'SCAM,' SAYS REWALD COMPANY TRUSTEE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00494R001100710160-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: July 26, 2010
• Sequence Number: 160
• Publication Date: October 2, 1985
• Content Type: OPEN SOURCE

Sanitized Copy Approved for Release 2010/07/26: CIA-RDP90-00494RO01100710160-1
alonolulu SfAr7;0ug4tiq
Wednesday, Oetob.r 2, INS A-3
Scam,' Says Rewald.
ompany Trustee
By Charles Memminger
Star-Bulletin Wviur
The government rested its
case against Ronald Rewald yes-
terday after eight weeks of trial
in which 132 witnesses were call-
ed and thousands of pages of
documents were admitted into
evidence.
But the main point of the gov-
ernment's case was summed up
in one word by its final witness,
Thomas Hayes, administrator of
Rewald's bankrupt company.
Assistant US. Attorney John
Peyton asked Hayes what was
the business of Bishop, Baldwin,
Rewald, Dillingham & Wong.
"Scam," Hayes replied.
It was Hayes who first called
Rewald's operation a scam and a
Ponzi scheme. On Aug. 44 1983,
five days after' Rewald attempt-
ed suicide, Hayes walked the
few blocks from federal court to
the Grosvenor meter and took
control of the company.
Hayes, who looks somewhat
like Norman Mailer said the
door to Bishop, 'Baldwin was
locked when he arrived: But he
said he got in through a back
door when Rewald's office man-
ager. Sue Wilson, opened it.
ONLY MOMENTS before,
angry creditors had forced Re-
wild a company into bankruptcy
arid Hayes had been .named in-
tetim trustee. As trustee, it was
hip job to secure all Company
eta, freeze all bank ,accounts
d keep flies from disappear-
a ishop, Baldwid's cass,
sine files already __ had- been
rjjtiry and tax evasion trial.
d after Wilson realised Hayes
w&s taking over the !company,
,she attempted to walk' out with
a tack of mail, he said ;
ayes said he trailed her to
the elevator and even rode to
the ground floor with her, ex-
plaining his court-appointed
duties. She rode back up with
him, handed over the mail and
then "threw the mail key at
me," Hayes said. `That was the
last time I've seen Sue Wilson."
WILSON WAS ONE of Re-
wald's closest office workers,
signing many of the checks that
went out and managing the of-
fice. At one point, she was being
paid $57,000 a year, more than
Sunlin Wong, company presi-
dent.
Hayes said he found no ac-
counting books for the company.
Within hours of walking into the
office, he told, his attorneys,
James Wagner and Don Gelber,
`"This looks like a scam," Hayes
testified.
It also didn't take long to real-
ize that much of the company
money, which Hayes said was
investors' money, was spent on
Rewald's personal possessions.
Some 30 hours after the bank-
ruptcy declaration, Hayes was
back in court to get an order
ringg any of his persoonaal > ~ assets.
Eventually, US. Judge Martin
Pence froze all of Rewald's
assets, leaving the one-time
multimillionaire indigent.
HAYES SAID he then began a
"lone and arduous task" of
tracking Bishop, Baldwin's finan-
cial activities and searching for
any hidden assets. There were a
number of rumors and leads, all
of which turned out to be false,
Ha es said.
Rewald's attorney, Robert
Smith, first told Hayes that most
of the investors would turn out
to be fictitious.
Hayes said be found out -that
all of the investors were real.
Hayes said he then was told
that there were secret assets
overseas invested by the CIA.
Rewald was let out of prison.
where he was beingheid on $10
million bail on state theft
charges, to go to the trustee's
office to show him where the
hidden assets were. But none
were found, Hayes said.
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Star-bulletin
Hayes then checked out
rumors that CIA money was fun.
neled into certain accounts - In-
eluding those of former CIA
field office chief Jack Klndscbi
and retired Air Force Gen. Ar.
nold Braswell - through Chase
-Manhattan Bank. Nut Hayes said
be found that the money put
into those accounts came from
y or through a:-
HAYES SAID eh did not check _
out rumors that Rewald was in-
volved a diit4y arms dal
with aiwan, deaplte seeing
? telexes between ltewald and two
consultants concerning the al-
leged dpcc~~. The overnm~ernt eon-
rOu Rewald fWms t u 6
deal would bathe generate~d! some
to minion in commissions to
pay off investors.
The only re assets Baldwin were ~thee Affi iccefurni-
ture and a few businesses that
were 4Dws, Hayes said.
Altho million had moved
through Rewald's bank accounts
during Bishop, Baldwin's heyday,
at the time Mayes took over the
main bank account was over-
drawn, he said.
Hayes said be has filed a claim
against the CIA but does not ex-
pect to collect ey
the agency. OtherInve aallssoo
have sued the CIA in an attempt
to regain their lost money.
REWALD CLAIMS the CIA set
up and ran his company and is
responsible for the investors'
money. He claims he lived a lav-
ish lifestyle for the CIA in order
to mingle with highly placed for-
eigners..
The CIA denies that but does
admit it used Rewald for "light
cover" for a few of ifs#Aents. It
claims it gave Reward only
$2,900 for telephone and telex
expensae.
will be mat-
temp'' anorasys they bs
tin eD at the CI ~ ta&w d Its
th
Involvement with Rewald. Feder-
al Public Defender Michael Le-
vine, his deputy Brian Tamanaha
and associate counsel Wayne
Parsons, will put on fewer than
30 witnesses.
Among them, however will be
former CIA Honolulu field office
chief Jack Rardin and former
CIA agent Charles Richardson.
Rardin took over the field of-
fice from Kindschi and vas the
last CIA official Rewald had con-
tact with. Rewald allowed the
CIA to use his company, CMI
Corp., as & ,cover for Richardson,
who operated out of the West
Coast.
RICHARDSON invested some
of his own money with Rewald
but withdrew it after the CIA
found out about the investment.
Richardson also induced other
CIA employees to invest with Re-
wald. They ended up losing their
money. Richardson was fired
from the agency after Bishop,
Baldwin's collapse.
Both Richardson and Rardin
will be "hostile witnesses" for
the defense, meaning they are
not cooperating in the defense
case.
Government attorneys gave no
reason why they called certain
CIA employees but not Richard-
son and Rardin.
One of the first witnesses for
the defense will be an official
from the National Football
League, who is expected to testi-
fy that Rewald had signed con-
tracts with three teams. Re.
wald's claims that be played
professional football have been
questioned by the government.
STAT
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