Re: 10/28/99 - Both victims worked for discredited stock dealers
Both victims worked for discredited stock dealers
Published in the Asbury Park Press 10/28/99
By JASON METHOD
and JAMES W. PRADO ROBERTS
STAFF WRITERS
TWO STOCK promoters executed in an opulent Colts Neck house -- killed because of their financial dealings, according to authorities -- had complicated business histories that involved the hyping of obscure stocks over the Internet.
One victim, Maier Lehmann of Woodmere, N.Y., was a primary defendant in a penny-stock fraud case brought by the SEC last year that charged $12 million was defrauded from investors.
The other, Alain Chalem, was Lehmann's partner in the Internet business and was associated with an eclectic assortment of financial dealings in the last 10 years, including the defunct Woodbridge firm, A.S. Goldmen & Co., charged by New York authorities with bilking $100 million from unsuspecting clients.
They were killed in Chalem's marbled-floored house, where they ran a Web site promoting "highly speculative risks."
They operated the Internet company from the 3 Bluebell Road house where Chalem lived with his girlfriend. Prosecutor John Kaye said Lehmann, but not Chalem, was also involved with a similar Internet site: Futuresuperstock.com, implicated in the pending SEC fraud case.
Although both were involved in the stock market, neither were licensed to trade stocks for the public with the National Association of Securities Dealers, which regulates and licenses traders. The Web site said it does not trade stocks for the public.
The StockInvestor.com Internet site is registered to a post office in Panama and a site administrator in Budapest, Hungary. That administrator, Moos Gabor, was shocked yesterday when told about the murders.
"Jesus Christ! You must be joking. Oh my God," Gabor said, and quickly told someone else with him: "Maier Lehmann was murdered."
But Gabor declined to speak about his relationship with Lehmann, whom he met 10 months ago.
"I don't know about what about he did, what he did for the company. It was the first time anyone I knew was murdered," Gabor said.
After the SEC complaint was filed, Lehmann agreed to pay $630,000 in "disgorgement and penalties" in response to charges that he violated antifraud and registration laws, according to an SEC statement dated Jan. 21.
Lehmann was listed as a primary defendant in the case against Electro Optical System Corp., a penny-stock company traded over-the-counter. Its shares rose from 50 cents to over $5 in one day. The SEC said defendants in its lawsuit distributed false information about the company in news releases and over the Internet. Then defendants sold their holdings for a hefty profit, the SEC said.
According to wire services and an SEC release, Electro Optical was widely promoted on the Internet after proponents claimed the company had developed an electronic fingerprint-based security and identification system.
The SEC charged that the defendants made more than $12 million in illegal profits from investors.
According to court records, Lehmann deposited $500,000 in stock proceeds in an account for his wife, Tamar. Mrs. Lehmann later admitted under oath that she did not know she had received the stock or the proceeds.
But Lehmann's rabbi, Moshe Weinberger, of the 200-member Orthodox temple Congregation Aish Kodesh in upscale Woodmere, defended Lehmann.
"Maier Lehmann is a descendent of an illustrious family of rabbinical scholars from Germany who exemplified every noble trait and characteristic you would expect in a human being," Weinberger said. "He was soft spoken, kind hearted. On Sabbath, he would not discuss anything relating to business, we would talk about spiritu-al concepts, ideas from the Torah. He was completely devoted to his wife and his children."
A law enforcement source identi-fied one of the men who found the victims' bodies as Allen Lloyd Conkl-ing. In the SEC case, Conkling is identified as an employee whom Leh-mann hired to promote Electro Opti-cal.
Conkling could not be reached for comment yesterday.
Chalem's business history is traced back to 1980.
According to NASD records, Chal-em was associated with Spectrum Printing, Inc., address unavailable, from 1980 through 1989. For the next four years, he owned Heartbreak Hotel, a Catskills inn that Kaye said burned down in 1994.
In 1990 and 1991, he had business connections with the University of Miami, according to NASD records. He was then involved with Bay St. Contracting, address unavailable, and from January of 1994 through December 1995 he was with A.S. Goldmen & Co., Inc. the Woodbridge penny-stock firm accused in July of bilking investors, many of whom were elderly, out of almost $100 million.
Manhattan District Attorney Rob-ert Morgenthau charged in July that the company used unlicensed sales-men, high-pressure tactics and artifi-cial manipulation of stock prices.
Chalem applied in February 1994 for a license from the NASD to trade stocks but was denied, according to Karen M. O'Brien, general counsel for the North American Securities Ad-ministration Association.
"The question is, what position could he hold in the firm and still not hold a license?" she said.
Published on October 28, 1999
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