So's this...
To: Arcane Lore (223 )
From: Arcane Lore
Thursday, Oct 28 1999 9:44AM ET
Reply # of 224
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
injersey.com
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