Don't be so modest, Arcane: that's worth reposting in full:
To: Arcane Lore (211 )
From: Arcane Lore
Thursday, Oct 28 1999 9:27AM ET
Reply # of 224
The murders of two men, one of whom was Maier Lehmann (subject of an SEC enforcement
action regarding EOSC), were reported yesterday:
#reply-11728395
#reply-7414504 or sec.gov (final paragraph)
From today's NY Times:
October 28, 1999
Police Look Into Business Dealings of Slain Stock Promoters
By IVER PETERSON
OLTS NECK, N.J. -- The two partners in an Internet stock promotion operation who were
found shot to death on Tuesday inside a mansion here were linked to "shady" business
dealings and may have been killed to be silenced, the Monmouth County Prosecutor said
Wednesday.
One victim, Albert Alain Chalem, 41, who lived in the mansion in this wealthy suburb, had
worked for the brokerage A. S. Goldmen, which was indicted in July in New York on several
charges of stock manipulation and illegal trading; the firm has denied the charges.
The other victim, Maier Lehmann, 37, of Woodmere, N.Y., paid $630,000 in penalties and
refunds to investors last year to settle a regulatory complaint accusing him of fraud and
securities registration violations.
The case remains under criminal investigation by Federal prosecutors.
The two men, shot execution style, were found on the marble floor of the foyer of the $1.1
million home by two friends of Chalem's at 1 A.M. Tuesday. Lehmann apparently died of a
single shot, while Chalem was shot several times, suggesting that he had tried to get up
after being shot. Cell phones belonging to the two men were lying nearby, and are being
analyzed.
The house was otherwise undisturbed, and money has been dismissed as a direct motive.
"If someone swindles you out of money, what you want is your money back," John Kaye,
the County Prosecutor, said. "You don't murder them, because then you don't get your
money and you get caught.
So my operating belief is that there was something more here. It was probably related to
the victims' business activities, and the killer or killers feared something else more than the
loss of money."
Kaye called the two men's business practices "shady." They operated a Web site,
www.stockinvestor.com, that provided free stock quotes but also recommended that
investors buy certain small and obscure stocks, known as penny stocks. Just a little
buying or selling can cause big changes in such stocks' prices, which is why the number of
Web sites devoted to them has soared, despite warnings from securities regulators that
many of these sites are vehicles for stock fraud.
Aggressive penny stock promotions have been a chronic problem for regulators for more
than a decade, and have proliferated during the current stock market boom. But until the
last few years, these cases have rarely involved violence or threats of violence.
Investigators spent today hauling away vanloads of evidence from the mansion, including
paper files and computers.
The computer hard drives have been sent to the New Jersey State Police laboratories for
analysis and duplication, Kaye said, and Federal investigators, including officials from
securities law enforcement agencies, are helping to sift the financial records taken from the
house. No weapon was recovered, said Chief Kevin A. Sauter of the Colts Neck Police
Department.
Investigators appeared to be focusing on Chalem, if only because the slayings took place at
his home, although given his involvement in a case under criminal investigation, Lehman
may also have had knowledge that would have made someone want to silence him.
"We have lots of evidence and lots of leads and lots of suspects, because lots of people
didn't like these people," Kaye said. Securities and Exchange Commission records give
Lehmann's wife's name as Tamar, and a phone number for a Tammy Lehman is listed in
Woodmere, N.Y. The number was connected to a fax machine.
Chalem is listed in his most recent regulatory filing as living in East Hampton, N.Y., at 20
Cross Highway, but Chief Sauter said the broker had moved to Colts Neck in the spring.
The white brick mansion sits on about 10 acres on Blue Bell Lane, with a circular drive
surrounding a fountain. It was bought in the spring for $1.1 million by Russell Candela, of
Brooklyn, who is the father of Chalem's girlfriend, Kimberly Scarola, 39.
Ms. Scarola, who lived with Chalem, was in Florida when the shootings took place, the
prosecutor said, and returned to New Jersey today and was questioned.
"The house is in the father's name, whatever that means," Kaye said.
Kaye said the two men's Internet site was listed in Web registration documents as having
its headquarters in Panama City.
But the site's administrative contact was listed as Moos Gabor, with a Budapest telephone
number.
"They did stock promotion over the Internet and in mass mailings," Kaye said.
"A lot of these things involve stocks worth around $5 and a lot of them violate S.E.C. rules."
Stockinvestor's site Wednesday offered two stocks, apparently technology-related, that
sold for less than $10 a share.
Penny stock operations have proliferated in New York, New Jersey and Florida.
Kaye said investigators did not know of any illegal operations involving the Web site.
Chalem and Lehmann had been involved in the seamier side of the securities business,
according to regulatory records.
From 1994 through early 1996, Chalem worked for A. S. Goldmen, a now defunct brokerage
firm, according to records maintained by Federal and state securities regulators. Goldmen,
which specialized in selling tiny stocks to unsophisticated investors, has a long history of
regulatory and legal problems.
In July, the firm, which had offices in Iselin, N.J., as well as in Florida and New York, was
indicted along with its owners and more than two dozen brokers by a Manhattan grand jury.
Robert M. Morgenthau, the Manhattan District Attorney, said the firm and its employees
manipulated stocks, lied to investors, forged documents and made unauthorized trades;
lawyers for the firm have denied the charges.
Last spring, Lehmann, without admitting or denying the charges, agreed to settle a
separate complaint by the S.E.C. involving a company called Electro Optical Systems.
According to the commission, he was one of a large group of people who conspired to
inflate the price of the fledgling company's stock by promoting it on the Internet and by
issuing false press releases about it; investors lost about $10 million in the scheme,
according to the S.E.C.
Legal proceedings in the case have been put on hold because of a pending Federal criminal
investigation, S.E.C. officials said earlier this year.
nytimes.com.
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