Barron's article on Lehmann and First Jersey participants.
From a post by Auric Goldfinger, and of course thanks to you Arcane, this should be here as it is another whole list of names. (What a sub-culture these guys travelled in.)
From Auric's post:
Very nice, TRAV, confirms what I been sayin' for years:"Dead Men Do Talk What a murder victim told Barron's about skulduggery on Wall Street
The article:
By Bill Alpert
The recent murders of two stock promoters at a mansion in Colts Neck, New Jersey, struck a serious chord at several publications, including Barron's, because one of the victims, Maier S. Lehmann, had been trying for nearly two years to get journalists to publicize his account of wrongdoing on Wall Street. Whether his campaign had anything to do with his murder, we don't know. But we can relay the portions of his account that we have been able to check out.
Lehmann's main goal seemed to be to interest prosecutors and reporters in the financial dealings of one of his former business associates, Judah L. Wernick of Woodmere, New York. In September, Wernick, 36, was indicted by federal prosecutors in Manhattan in a racketeering and stock fraud case that involved the notorious stock promoter Randolph K. Pace. Both dispute the charges. In August, the National Association of Securities Dealers censured and fined Wernick, who consented (without admitting or denying guilt) to findings that his brokerage firm, Patterson Travis, improperly underwrote stocks and failed to act on customers' trading instructions.
It was late 1997 when Lehmann came to Barron's with his detailed allegations about Wernick. Lehmann felt that he
was owed money by Wernick, and admitted that grudge upfront. What Lehmann told Barron's, and any regulator who would listen, was that Wernick was the latest in a long line of
front-men for the legendary stock swindler Robert E. Brennan. Wernick denies this, but evidence shows that Wernick and Brennan have worked together in the past and that many of Brennan's former associates have been involved in questionable deals with Wernick.
Brennan, you may recall, burst onto the national stage in the 1980s with TV commercials that showed him stepping from his helicopter and inviting would-be clients to "come grow with us." But Brennan's brokerage, First Jersey Securities, was later found to be a "massive and continuing fraud" on small investors, according to the federal judge who upheld a $75 million SEC judgment against Brennan.
Contacted last week, Wernick said he hadn't spoken to Lehmann in four years. Although he said he knew nothing about the murders beyond what he had seen in news reports, Wernick went on to speculate that the murders could have been some sort of retaliation motivated by Lehmann's activities in the four years since the two parted company.
Lehmann, who was 37 when he died, did have a criminal record. He pled guilty in 1995 to filing false insurance claims, and helped federal prosecutors bust others involved in that scam. Then, earlier this year, Lehmann agreed to pay $630,000 to settle Securities & Exchange Commission civil charges that he and nearly 30 others deceptively promoted shares of Electro Optical Systems.
Lehmann often seemed to be in the know about unusual happenings related to small stocks. Last December, for example, he told Barron's that two convicted Russian racketeers were threatening investors they suspected were
shorting a stock associated with Ivana Trump (The Ivana Channel, Part II, December 14, 1998).
The other Colts Neck murder victim, Alain A. Chalem, age 41, has never been charged with any wrongdoing, though he did work at A.S. Goldmen & Co., a brokerage firm the Manhattan District Attorney indicted in July, along with many of its brokers, for allegedly bilking investors out of more than $100 million. Goldmen officials deny the charges, and their lawyer said in court that the firm was forced to cut a deal with the mob to stay in business. Prosecutors decline to say whether Chalem or Lehmann helped them build the case against Goldmen. In any event, the fact that the two promoters had crossed paths with mob figures can only add to the list of possible suspects in the murder case.
In what appeared to be a cold-blooded execution, Chalem took one bullet in the chest and five in the head, while Lehmann took one in the leg and three in the head. At the time of their demise, Chalem and Lehman were running an Internet stock-promotion scheme out of the Colts Neck mansion.
As for Wernick, his first known contact with Brennan came around 1990. At the time, Wernick was a rookie stockbroker living in a Queens co-op apartment, but he wanted to be an investment banker. Toward that end, he found a Texas sawmill that needed cash and introduced the mill's owners to an associate of Brennan. In the name of raising capital, Brennan's man merged the sawmill into a shell company called Nacoma Consolidated. When the stock subsequently surged skyward, Brennan sold $29 million of the Nacoma shares he controlled, according to a civil racketeering suit filed by New Jersey's attorney general.
In a related deal, involving a stock called Future Funding Corp., New Jersey regulators say Brennan improperly pocketed $70 million in profits, thanks largely to trades executed by Wernick. For some of the Future Funding trades, Wernick took the unusual step of using his wife's maiden name, calling himself Judah Pion. Wernick was not named as a defendant for his part in either the Nacoma or Future Funding deals, but the state's pleadings detail his prominent role in the scams. Wernick told Barron's that the trades in question were executed by his firm and not by him. Brennan recently settled the attorney general's charges on these matters by agreeing to pay $45 million without admitting wrongdoing.
In an interview with Barron's, Wernick insisted that he has had nothing to do with Brennan since 1991. Lehmann said otherwise. What there can be no question about is that Wernick continued to run with other members of Brennan's crowd. According to an SEC civil suit still pending in Manhattan federal court, Wernick in 1994 was working at a firm called S.B. Cantor & Co., and while there he rigged stock trades in cahoots with Leonard Greer, who ran the brokerage L.C. Wegard. In their pretrial depositions, Wernick and Greer denied any wrongdoing. Here's the Brennan connection: New Jersey regulators charged that Greer financed Wegard with $12.5 million in loans from Brennan's charitable foundations.
The SEC eventually shuttered Wegard, and federal prosecutors in New Jersey indicted many Wegard brokers. Greer was not indicted.
In 1994, Wernick moved to Patterson Travis, a then-moribund firm owned by David Travis, a Colorado man who was recovering from a heart-bypass operation. In a Manhattan skyscraper, Wernick set up a branch office for the firm. On paper, the operation was run by Travis, and the firm's prospectuses modestly describe Wernick as "office manager." But Lehmann alleged that Wernick ran the firm, and documents, customers and employees corroborate this claim.
Many of the brokers working under Wernick at Patterson Travis were Brennan alumni. Wernick's sales manager, for example, was Richard Laus, the ex-brother-in-law of Brennan, who had run sales at the outlaw firm Hibbard Brown. Wernick's operations officer was Marshall S. Maddox, formerly the finance chief at L.C. Wegard.
When investment banking clients needed an auditor, Wernick sent them to Brennan's accountant, Dennis M. Gaito, who was indicted in September of this year by the U.S. Attorney for the Eastern District of New York. Just a few weeks ago, according to an FBI affidavit unsealed with Gaito's indictment, a hidden
camera videotaped Gaito telling a stock swindler how to hide fraud proceeds in Singapore and Monte Carlo. The alleged
scheme resembles one that bankruptcy examiners say Gaito devised in the early 1990s to put some $25 million of Brennan's money beyond the reach of U.S. courts. Wernick says he recommended Gaito to clients because Gaito was an expert in working with shell companies. Wernick added that he hasn't dealt with Gaito in four years.
Lehmann went to work for Wernick at Patterson Travis. Lehmann and his wife, Tamar, lived in Woodmere, New York, where they were friends and neighbors of Wernick and Wernick's wife, Jan. Many mornings, the two drove in together to the Patterson Travis office in a sleek tower on Manhattan's Battery Park.
Wernick insisted to Barron's that Travis runs Patterson Travis, and that the Brennan alumni were "great" employees who just needed a break. "If you're down and out," said Wernick, "I'm your best friend. No matter if you're Jewish, black, white, green, yellow. I'm your friend."
Wernick was incredulous at any suggestion that he was a front man for Brennan. "I have no relationship with him today," said Wernick. When we asked Brennan if Wernick and Patterson Travis were fronting for him, he said, "That is preposterous and absurd."
In talking to Barron's, Lehmann contended that Wernick's first underwriting at Patterson Travis, for a Florida-based direct-marketing firm called ML Direct, was a scam. That charge is supported by other Wernick employees and by the U.S. Attorney for the Southern District of New York, who indicted Wernick in September for conspiracy and stock fraud. Prosecutors charge that the ML Direct underwriting was arranged by Randy Pace, whose Rooney Pace firm was barred from the securities business by the SEC in the 1980s. At Pace's 27th-floor suite on Lexington Avenue in Manhattan, the indictment says, Wernick joined a secret conspiracy that enabled the Pace gang to dump $24 million of worthless stock on the public. Like Pace, Wernick has pled not guilty.
At Patterson Travis, Wernick did two deals with Colin Halpern, another Brennan associate. In 1994 Halpern merged the Domino's Pizza franchise for Ireland and Britain into a shell controlled by Wernick. This publicly held shell, called Crescent Capital, was one of the Brennan-controlled stocks under SEC investigation in the early 1990s when it came into Wernick's hands. Wernick said Brennan sold his holdings in Crescent by the time Halpern came along.
The second stock offer Wernick underwrote for Halpern, in 1995, involved a firm called Red Hot Concepts, which owned a Chili's restaurant franchise. This outfit was at the heart of fraud charges brought in 1997 by the New Jersey Bureau of Securities against a group of former Brennan associates who were working at the New York-based brokerage firm Americorp Securities, which is now defunct. The administrative complaint says that the Americorp brokers bid up Red Hot shares and then foisted them on the public at inflated prices. The beneficiaries included offshore customers at Patterson Travis with addresses in the well-known money-laundering haunts of Mauritius and the Isle of Man.
It's impossible for us to say if Lehmann's campaign to expose skulduggery on Wall Street was in any way connected with his violent death. But federal investigators are taking a look, as are New Jersey prosecutors assigned to the murder case."
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