Evening star. [volume] (Washington, D.C.) 1854-1972, 1955-09-30

aid $4,000 ]
a Shirley Duke apartment
project builder yesterday testi-
fed in Federal Court In Alexan-|
dria that an introduction TO Mid
western financier-build Don Al
Lotus was worth $4,000 toI
him.
Mr.. Lotus. principal stock
holder Of Investors Diversified
Services of Minneapolis. which
financed the FF1A-insured Shir-|
LEY Duke project. was introduced
Ito Herman w. Huffman. 280l
Quebec street NV. Mr.. Hutman's|
$606, 900 "windfall" profit was
the largest slice Of an $l.8 mill
lion melon divided among the
projects stockholders. The in-|
PRODUCTION was made by william
and Alfred Bernstein. Silver
Spring plumbing contractors,
and by Adolf Klein, q Northeast
Washington man.
Mr.. Huffman testified that VIII
Liam Bernstein received q al, 900
slice OF the melon. while the
other two men received $sl 600
each.
Got Plumbing Contracts
The Bornsteins also were given
much Of the plumbing contracts
for Shirley Duke. Mr.. Hutman|
said.
In other testimony yesterday.
|it was brought out that Investors
Diversified. to which the Alex
|andria project Is accused by the
FLA Of making more than $700. 4
900 illegal payments. was
awarded q ~ per cent cut Of
gross rentals for managing
Shirley Duke.
When the MANAGEMENT con-
tract was torn up In 1851. Mr..
Huffman testified under cross
examination, the Minneapolis
group was awarded o contract
calling for q Ia per cent cut
LOT gross rentals for not manag-
ling the apartments. This rather
negative arrangement. which
pays roughly $l5.500 annually.
lis in force until April, 1856. he
said.
Brian Gordon. IT.. Berryville
tva.) builder, partner In the
Shirley Duke apartments and
beneficiary with his wife Of more
than 100000 from the ''wind-
fall" testified yesterday that he
met Mr.. LOTUS in December.
1913. while mentioning In
Florida.
Gave Up Option
He said he gave up an option
to buy part OF the Shirley Duke
tract on the condition that he
be allowed to participate In the
development Of the site.
Mr.. Gordon told Of an ALL
might meeting in q washington
hotel room In 1850 at which
The. Mr.. Huffman, Earl J. Pres
ton Of 1906 Bruce drive. Silver
Spring tthe third Shirley Duke
lbuilder) and Investors DIVERSE
fed executives met to reorganize
their partnerships.
| While the area builders "twid-
died our thumbs and dozen on
couches." Mr.. Gordon said. the
Minneapolis firm executives de-
lcided TO give UP their SO per
ilcent interest In the apartment
project and took instead q 6h
Iper cent fee for their services
and influence. This amounted
to more than 100000.
1t was well worth it-and
besides. they were pulling the
strings" MFR. Gordon said.
Testimony BY Appraiser
\ In other testimony before
Judge Albert v. Bryan Of the
~. s. District Court, Nelson T.
Snyder, jr.. Alexandra real
Iestate man, said he appraised the
apartment project in October,
1850. at $16.5 million, Or SAT-
million above the amount OF the
lFHA-insured loan. This cleared
the way for the "windfall" profit
'Iof SIS million, the difference
between the loan and actual
construction. to be distributed.
! Justice Department Attorney
/ Carl Eardley attacked the ac-
/, curacy Of Mr.. Snyder's assess
ment and brought out the fact
that the largest apartment the
Alexandria man had ever as
sessed prior to taking on the
l2,113-unit Shirley Duke group
was a six-unit apartment house.
i The Government is seeking to
take over the Shirley Duke
i apartments In an attempt to
recover what 1t terms the L.
legal profits.
The Shirley Duke sponsors
and those Of the Columbus
(Ohio) Beverly Manor Corp,
t~s I'd - r. 49,.