Tuesday, March 8, 2011

Land and Loot: A How-To on Money Laundering - Part 1

St. Joe Paper’s Beach for Sale

by Linda Minor 

Copyright 2011, all rights reserved 

In the summer of 1986 a land sale occurred which, if analyzed correctly, can reveal the missing links between the actual smuggling and trafficking of illegal drugs in America, the laundering of drug proceeds through offshore banks and the reinvestment of those funds into land development projects. Coming as it did after the peak of the loans—Hill Financial of Red Hill, Pa. and Vision Banc Savings of Kingsville, Texas.

The seller was St. Joe Paper Co., a corporation whose stock was owned by the “charitable” DuPont de Nemours Foundation controlled from 1935 to 1981 by Ed Ball, brother-in-law of Alfred I. DuPont.[1] One of the foundation’s assets, held in Ball’s name (he had purchased it as nominee for Alfred DuPont who set up the foundation) was 21,000 acres of virgin beachfront property between Panama City and Pensacola, Florida. After Ball died, his successor, Jake Belin, stated in 1981 that he planned to develop the acreage himself, rather than sell the property as had once been indicated.

Belin began negotiating with William Michael Adkinson, a native Floridian living in Texas, the proposed buyer/developer for the land. Adkinson had relocated to Texas a few years before and had an office in the Arena Tower One, built by Mel Powers, a notorious alleged murderer in 1964 when he and his aunt, Candace Mossler, were prosecuted for the murder of her husband Jacques Mossler.[2] The core tenant in Arena One was General Homes Corporation, while Jake Belin’s nephew, Bruce Belin, a Harris and Fort Bend County land developer, had an office in the adjacent Arena Two.

Adkinson’s plan was to buy and simultaneously sell the Florida land—known in those days of the real estate boom as a land flip. Therefore, he went about looking for a buyer before ever committing himself to the purchase. As part of his marketing strategy he had glitzy designs of a development on the beachfront property with a hotel projected to be built by the Princess Hotel chain, which, he boasted, was already committed to the project. All he needed was a straw man to flip the property once or twice in order to support an increasing value, thus allowing him to siphon money out of some cooperative federally insured de-regulated savings and loans.

Robert Corson became that shill. He hired a lawyer in Houston to incorporate several sham corporations and brought in a few buddies to be named as presidents. Then, as part of the overall deal, Corson agreed to buy some useless land just north of Houston from General Homes which he would convey to the sham corporations which would then exchange it for the Florida land. General Homes would retain a first lien in the sale to Corson, but he would borrow additional funds from VisionBanc (which would be paid to General Homes) secured by a second lien. He would then resell the property to the sham corporations and retain liens to himself. Then these corporations would trade the land, which was given a greatly inflated value in spite of the liens against it, as credit on the purchase price on the Florida land.

The sales price in the Florida land contract was $200 million, none of which was cash to be put up by the buyer. St. Joe was to receive $70 million in cash, to come from proceeds of loans from Hill Financial and Vision Banc. Adkinson would purchase the St. Joe property much as Corson had done the Texas land, with first liens securing the notes payable back to the seller. In an unusual maneuver he convinced two lenders to make loans secured by second and third liens with the cash proceeds of those also going to St. Joe.

Not a single payment was ever made on any of the loans, and the proceeds paid to the seller at closing ended up in an account at Bank Cantrade on the British Isle of Jersey—a subsidiary of Union Bank of Switzerland. This transaction single-handedly destroyed both VisionBanc Savings and Hill Financial of Red Hill, Pennsylvania.

Following the bank failures, indictments were handed down against the persons whose names were reflected on the closing documents, and routine lawsuits were filed by attorneys appointed by the Resolution Trust Corporation to investigate whether directors of the financial institutions had violated their duties to their shareholders and the taxpayers. But it was Pete Brewton, investigative journalist for the Houston Post, who would not let the story go away. His research into the use by the CIA and Mafia of deregulated Texas savings and loan institutions was aimed at discovering for whom these indicted conspirators were fronting, and he zeroed in on similarities between this Florida transaction and a previous one in Houston, Texas, involving Adkinson.[3]

Brewton’s research disclosed that Mike Adkinson grew up in Florida and, after serving two years in the Army, went to work in his home state for a construction company. He joined Taylor Construction Co., building houses on Air Force and Army bases from 1974 to 1977, when he moved to San Antonio to work for Regal Homes until being transferred in 1979 to Houston, where he worked for two years as a vice president. According to Brewton [at page 333 of The Mafia, the CIA and George Bush], Adkinson “formed” Development Group, Inc. in July 1981 with Frank M. Gammon, Jr., Regal’s treasurer.

Harris County’s real property records, however, reveal that a corporation called Development Group, Inc. (DGI), with connections to Charter Financial Group, Inc., a subsidiary of Raymond Mason’s The Charter Company, based in Jacksonville, Florida, was operating as early as 1977. Mason was a very good friend and business associate of Ed Ball, the trustee of the estate left by Ball’s brother-in-law, Alfred I. Du Pont. Mason wrote Ball’s biography entitled Confusion To the Enemy, deriving the book’s title from a favorite toast Ball often made. 

This first DGI had sold all its land by September 1980 and failed to pay its corporate franchise taxes due through April 1981, resulting in the forfeiture of the state corporate charter.[4]  Adkinson somehow came up with the same name in 1981, when new articles of incorporation were filed by Marc Gordon, an attorney at Lackshin & Nathan of Houston, reportedly acting on behalf of his client, Ben Koshkin. 

The coincidence of names is intriguing because in 1972 Charter Oil and St. Joe paper swapped stock, giving Charter 8% of St. Joe and St. Joe 23% of Charter. In 1983 after Ball’s death, the swap was reversed. Three years after Charter declared bankruptcy in 1984, the stock was sold to Carl Lindner’s American Financial Corporation. Lindner has a history of buying companies with CIA connections, and those that have been looted. Examples are United Fruit Company, the Great Southwest Corporation, the Penn Central Railroad, and even Houston’s own Splashtown USA, which was another recipient of a loan from VisionBanc. St. Joe’s president, W.L. Thornton, signed a contract on October 3, 1985 to sell the 21,000 acres in Florida to an investment company (Panhandle Coast), whose president was Michel Beauvais-Wagoner.

Brewton discovered that Beauvais-Wagoner was the office manager and legal assistant for a Miami attorney named Lawrence Freeman, a front for persons named on the offshore account which ultimately received the biggest portion of the proceeds of the sale. These men were Raymond Harvey and Keith Alan Cox, whose address was #2 Tavistock in London.

Who was Keith Alan Cox?
The initial real estate contract provided that the initial purchaser, Panhandle Coast, would subsequently assign all its rights to buy the property to a joint venture composed of Mike Adkinson and Southmark, a conglomerate which began as a real estate investment trust held by Citizens and Southern Bank in Atlanta, notable, according to Brewton, for its CIA connections. We learn from the 1998 11th Circuit Court opinion, which reversed the convictions of certain players, that "Cox represented a group of Kuwatis who invested internationally through a multi-billion dollar company called Compendium Trust." This trust was a party to a 1987 lawsuit:

In Gheewala v Compendium Trust Company Ltd the plaintiff brought an action in Jersey seeking to establish his entitlement to a share of his family’s substantial assets following the death of his father who had died domiciled in Kenya. The basis of the plaintiff’s claim was that he was a member of a joint Hindu family as recognized in Hindu law. The first defendant was a Jersey company alleged to hold assets for the joint family, but all the other defendants were descendants of the deceased father who were domiciled in Kenya albeit half were resident there and half in England. Initially after the father’s death, some family members had held a mediation in London to settle the matter, but the settlement reached was then purportedly repudiated following which proceedings were issued in London, Kenya and Jersey. The disputed assets were scattered throughout East Africa, Europe (including substantial assets in the Channel Islands) and North America with the relevant documents in the same country as the asset in question.
 Another lawsuit in 1997 named the plaintiff as Mahesh Gheewala.

 One of Cox's partners was a man named Donald Martin Clitheroe, who was disciplined by the Law Society in the United Kingdom in 2006 for a long list of allegations including money-laundering and mortgage fraud and determined "not fit to be a solicitor." According to the facts of the case, Clitheroe was "born in 1955, was admitted as a solicitor in 1978. At the times material to the application the Respondent practised as a solicitor in partnership under the style of Cox, Clitheroe & Bond at Dilke House, 1 Malet Street, London WC1E 7JN. The Respondent ceased so to practise on or about 5th December 2002." It should be noted that both Tavistock Place and Malet Street are located near the Tavistock Square Gardens in London, south of Euston Station. King's Cross tube station, where the  July 7, 2005 bombing occurred, is just more than a mile to the northeast.

Freeman’s name set off alarm bells for Pete Brewton. This lawyer had been the in-house counsel for the Bahamian Castle Bank and Trust which gained notoriety in 1980 when the Wall Street Journal exposed its connection to Paul Helliwell. Helliwell, also a lawyer, had been a colonel in the U.S. Army’s G-2 Intelligence unit in the Middle East, later transferring to the O.S.S. as Chief of Intelligence in China. He had a reputation for buying information with bars of opium and reputedly met with Ho Chi Minh, leader of North Vietnam, three times in 1945. Despite his determined negotiation, Helliwell was unable to reach an agreement for the U.S. to provide Ho with weapons to use against Japan because Ho would not swear not to use them against the French as well. When O.S.S. was disbanded, Helliwell went back to his work in War Department (now euphemistically known as “Defense”) intelligence. He left the military around 1947, when the CIA was created, and joined a Miami law firm—Bouvier, Helliwell and Clark—but still found time to work for the CIA.[5]

His first major assignment after the war was to find a way for the CIA to subsidize the airline, Civil Air Transport, owned by Major General Claire L. Chennault, which had been used to furnish materiel to the anticommunist Chinese in Southeast Asia. In 1951 Helliwell set up Sea Supply as the CIA’s first proprietary company in order to transport weapons to the Nationalist Chinese troops in Burma and to Thailand police, whose Chief was involved in the opium trade. The planes were not returned empty after the guns were unloaded; they were filled with drugs destined for the United States—usually Florida. 

The money derived from the sale of the drugs had to be laundered for the CIA, and Helliwell figured out how to do it.  His associates in Sea Supply, and later in the Caribbean area planning the overthrow of President Jacobo Arbenz of Guatemala, were New York attorney Thomas G. Corcoran (one of FDR’s “Brain Trust”) and Frank Wisner.

[1] The actual beneficiary under the will of Alfred Du Pont was a tax-exempt charitable trust which was to be managed for the benefit of a hospital for the elderly and for crippled children, held in trust by his wife Jessie and her brother, Ed Ball, as trustees. In 1981 when Ball died, his personal estate was also bequeathed to the foundation, with the executor and successor trustee being Jake Belin, a second cousin of Harris and Fort Bend County land developer Bruce Belin. When questioned about the distribution of Ball's property to the foundation, Belin admitted to selling some land held in Ed Ball's name to McDonnell-Douglas and Hughes Aircraft, the proceeds from which sales were "reinvested" into government securities.

[2] Candace had contacts with a number of sleazy attorneys: Melvin Belli handled a sale of a business known as United Surgical & Dental to her. The shares in this corporation were held by a San Francisco investment trust made up of himself and partners Lou Ashe and Richard Gerry; Percy Foreman represented Candace and Mel Powers in the murder trial, in which they were acquitted. The attorneys for United Surgical were Clyde Woody and Marian Rosen; Rosen came to Houston from Florida and later represented Edwin P. Wilson in his trial for selling explosives to Libya. Woody and Rosen were replaced by Lackshin and Nathan, who also represented Central National Bank, Continental Savings, Frank and Alec Hudson (Cadillac Development), John Riddle and Robert Corson. They had a variety of offices over the years--first with William Ladin, Houston Natural Gas Building, Shell One, Central National Bank Building, and Gibraltar after the S and L relocated to Northborough.

[3] Pete Brewton, The Mafia, the CIA and George Bush.

[4] according to a notice of State Tax Lien filed November 13, 1980 [File No. G54945]

[5] Most of the account which follows of Helliwell's career is taken from Alan A. Block, Masters of Paradise: Organized Crime and the Internal Revenue Service in The Bahamas (New Brunswick, N.J.: Transaction Publishers, 1991).

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