin checking ac-
-counts and reimbursed Bishop,
Baldwin and its agents and employes'
[for] their expenses for agency work.
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DATE /f, s:J'UMe FLY' PAGE
,
#anrmi M a rmer:AtauypoDptenr- The firm is in bankruptcy proceed-
Called Key to Defense
Lawyer Seeks
Records
For Ac
cased S s Case
py
By Lena H. Sun" defense information to a Soviet
Waa,wswna+atatartwrk.r agent.
Lawyers for accused spy Richard In denying the change of venue,
' Craig Smith yesterday told a federal the judge ruled that FBI surveillance
judge that sealed records of a de- of Smith in Seattle in the six weeks'
funct Hawaiian investment firm al- before his arrest April 4 at Dulles In-
leged to have been run by the Con- ternational Airport did not consti-
tral Intelligence Agency are crucial tute an actual arrest, as the defense
to Smith's case. contended. Federal- law provides that
"Smith's defense rests upon the an individual charged with commit-
fact that he wss working for the CIA ting crimes outside ` the United
and reported to the Hawaiian [CIA] States be prosecuted in the district
station," A. Brent Carruth, one of where first arrested or taken into
Smith's lawyers, told the judge. custody.
His comment came as he sought The judge also denied a defense
records of the Honolulu firm, called request to suppress some incriminat-
---Bishop, Baldwin, Rewald, Dung. ing statements Smith made to the
ham and W "Those records will FBI in interviews prior. to his arrest.
show that the CIA did maintain tale- The request for Bishop, Baldwin's
phone" numbers at Bishop, Baldwin, records. relates to records that have
and that they did run operations up been sealed by a: federal judge in
thW, he said. Hawaii at the request of the CIA.
S 'th
f
s
c
Y v juals whom
led, : eve to be wgddipg for the
Emit could be semen to jam gt lea
t twi
e b in
Bellevue, W8*, has saw was, act- charged with fraud in connection
uu~ ureter rho direction of the CIA with its collapse last July.
When a gavel national defense infor. The CIA reimbursed the company
;? .matron to a Soviet KGB officer. He for approximately $3,000 worth of
l,nccused of providing the identities long distance telephone calls, telex
Hof ;six U.S. -double agents to the charges and stationery for some
KGB bfficer in Tokyo for $11,000 at.. small subsidiaries operating out of
-'ter two-meetings in November 1982 Bishop, Baldwin's offices that were
and one in F?bruary 1983. used by the CIA as "commercial cov-
District Judge Richard I.. Wil- era" for at least one bona fide CIA
. 'wed the request yesterday ~ agent according to company records.
':ruling'it was too broad. He set a That CIA agent, who called him-
hearing for Wednesday to consider self "Richard.Cavannaugh," used a
another request for the records, if subsidiary, CMI Investment Corp:,
the rd.
-defense outlines specifically how as a cover beginning in 1979, acco
the investment company's docu. ing to an official familiar with the
manta relate to Smith's case. Hawaii investigation.
Smith has said his CIA operatives, "Cpvannaugh" had business cards
who. he said used the aliases of Ken and stationery printed listing CMI
Wbite.and Danny Ishida, gave him a and a.': -Hawaii telephone number
Honolulu telephone number to call identical to the one Smith said he
upon his return to the United States. was given by his CIA operatives, ac-
The number was for one of the main cording to company records.
lines at Bishop, Baldwin, according In" interviews since his release
to . telephone directories and from jail last month, Smith said he
company employee: was given the telephone number ver.
The.' CIA has said it bas no bally at a meeting with his two CIA
records concerning Smith t-his two operatives in July 1982 in Tokyo,
alle64d' CIA operattvee,"fd federal ' four months before the rust of his
proeb tors in ' ''Ab zdndrla and three meetings with the Soviet KGB
Hawaii have denied any connection officer, Victor Okunev.
between Smith's case and the firm's Smith has said he called the num
bankruptcy proceedings in Hawaii. ber at least three or four times, each
The request for the records was, time from the continental United
one of several by the defense denied ? States, and from 'a paytelephone.
by the' judge in a 4Y -hour hearing. Each time, he said, a woman an-
William,s also rejected a regdest to swered, he identified himself and
*trialettafor July 9, .front asked that Ken -Wbte act him.
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