Re: 10/30/99 - Slain brokers said to be government informants
Slain brokers said to be government informants
Published in the Home News Tribune
THE ASSOCIATED PRESS
COLTS NECK -- Two Internet penny stock promoters who were shot to death execution-style in a mansion had been government informants in fraud cases, associates said yesterday.
Maier Lehmann provided authorities with information in a 1992 federal insurance fraud case in which he and more than 100 others were charged, his lawyer, Richard Horowitz, said yesterday.
Horowitz said Lehmann was so helpful that the assistant U.S. attorney prosecuting the case wrote a letter to the sentencing judge "extolling his cooperation."
The lawyer said yesterday he does not know whether Lehmann acted as an informant in any other cases.
Alain Chalem, the other victim, tried to help investigators uncover illicit dealings in the penny stock industry, a former acquaintance told The Associated Press yesterday.
"Alain was a government informant," said the acquaintance, who spoke on the condition that he not be identified. "They (the government) can deny it all they want, but he was."
One case involved an alleged scam involving a small drug making company which ultimately could not be proved to be fraudulent, the associate said.
Monmouth County authorities said they are considering a possible organized-crime link to the killings. They also are examining whether the attack was simply the work of a disgruntled investor with ties to the victims' Internet promotions.
Neither county Prosecutor John Kaye nor First Assistant Prosecutor Alton D. Kenney would discuss the case yesterday, and John Heine, a spokesman for the U.S. Securities and Exchange Commission, would not say whether Chalem or Lehmann worked as informants for the SEC.
A call to the U.S. Attorney's Office for the Southern District of New York was not immediately returned.
In the 1992 insurance case, partners in a New York appliance store called Not Just Videos faked two burglaries in an effort to collect insurance claims on more than $1 million in merchandise which the owners, who included Lehmann, reported stolen in the sham break-ins.
Lehmann pleaded guilty to mail fraud in the case, and was sentenced to house arrest after helping prosecutors.
Chalem and Lehmann have been linked to similar investigations. Regulatory records show that Chalem is a former employee of the brokerage A.S. Goldman & Company, which is under indictment on racketeering, securities fraud and forgery charges. That investigation is continuing.
Lehmann was among the defendants last year in a Securities and Exchange Commission case involving the manipulation of Electro-Optical Systems Corp. stock through the distribution of false information about the company.
The stock rose from 50 cents per share to more than $5 per share in one day. For his part, Lehmann agreed in January to pay $630,000 in penalties, without admitting or denying wrongdoing. The case is continuing against others accused of scheming to manipulate the stock price.
Chalem, 41, and Lehmann, 37, were not registered stock brokers. They promoted certain stocks on their Web site, which is registered in Panama City and operated by an administrator in Budapest.
They were found shot to death Monday night.
¸ copyright 1999 The Associated Press <http://www.injersey.com/apnotice/index.html>
October 30, 1999
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