Re: 10/30/99 - A tangle of leads in murder
A tangle of leads in murder probe
Published in the Asbury Park Press
By AMY ZURZOLA, PAUL D'AMBROSIO,
JASON METHOD and JAMES W.PRADO ROBERTS
STAFF WRITERS
IF, AS authorities suspect, a disgruntled investor or business associate may be to blame for the shootings of two stock promoters in a Colts Neck manor Monday night, there's a trail of shady business deals for them to follow.
Albert Alain Chalem and a dog, "Spikey," in undated photo. Chalem and a business partner were slain Monday night in a Colts Neck mansion.
A look at government records, court files and interviews with some who knew slaying victims Maier Lehmann, 37, and Alain Chalem, 41, paints a portrait of the two that isn't as flattering as their eulogists' recollections at funerals yesterday and Thursday.
Sometime in the mid-1990s, Lehmann began contacting G. Alexander Novak, a lawyer who had represented his wife's family. His questions to the Manhattan securities lawyer revolved around "various kinds of fund-raising and stock promotion" and "what he could do on a Web page and what he could not do," Novak said.
Lehmann was particularly interested, Novak said, in how stocks could be legally promoted on the Internet and the two discussed how financing could be arranged for a company to produce an electronic fingerprint identification system -- financing that ultimately led to charges that the company's stock price was illegally manipulated to rob investors of $12 million. Lehmann paid the government $630,000 to settle his part of the case, but a criminal investigation was also launched.
Not representing Lehmann, Novak said he did not know if Lehmann was cooperating with the Securities and Exchange Commission in the Electro Optical Systems Inc. case. But the lawyer said he did know that federal grand jury subpoenas had been issued. Novak did not know whether Lehman had been called to testify.
"He was a very clever guy, very personable, successful. He knows a lot of people," said Novak. "Unfortunately he knows a few too many people. Kind of a self-taught financier."
In 1993, Lehmann was facing jail time for defrauding his insurance company out of more than $1 million in two faked robberies of his Not Just Videos electronics store. Instead, Lehmann, who left a wife and five children, took the safe route.
Lehmann pleaded guilty to bilking General Accident Insurance Co. in January 1994, according to the United States Postal Inspection Service, and decided to cooperate with the FBI and the Internal Revenue Service. He did such a good job that the assistant U.S. attorney in Brooklyn who prosecuted the case "orally extolled Lehmann's cooperation to the sentencing judge," said his lawyer in that case, Richard F. Horowitz.
In return, Lehmann was sentenced to house arrest and avoided jail, Horowitz said.
"He made a mistake. He made a serious mistake and I thought he was sincere in recognizing in that he made a mistake and was contrite about it," Horowitz said.
The investigation Lehmann helped, led by a federal task force assigned to ferret out insurance scams, netted at least 120 convictions, uncovered more than $120 million in fraudulent claims, and impacted almost every insurance company operating in New York, New Jersey and Connecticut, said Zachary Carter, the U.S. attorney in Brooklyn.
But contrary to some reports, a source close to the investigation said yesterday neither victim was currently acting as an informant for the FBI, which investigates all criminal matters, including securities fraud.
Boosting stock price
In a subsequent case, a stock trader in a Tinton Falls brokerage played a key role in an alleged $12 million penny stock scam last year that also involved Lehmann.
Cosimo Tacopino, who has faced federal action in three other cases since 1969, helped to open several accounts for defendants in order to transfer shares of Electro Optical Systems Corp., according to federal court papers.
Lehmann was a primary defendant in a still-pending civil case brought against Electro Optical by the federal Securities and Exchange Commission.
Tacopino works for Donald & Co. Securities, based on Shrewsbury Avenue in Tinton Falls, an investment house that federal authorities said helped artificially inflate Electro Optical's stock. After a small Massachusetts company merged with a so-called shell corporation to form Electro Optical, another defendant, Thomas Edward Cavanagh, bought 500 Electro shares from Donald & Co. at $7 a share, far above the going price of 50 cents.
SEC officials said the trade artificially inflated the price in order to attract other speculators who later lost virtually all of their investment. While the price remained artificially high, insiders like Lehmann sold their shares for a hefty profit, the SEC alleged.
In addition to that trade, the SEC charged that at Cavanagh's request, Tacopino opened accounts for three companies based in Spain. Those accounts were used to sell Electro stocks and transfer shares to Lehmann and other insiders.
Tacopino denied charges in a brief filed in U.S. District Court. Donald & Co. was released from the Electro case after agreeing to pay back all profits and commissions from sale of the stock. Tacopino's secretary said yesterday said he would not discuss the case.
The bullet-riddled bodies of Lehmann and Chalem were found at 1 a.m. Tuesday, touching off an investigation that is drawing attention to the murky, still-evolving business world of Internet stock peddling.
Lehman, Chalem and an unidentified third man were partners in a Web site, www.stockinvestor.com, registered in Panama and managed in Budapest, Hungary. Using the high speed of electronic mail, the two talked up certain low-priced stocks to potential investors. Once buyers bit, the two sold their own shares for a profit.
Despite foreign registration, the Web site was not totally insulated from SEC regulations. In general, if a company operates in the United States and sells stock to investors here, it is subject to SEC regulations, said David Levine, a senior adviser to the director of enforcement for the agency.
Also yesterday, Stuart Bockler, the principal owner of the International Market Advisors, Inc., of Marlboro, accused Lehmann and Chalem of using his copyrighted business analyses on its Web site and sending it out on bulk e-mailings without his permission.
Bockler's lawyers are preparing a cease and desist order against the Web site operators to either take the Web site down, or delete his analyses, he said.
But, Bockler said, "We don't know who are the survivors of the company."
While Bockler said that he learned following the deaths of the Lehmann and Chalem that his recommendation is posted on the Web site, he had learned earlier this year that an analysis of his had been mailed out, but he was unable to trace the source. And on Oct. 12 or 13, he learned that StockInvestor.com was mailing out his reports without his permission. Bockler's reports are available online for a fee.
"They seem to have built a business built on plagiarism of legitimate reports," Bockler said.
Chalem operated a printing business in Clifton called Spectrum Ink, later known as Pinnacle Techology Inc., or Pi-Tech. The business went bankrupt in 1988, but continued to operate for another five years after Chalem declared bankruptcy.
A fire scorched the building on July 7, 1992, and the investigation that followed resulted in charges against the company for illegal hazardous waste dumping. The company was was found guilty in Clifton municipal court, according to Clifton health officer Albert Grecco.
20 detectives on case
Monmouth County Prosecutor John Kaye, whose Freehold office has been deluged with reporters' calls from the Wall Street Journal to the National Enquirer, said yesterday he would make no more detailed statement on the case for the time being.
"We've got 20 detectives working on this," he said.
Outside the white-brick mansion at 3 Bluebell Road, Colts Neck, yesterday, yellow crime scene tape was still clinging to the black iron gates, and a cluster of investigators' vehicles stood at the top of the sloping driveway.
An organized crime link has been suggested, given the gangland style of the shootings, but a source close to the case told the Asbury Park Press yesterday there is yet no solid proof the murders were a contract hit.
Should such a connection emerge, the FBI would likely take over the investigation. Its agents have joined the probe and are providing technical assistance, the prosecutor's office remains in charge.
Amy Zurzola: (732) 922-6000, Ext. 4624, or at azurzola@app.com.
Staff writers Bill Conroy, Peter Eichenbaum, Juliet Greer and Joseph Sapia contributed to this report.
from the Asbury Park Press
Published on October 30, 1999
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