Federal Grand Jury Names Summit Resident in Tax Fraud
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Now incorporating New Providence-Berkeley Heights Dispatch ... Summit's only real newspaper VOLUME 102 NO. 14 October », 1986 Prices IS* Federal grand jury names Summit resident in tax fraud SUMMIT -- A federal grand primarily banks, thrifts and tions, Stuart A. Gottlieb of Far tained large losses and was effec- described in the indictment, a When the firm went bankrupt jury sitting in Newark returned a municipalities, lost more than Hills. tively insolvent. "repo" is essentialy similar to a in April 1985, the customers who 26 count indictment stemming $100 million. Greelish said that in addition BBS, located in Livingston, collateralized loan, but is cast in who had advanced funds on from the activities of the failed Named as a defendent in the to charging conspiracy, mail and engaged in trading and selling terms of a sale and repurchase of those "repos" found themselves brokerage firm of Bevill, Bresler& indictment is Summit resident wire fraud and filing false tax municipal and US Government US Government securities. It unable to recover either their Schulman, Inc., according Robert L. Bevill who was Chair- returns, the, indictment also securities, while its affiliated, but would allow banks and other Thomas W. Greelish, the United man of the Board of BBS. As charges Bevill, Schulman and unregulated firm, of Bevill, money or their securities from Bresler and Schulman Asset financial institutions to invest AMC and filed suit civilly. States Attorney for New Jersey. named as defendents were Gilbert Rooney with deliberately con- their surplus funds in, US Govern- The indictment charges the five C. Schulman of Montague, Presi- spiring to and actually entering Management Corporation engag- According to Greelish, the in- false statements on periodic fil- ed in transactions known as ment obligations according to dictment alleges that Bevill, former members of the firm, dent of BBS, and John D. regulations. which primarily sold securities to Rooney of Verona, the Treasurer ings required by the Securities repurchase, and reverse repur- Schulman, Rooney and Levine the US .Government and its agen- and Comptroller. and Exchange Commission and chase, agreements, also termed Greelish said the indictment siphoned off over $15 million for cies, of planning and then carry- Named as co-conspirators, but the National Association of "repos" and "reverse repos." charges that, as early as 1982, the their own personal benefit from not indicted, were Executive Securities Dealers in order to con- Since the Asset Management defendents began to systematical- the "repo" funds fraudulently ing out a complex securities fraud obtained by AMC by awarding extending over a three year Vice-President, Robert S. Levine ceal from customers, the SEC, Corporation was not subject by ly defraud their numerous of Jackson; and senior Vice NASD and the Federal Reserve law to the regulations of the SEC customers who engaged .in themselves salaries, fees, loans, period, from 1982 to April 4, bonuses and disguised corporate 1985. Customers of the firm, President and Director of Opera- Bank, the fact that BBS had sus- and NASD, it was through AMC "repos" with AMC by selling that the defendents were able to them non-existent securities or payments. operate their fraudulent "repo" securities which were actually The indictment alleges that scheme. owned by another party. Bevill used some of these The indictment charges that The indictment alleges that, in fraudulent funds to purchase an beginning in 1982, Bevill, many instances, the defendents approximately 323-acre farm in Schulman and Rooney began ex- fraudulently removed, securities Hainesville and construct a barn tensive speculation in US from safekeeping even though and other outbuildings on the Treasury bond futures and other they had been sold to one "repo" property. high-risk investments. customer and were supposedly The charges in the indictment The extent of their trading being held for that customer's include five counts of income tax violated SEC regulations, and benefit, and simply sold the same fraud, conspiracy to file false because of losses in the tens of securities again to another returns and four counts of actual- millions of dollars, it threatened customer without authorization. ly filing such returns. the soundness of BBS and other In other instances, the indict- "It took a painsaking and in- affiliated companies. By April, ment continues, the defendents tensive investigation on our part 1985, the liabilities of BBS and its sold securities to "repo" to unravel the complex financial companies exceeded their assets customers and assured them that dealings of these defendents and by more than $100 million. they were being held in safekeep- subsequently uncover one of the Despite the massive insolvency ing when, in reality, AMC did most sophisticated instances of of all of the BBS companies, not possess the securities it had tax fraud in New Jersey," Bevill, Schulman, Rooney and supposedly sold. observed Robert G. Roche, Chief Levine, paid themselves over $15 The indictment charged that of the IRS Criminal Investigation million during the period in through these methods, the Division in Newark. "By engag- salerfes, bonuses, fees, loans, and defendents were able to obtain ing in such actions, these in- disguised corporate payments, from customers many milions of dividuals displayed utter con- according to the charges of the dollars more than they could tempt for the vast majority of indictment. have obtained by using the Americans who voluntarily ac- cept their tax burden." , In order to cover their losses securities they actually qwned. while still draining millions of As a result, these customers, The 18 monthe investigation dollars from their companies, the believing themselves to be fully was headed by assitant US At- indictment charges that the three collateralized, were in fact totally torneys .Paul Weissman and defendents engaged in systematic without any collateral for the Robert Weir who presented the securities fraud. funds they had advanced to case to the grand jury. v. Greelish explained that the AMC. According to the indict- Greelish said that the US At- fraudulent securities dealing ment, the total amount of AMC's torney's office is continuing to SIMULATED EMERGENCY DRILL — at Ciba-Geigy tests the effectiveness of the city and the pharmaceutical ca revolved around certain repur- fraudulent uncollateralized investigate a number of other in dealing with o disaster situation. Academy Award-caliber "victims" received expert medical care. chase agreements, or "repos," "repos" exceeded $100 million allegations of fraud uncovered by that were transacted by AMC. As by 1985. the callapse of BBS and AMC. 'Mock' fire drill is a real success By MARY ELIZABETH DUFFY drills and table top discussions Public Relations Director Dean In addition to Ciba-Geigy's with local agencies. Hogan said that the building had own fire department and first aid Two years ago, the Ciba-Geigy become "out-dated" and was no SUMMIT - The surprise fire department helped the Sum- Next May, the Summit facility simulated emergency drill at mit Fire Department in quen- longer needed after the con- will celebrate its 50th anniver- Ciba-Geigy on Wednesday morn- ching the railroad fire. struction of three new buildings sary. ing proved to be a real success of The River Road facility is the on the premises. She added that Public Relations Director Dean the effectiveness of both the pharmacuetical division head- any more expansion at the River Hogan said that close neighbors pharmaceutical plant's and the Road location is "down the road were notified of the drill before quarters of Ciba-Geigy. The cor- a piece." city's ability to handle a disaster porate headquarters is located in hand. situation at the facility. New York state. Nearly 2,200 The victims were treated accor- squad, the simualated emergency The fire alarm clanged at 9:25 employees work at the 40 ding to the triage method by the was brought under control by the am for employees to evacuate the first aid squad on the premises. Summit Fire and Police Depart- building facility which covers 100 The worst casualty was hooked buildings and meet in the center acres. ments, the cit's volunteer first aid driveway. up to a moniter. squad and the Red Cross. Five minutes later, an an- nouncement was made that they Smoke bombs were set off could return to work. around a vacant laboratory JANET WHITMAN, Republican Freeholder Candidate, admiring the landscaping at Due to the beautifully sunny which is slated for demolition. Schools plan for election day me Senior Citizens' Housing Project completed using a Union County Community autumn day, many employees Summit firefighters aimed their Development Grant which allocated $100,000 to be matched by private funds. were disgruntled about returning hoses at the building while "vic- Whitman achieved this goal by chairing the Summit Way Campaign, a project of inside after what turned out to be tims" were carried out on stret- he Summit Area Development Corporation. She stresses that this accomplish- such a pleasant diversion. One chers. One victim, whose arms open houses nent is an excellent example of public and private sectors uniting in culminative employee groaned, "That's no dangled over the side of the stret- success. fun!" when she was told to go cher, was convincingly covered SUMMIT — Tours, bake sales will be held after school for back to work. with fake blood an soot. and book fairs head the list of ac- children only. The drill was conducted mainly The most dramatic moment tivities being scheduled in the At Jefferson School, officers Reserve a ride to the polls now in the event of a fire disaster. The was when a Summit fireman public schools when they open of the Student Council will give last large-scale simulation was climbed a ladder to the roof of their doors to voters on Election tours of the building to interested AREA — Need transportation corner of Euclid and Summit conducted three years ago.