IF CON MAN CAN CON CIA, WHAT CAN THE KGB DO?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00552R000605490063-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: September 16, 2010
• Sequence Number: 63
• Publication Date: September 8, 1985
• Content Type: OPEN SOURCE

Approved For Release 2010/09/16 :CIA-RDP90-005528000605490063-0
TAMPA TRIBUNE (FL)
8 September 1985
An Editorial
If Con Man Can Con CIA,
What Can the KGB Do?
WHAT IN THE RECORDS of the
U.S. District Court in Honolulu
is only a trial for fraud, perjury and
income tax evasion is turning into a
damning indictment of the Central
Intelligence Agency.
The defendant, Ronald R. Rewald,
41, described by his attorneys as a
man who has the "ability to convey
sincerity," is charged with swindling
hundreds of investors out of $22 mil-
lion. The attorneys' defense is that
he was used and abandoned by the
CIA - "a spy left out in the cold."
The evidence indicates otherwise.
What is so disturbing is that among
those he conned are a number of CIA
agents and higher-ranking officials
- and the agency itself.
A year after he moved to Hawaii
in 1977, Rewald was awalk-in volun-
teer to the CIA office in Honolulu,
averring he had helped finger stu-
dent anti-war activists for the agency
in the 1960s. The Honolulu station
chief, Eugene J. Welch, suggested
that he might be helpful in providing
"corporate cover" to agents needing
to conceal their identities. When
Welch's successor, John C. Kindschi,
arrived on the scene, Welch passed
Rewald on to him. Meanwhile, the
comedy of errors by the CIA thick-
ened.
The agency early discovered that
Rewald had left Wisconsin after
being convicted of petty theft in a
franchise fraud scheme. The agent
in charge of "corporate cover" ar-
rangements not only overlooked
that, but also recommended against
a full background investigation of
Rewald when the latter complained
that interviews with his neighbors
might create "unfavorable attention
and possibly publicity."
Kindschi himself wrote the CIA
Office of Security that Rewald~was a
champion sprinter, former profes-
sional football player, pilot, devout
churchgoer and highly successful
businessman. Asked at the trial how
he knew this, Kindschi, who went to
work for one of Rewald's companies
after retiring from the CIA in 1980,
said, "He told me."
Rewald received nothing from
the C1A for the cover he provided ex-
cept $2,800 to cover expenses such as
telephone bills and stationery used in
the cover operation. But he used his
CIA connections as a credential for
peddling his investment scheme that
promised its victims 26 percent a
year on their money. So credible was
he that at least five and perhaps as
many as 12 CIA employees put their
money with him. Kindschi himself in-
vested and lost $100,000 of his own
money and another $100,000 belong-
ing to his 86-year-old mother.
Some investors reaped profits for
a while; Rewald used the money
from later investors to pay "divi?
Bends" to those who came in early;
they in turn hyped his scheme tc
other potential investors. He lived
lavishly, with fleets of cars, ar
ocean-front mansion, and twc
ranches; he bought a polo club and a
string of polo ponies. He later said he
did so because the CIA demanded
that he live in "high-flying" style.
His downfall came not through
the CIA, but because in 1982 an Inter-
nal Revenue Service agent, Joseph
Camplione, became curious when his
children told of Rewalds' children,
who attended the same school, being
brought to classes in chauffeur-
driven limousines. Camplione found
Rewald had reported receiving no
income for the past two years and
opened an investigation. When Re-
wald found himself facing the IRS in-
quiry, he informed the CIA and per-
suaded it to stop the investigation.
In 1983, after it was reopened, Re-
wald was found barely conscious in a
hotel room, a suicide note nearby.
Only $300,000 of the $22 million he
had taken from investors could be
found.
At the trial, Kindschi said he had
regarded Rewald as "an all-Amer-
ican boy.... I came from a small agri-
cultural community," he went on.
"We all knew each other, trusted one
another. I believed I could read peo-
ple quite well. I thought I could tell
the good guys from the bad guys."
In the Soviet Union, con men as
able as Ronald Rewald most likely
are to be found working for the KGB.
We shudder to think of the conse-
quences if the CIA is as easy prey to
them as it and some of its agents
were to Rewald.
Approved For Release 2010/09/16 :CIA-RDP90-005528000605490063-0