Released under the John F. Kennedy Assassination Records collection Act of 1992? (44 USC 2107 Hofey pate: 11-14-2017 q . ps cw . Cy , { 5 a or “0 + all ~ . : . . - “NM . UNITED STATES DEPARTMENT OF JUSTICE ut FEDERAL BUREAU OF INVESTIGATION Copy to: Depts Attorney WILLIAM FRENCH, c/o USA, Detroit Report of: = »§« SA WERNON -G, WALTERS (A) _.) Office: Detroit, Michigan Date: August 23, 1 1962 © : me Fie Nomber 2901432, | Bureau: 29-31889 Title: JAMES RIDDLE HOFFA: DOWINICK EDWARD BARTONE; — LOUIS "BABE TRISCARO; SACK PRESSER; HERMAN PRESSER; * ALVIN. A. NAIMAN; ‘ELIOT JANBWAY 5 JOSEPH F, VERHELLE ; ROBERT £2 ..MC CARTEY, JR. Character: _ FEDERAL: ‘RESERVE ACT: INTERSTATE PRANSPORTAT ION oF. STOLEN ~~ PROPERTY; MALL FRAUD; FRAUD BY WIRE 5. CONSPIRACY . , Synopsis: Criminal. Division requested investigation segarding alleged ire  vegularities and possible conspiracy. im connection with loans. _ totaling $730;000 from Public Bank, Detroit, to The. Alvin Naiman ' Corp. , Niagara Crushed Stone (Humberstone) Ltd. (NCS) , and. Vendorama of Ohio, Inc. LFDIC Examiner concluded there were mis- ‘applications and deceptive entries in connection . whe h these loans, . Since: they were made to (or for the benefit of) firms which were — : reportedly. insolvent and. devoid of. earnings, collateral was of, - questionable walue, and loam proceeds were improperly: diverted.« _Loans were made by public Bank after. ALVIN A, NAIMAN had ‘insuc- os cessfully attempted to obtain loan from Teamsters Central. States Pension Fund, to: relieve financial problems arising from trans= ' actions: of Akros Dynamics Corp. and/or operation of NCS. JAMES. - RIDDLE: HOFFA and LOUIS "BABE’ TRISCARO, Teamsters o officiais, Pe= portedly were “interested im NAIMAN'’s. obtaining ‘fimancing. “ROBERT “BE, MC. CARTHY, .JR., Assistant Vice President, and. JOSEPH F, . . VERHELLE, President , Public Bank,. were. contacted concerning - ans, allegedly at suggestion of HOFFA. DOMINICK EDWARD BARTONE,  pre= viously involved in s lus aireraft deal of Akros Dynamics Corp., , acquired interest in CB with funds from. Servicios. Internacionales,. » S$ A., of Panama (owned by BARTONE) and became. general maimager of NCS about same time as first loan made by Publica Bawk im-1959, ~ NCS was placed in bankruptcy in Ontario, Canada, im 1961. Public Bank received notes. totaling $800,000 from successor. company ,- Port Colborne Quarries Ltd. ,..but full payment. considered’ doubtful - by FDIC examiner. . VE LE wesigned as President of Public. Bank in ‘1962, under pressure . Background information set ‘out regarding © companies and individuals allegedly involved ‘in. this’ ‘matter. = Po ALL INFORMATION CONTAINED © HEREIN IS U C IFIED DAT. BY. This ‘document contains neither recommendations nor conclusions of any kind. It is the property of the FBI, and is a Joan fo your dy 5 . it and/or its contents are not to be distributed outside your agency. 16—74625-1 ~ Docld: 32305185 Page 5
' Released under the John F. Kennedy -, DATE: 11-14-2017 _ , . vas . | Ad DE 29-1432 VGWskam = 1 This 2 dated July 31, J. MILLER, JR.; of Public Insurance Corpor ation that because of the p - . - FDIC Examiner; in this Gase pews badin Bank in 1959 and 1960, ‘letter dated May 3, United States Attorne the flow of funds from © ihe i and that. information be devele involving the Subjects dn ths he in the lettor ds The state bank Deposit Inswrance Federal Be 19373 insured March 24, certain arent which Pr other persons wer of funds, Taise Docld: 323051385 Page 6 yestigat Lom 1962, to the Direct. AsSiatant Attorney ¢ Division, which enclosed certain results of 93 Sak, Detroit, specific violations and irregularities. ossibility of a conspiracy, requested that the FBI inwesti FRENCH and J. PAUL ALLRED were Attorneys who are familiar with this matter. On August 6, held at. Detroit with Mr. and arrangenents material im Mr. FRENCH’s off indicated that the alleged following is ted May 3 Public Bank, Detroit, Mich: insured under | IVS SY SC Silt. was authorized 1957; has FDIC Certificats While LINDSEY was particip of PB as of the close of buss ident JOSEPH F, Vice-President ROBERT E, McCARTHY, Apparent’ in reBt galaritie Hssassination Records collection Act of 1997 (44 USC TioT Hote). LS 4 upon a letter from HERBERT Criminal gminat Lon ral Deposit. together with allegations of The letter indicated it was wate this matter. WILLIAM P, named as Griminal Division “FB: 7 aneral, Michigan, by the Fe (FDIC) 1962, a preliminary discussion was . PRENCH and THOMAS E., LINDSEY, te were made te begin reviewing | e at Detroit. . Mir. FRENCH egularities to be considered ries of loans made by Public are eribed in detail ima - WAS E, LINDSEY to the Me. FRENCH requested that & be traced us far as possible ped as to a ble conspiracy CABE. bie a Be oe =) dk aim & SURMALy . and conclusions 1962, from i LINDSEY: (PB) 3 of the "Federal of the . 18, 19, tae prov iste PB is not a me .PB was charte to Cammence DUS Ines 2 Number 17848 Act. LOSS ° ting im am examination - &s December 26, 1961, S were disclosed for VERBELLE, Assistant SR. and possibly @ believed to be responsible. °¢ ‘un he nature of misapplications > entries and statements, irregular it co es and dece
Released under the John F. Kennedy Assassination Records Collection Act of 1992 (44 USC Bi0T Hote. °, DATE: 11-14-2017 ' DE 29-1433 VGW: kam - 2 aiding and abetting, ete., were specifically commented - ith in ¢ connection with the below-mentioned loans made at the Michigan-Shelby Office of PB. i. Unsecured loan to Yendorama of Ohio, 3 Ine = $50, OG 1G esa a pense sass On October 3, 1960, PB extended a $50, G00 credit to Vendorama of Ohio, Ime. (VOI) as evidence Sy unsecured n note nimber T7OL of VOL for $50,006, dated October 3, 1960, due November 3%, 1960, executed by H.A. PRESSER, Presidest, and JACKE PRESSER, Secretary Treasurer. ha 3 loan was Appz oved. by PB President -VERHELLE and was fully by VERBELLE on November 4, 1966, due Dace ene 1S€O; and renewed again on March 10, I9GL, | , cumbers 8184 and 10074, respectively, the last mote t due om demand. The loan was finally paid by $30, OOO on July 24, 1961 and $20,000 plus acer: imterest of $441.66 on July 427, 1961. ° Although WOr wea H.A. and JACKE PRES Of WILLIAN PRESSER allegedly is the 2 reported to be ¢ President, Joint Brotherhood of F the International her hoc gmaters Pens Fund. / . . * eho SER, they Fe : nominees » to whom they are related and who Rel x. WLLIAM PRESSER is Conference of Teamsters; tional the gowrse of the above-mentioned $30,000 payment was a demand loan number 12322 by PB to Dojay of Ohio, inc., for $60,000 dated July 21, 1980, executed by ELLIOT JANEWAY and perso ly e osed by him. This loan was approved by Presi ERHELLE amd only $1,500 had been paid om this loan at the time of the s FDIC examination. The aboye $30, GOO payment on the al VOI loan w effected by a debit memorandum ‘charge _ against .t checking account in PB of Dofjay of Ohio, inc. This charge was executed by ROBERT A, . DORST ,* Assistant Cashier-Note Teller, MichiganeShelby Office of PE. The $20, 006 principal payment and interest Ss & Docld: 32305185 Page fF
' Released under.the John F. Kennedy Kssassination Records Collection Act of 199? (44 USC 27107 Hotes. ": DATE: 11-14-2017 a \/ ; . —_— 5 DE 29-1432 VGW: kam ~ 3 payment of $441.66 were represented by a check for the total of these amounts, maker presently unknown, the check being ¢rawn on or cleared through the Manufacturers Nations] Bank, Detroit, . VOI reportedly was engaged in vending machine operations in Cleveland, Ohio, and vicinity, du iring the May 8, 1961, FDIC exa mination of PB, the Examiner in Charge, WILLIAM D, ALLEN, reportedly was falsely informed . . by President VERHELLE that the businesses of VOI was . that of. extending eredit to Niagara Crushed Stone. (Humber - stone). Limited of Port Colborne , Ontario, Canada. On August 26, 1961, there was. filed a report of ° dissolution and sale of VOI to Industrial Vending Company, GEORGE GOLDEN, President, 7505 Carmegie, Cieveland. The proceeds of the $30,000 loam by PB to VOI were disbursed on Octobsr 3, “19607 as follows: $2,862.77 Applied d as partial payment on , mote number 2556 of The Alvin No imam ,. Corpor ration, Cleveland, Ohio (ANC) to PB iN . ’ . $2,862.77 Applied as partial payment on mote number 3557 ot Niagara Crushed Stone (Sumberstone) Limited (NCS) te PB . $26 , 540.31 Credited to cash collateral account “in PB for the benefit of NCS $12,008 .69 ' Wire transfer by PB through Imperial Bank of Canada,. Windsor, Ontario, to Toronto-Dominion Bank, Crowland, - Ontario, for account of NCS- ¢ Docld: 32305185 Page &
7 Released ‘under the John F. Kennedy Assassination Records Collection Act of 1997 (44 Us 2107 Hofer. + DATE: 11-14-7017 , - . \/ eo mK ; . DE 29-1432 VGW: kam = 4 | . $5,725. 56 Converted to PB Cashiers Check Number 1-22403, payable to Bantam Industries, Inc., | Boston, Massachusetts, representing two payments. of $2,862.78 each on loans to NCS and ANC by Pb, Loans 5370 and 5369, sold to ; Bantam Industries, Inmc., by PB ‘ All disbursement. entries in connection with the above VOI loan transactions were effected on the books  §—| | of PB by means of intra bank debits and credits only, originated by various bank personnel. The proceeds of this loan did not flow through an account for VOI, but instead wore distributed as imdicated directly from the loan and were entirely used to aid the finances of ANC and NCS. . On file in PB is an. unaudited financial statement dated December 31, 1960, of ANC in suppert of its own direct loans from PB. This statement was prepared by the Detroit CPA firm of Plante and Moran and reflects net insolvency in the amount of $934,100. The statement indicates ANC cash was overdrawn. $1,300. Another financial statement of ANC dated September 30, 1960, contained in PB file, showed net insolvency of $662,600 and cash overdrawn $20,900. ‘his statement which also was prepared by Plante and Moran, shows ANC had a net . loss of $265,600 during the preceding seven months. A financial statement of ANC dated December 31, 1959, contained im PB tile, reflects net insolvency of $506,200, Also contained in PB eredit files is a financial statement dated September 30, 1960, of NCS in support of its direct loans from PB. This statement reflects net insolvency of $63,200 and indicates that NCS had an additional operating loss during the statement 4 period of approximately $50,060. A bank overdraft of $42,000 was indicated. A financial statement of NCS dated November 30, 1959, showed net insolvency of $338,100 and net operating loss of NCS for an eleven month period in the amount of $293,344. Docld: 323051385 Page 93
| Released under the John F. Kennedy Assassination Records Collection Act of 1992 (44 USC 2107 Hofey. ‘7. DATE: 11-14-2017 1 \ L . t DE 29-1432 VGW: kam = 5 The only support im PB files for the $50,000 loan to VOI was a VOI financial statement dated - January 31, 1961, which showed a deficit of $37,300, a net.worth of $15, 700, and an operating loss for the nth of January, 1961, of: $4 900, WOI tax returns for 1958 to 1961 showed repeate iossés and insolvency.) . As shown by the foregoing, PB through its President, JOSEPH F, WERHELLE, advanced $50,000 of PB funds in the name of VOI, an insolvent firm devoid of earnings. These funds were diverted by PB and used for the benetit of two other firms, ANC and NCS, also insolvweat and devoid of earnings at the time. This advance would therefore appear to be a@ misapplication of PB funds im violation of Title 18, United States Code, Section 656... Furthermore, | the deceptions employed by PS mamagement in the negotiation of the above VOX loan and the diversion and use of the procseds thereof would appear to be a violation of Title 18, United States Code, Section 1005. -2,. Unsecured loan to The Alwin Naiman Corporat on 2 $50, 000 On October 16, 1959, PB extended a $50,000 credit to ANC as evidenced by an umsecured note number 3480 of ANC for $50,000, dated October.16, 1959, due on demand, executed by DOMINICK E, BARONE, Vice-President and Treasurer This loan was approved by PB President VERHELLE and Assistant Vice-President ROBERT -E. McCARTHY, JR. ‘the proceeds of the mote were fully converted into PB cashier's check number 1-9699, dated * October 16, 1959, for $50,009. The cashier’s check is payable to’ ANC and is signed by ROBERT A. DORST, Assistant Cashier-Note feller, ‘This cashier's check is endorsed ANC by DOMENICK E, BARTONE, Vice-President, and is addnt Lanes 16 orsed Niagara Crushed Stone (Humber stor imi ted D’ AMTICO and was negotiated through the SOI tou Dom nion Bank, Crowland, Ontario. The proceeds of this loan were used to facilitate the purchase by ANC of NCS and was the first in a series of advances made by PB to. finance the purchase and ostensibly the operation of NCS and of ANC. This loan was fully eliminated October 24, 1959, from the =o Fo Doclda: 32305185 Page 10
"7Released under the John F. Kennedy Assassination Records Collection Act of 1997 (44 USC 2107 Hofey- . DATE: i1- 14-2017 a | i i | | { | | DE 29-1432 VGW:kam = 6 proceeds of an additional loan by PB to ANC for $240,000. The $50,000 loan plus interést of $60 .06 was immediately deducted from the $240,000 loan and the remainder, $189,931.94, was credited to the ANC checking account in PB, The only support om file in PB for the above $50,000 loan to ANC is a financial statement of _ ANC dated December 31, 1960, which shows the firm ' Wwas then insolvent to the extent of $934,053 and its cash was overdrawn $1,300. Other financial statements of ANC contained in PB files showed that. - during the period of 1958 to 1960, there was 2 progressively increasing condition of insolvency and operating losses, The foregoing indicates that advances were made by PB through President VERHELLE and Assistant Vice President McCARTHY im the sum of $50,000. to ANC which was hopelessly insolvent and devoid of earnings. These advances, therefore, appear to constitute a. misapplication of PB funds im violation of Title 18, _ United States Code, Section 656. PB also failed to -have the above note signed by two of the borrower | firms officers although the borrowing resolution in connection with this Line of credit required thé Signatures of two such officers on all note obligations, 3.4 Unsecured loan to the Alvin Naiman Corporation - $240,000 - On October 24, 1959, PB granted a loan of $240,000 to ANC. The note was executed by ALVIN NAIMAN, President, and DOMINICK E. BARONE, Vice-President. The loam was entered upon the : bank's books October 24, 1959, and was approved by the PB Board of. Directors ¢ on Oetober 23, 1959. It was also approved. by President VERHELLE; and Assistant Vice-President McCARTHY assisted im the negotiation and closing of this loan. As indicated in number 2 above, a previous loan of ANC was paid from the , proceeds of this loan and the remainder was credited to the checking account of. ANC.: = @ = Doclda: 32305185 Page il
, DE 29-1432 VGW:kam = 7 , ANC. ALL of this collateral was pledged to secure “advances. Of Port Colborne Quarvies Limited. Ultimate Liquidation ‘value of the security pledged to subject loan, the This loan was secured by alleged first and second liens om real estate and quarry of NCS at Port Colborne, Ontario; by alleged first and second liens on equipment of NCS; by alleged first and second liens on certain machinery of ANC; by alleged blanket assignment of accounts recelivableof both ANC and NCS; by alleged assignments of inventory of each company; by pledges of stock of each company; by various . unsupported cross guaranties of ALVIN A. NAIMAN, MARIE NAIMAN, DOMINICK E. BARTONE, ANC and NCS; and by subordination agresments wagardin ig cebts due ALVIN NAIMAN, SERVICIOS INMCERNACIONALES, Panams, and not only the subject loa to NCS discusséd under m i, but also 4 $240 , 000 Loan : ber S below, and subsequent . There were indications that a large portion, if not all procesds of subject Ioan were diverted to the direct use and benefit of NCS, SERVICIOS. INTERNACIONALES, an inte eet ef DOMINICK E, BARTONE, and to BARTONE personally. These diversions were accomplished through confldcting cross accounting entries which made a complete and accurate determination in this regard impractical at the time of examination. On January 4, 1961.5 a receiving order was issued to effect a state of bankruptcy as to NCS, and it was actually placed in bankruptey in July, 1961. Subsequently, a new corporation was formed, Port, Colborne Quarries Limited of Port Colborns, Ontario. -PB filed a claim against the bankrupt estate which claim included its loans to ANC and NCS, then having balances approximating $246,962.03, plus ~" other items, In settlement of its claim amounting ~ © to $837,505.16, in total, PR received notes. totaling$80000 to be expected from these latter notes is in serious doubt. ' In view of the previously mentioned insolvency and consistent lack of earnings of ANC, the questionable apparent improper diversion of loan proceeds to. = 9a
DE 29-1432 , ‘ ‘ VGW: kam =-.8 purposes other than those represented by the bank's records, the continued bad management of ANC, and the continuing doubtful prospects of recovery by PB of the full amount of its advances, subject loan of appears to constitute a misapplication of funds under Title 18, United States Code, Section 656. 4, Secured loan to Niagara Crushed Stone (Humberstone) | Limited = $240,000 On October 24, 1959, PB granted a loan to NCS for $240,000. The note was executed by ALVIN NAIMAN, President, and DOMINICK E. BARTONE,. Viee=President. This credit. was approved by PB’s Board of Directors on October 23, 1959, and was ‘enterad upon the bank's books on October | 24, 1959. The loan was approwed by President VERHELLE; and Assistant Vice-President McCARTHY assisted in the negotiation and closing of the loan. The entire proceeds were credited immediately to the NCS checking account in- PB. The loan was also secured by the same cenateret allegedly pledged to the _ ANC $240,000 loan discussed under number 3 above. In. addition to the information “previously set forth concerning the insolvency and operational losses of NCS, financial statements prepared by JAMES M, DUNWOODY and Company, chartered accountants, Toromto, Ontario, showed the following information as-of the dates indicated: _ 12/31/58 $138,000 — , $ 43,200 6/30/59 . $123 , 600 $167,000 12/31/59 «$404,906 $448,100 6/30/60 $137,400, | $585, 600 From the foregoing, it appears that NCS was an operating failure and insolvent considerably prior to the granting of subject loan by PB and that these conditions worsened subsequent to the granting of the loan. = 10-4
DE 29-1432 VGW:kam ~ 9. AS pointed out under number. 3 above, PB filed a claim for its loans to both ANC and NCS against the bankrupt estate of NCS. Im settlement of its clain, PB recéived notes aggregating $800,000 of Port Colborne Quarnes Limited. Ultimate payment of these notes depends entirely upon the future operat ing Success of Port Colborne Quarries Limited and is in doubt due to the firm's showing to date, its undercapitalized pesition and the operating failure of its predecessor. In view of all the above circumstances, subject loan appears to constitute & misapplication of funds under Title 18, United States Code, Section 656. 5. Secured loans. to; Niagara Crushed Stone (Humberstone): Limited - $75,000; and to: The Alvin Naiman Corporation = $75,000 on April 7, 1960, PB granted Loans to the above named firms for $75,000 each, being numbers 5369.and . 5370, respectively. The loans were payable in monthly installments and participated fully in the same security pledged to the loans of these firms described under number 3 and number 4 above. The loans were approved by President VYERHELLE and the proceeds were immediately credited to the respective borrower firms’ checking accounts im PB. At the same time, both loans were fully sold, without recourse, under a participation arrangement to Bantam Industries, Imc., Boston, Massachusetts. These participated loans were included -in the PB claim against the bankrupt estate of NCS as set out in mumber 3 and number 4 above. + Apparently for his sefyices in this matter, the attorney for Bantam I ries, JOEL A. KOZOL, received a fee of $1,500 as evidenced by check in that amount Gated April 4, 1960, payable to JOEL A. KOZOL, drawn on. the ANC checking account at PB and executed by DOMINICK E. BARTONE, Vice-President, As consideration for participating in subject loans, Bantam Industries, Inc., required payment thereto of a fee of $30,000. This payment was charged on April 7, 1960, to the ANC. checking account in PB as evidenced by ANC check dated April 4, 1966, for $30,000, executed by DOMINICK E. -lle-
-VGW: BJM - 6 DE 29-1432 office. He said that he did not know what GROSS was dping there.. He recalls something being mentioned about TRISCARO being. in difficulty in Florida. He said that BARTONE made . many trips to Miami during this period and ran up a $12,000 bill with Eastern Airlines. “He said that BARTONE brought in ~ an attorney named GONOONE from Toledo to represent the Company. He said that he believes that the Company still owes GONOONE ' about $5,000. 'NAIMAN said that the Companies were still in need: of money and in approximately April, 1960, BARTONE told NAIMAN - that they were going to obtain another $150 , 000 from the Public Bank of Detroit. He said that he and BARTONE went to the Public Bank and met with VERHELLE in his office. Also present was an. attorney named KOZEL representing a lending organiza-~ tion called Bentum Industries, Boston, Massachusetts. NAIMAN ~ recalls signing a check in the amount of $30,000 which he understood was interest on the loan. He also signed a check .. - for $1,500 to KOZEL. He said that the net proceeds of the. loan therefore were . less than $120,000. NAIMAN said that the -' proceeds of the loan were split between the’ Alvin Naiman Corpora-~ tion and the Niagara Crushed Stone Corporation. He said that the total indebtedness to the Public Bank was being paid back at $5,000 a month. He believes that they paid back a total of approximately $100,000. NAIMAN said that in approximately July, 1960, his son became extremely upset.because the Corporations were in dire financial straits. His son got into an argument with BARTONE and when BARTONE started berating his son, NAIMAN slapped BARTONE. He said that BARTONE thereupon left. but returned the next day to apologize. NAIMAN said that he told. -BARTONE that he wanted to get rid of the. business and give BARTONE power of.attorney for this matter. He said that the next ‘thing he knew the Corporations were in bankruptcy. NAIMAN said that he then decided to see what he ‘could do to remedy ; the\ situation and went to Canada to talk. with Mr. McGRIFFIN of the Canada Steamship Company which. had taken over the Niagara Crushed Stone Company. He learned” . from McGRIFFIN that his Company had assumed $700,000 in debts to the Public Bank of Detroit. NAIMAN said that he could not -~ “wnderstand how the indebtedness could still be that high when. .«they had paid off. $100; 000: and had only borrowed a total of $630,000. NAIMAN said that. in addition he learned that BARTONE. had assigned. $240,000 in good. accounts receivable to the Bank: = 41 -