Sunday Gazette-Mail from Charleston, West Virginia on July 7, 1974 · Page 10
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Sunday Gazette-Mail from Charleston, West Virginia · Page 10

Charleston, West Virginia
Issue Date:
Sunday, July 7, 1974
Page 10
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Page 10 article text (OCR)

Johnson Hinted $20 Million Short ROBERT D. JOHNSON ; - 520 Million Short Arrests Cripple Drug Ring :WASHINGTON - (A' J ) A-drug-smuggling ring alleged to have brought $32.7 million worth of cocaine into this country from Chile in military a i r c r a f t a n d d i p l o m a t i c pouches has been crippled wltjithe arrest of 20 persons, the Justice Department says. · ."Chilean authorities arrested 16 persons in Santiago, including members of the Chilean air-force and navy. Six others were'arrested this week in the Washington area. New York City and Madison, Wis. '· The Justice Department said all 22 were key members of the ring; sealed indictments were returned in New York on June 5 but kept secret so that authorities could make arrests as simultaneously as practicable. .] -The announcement was made jointly by John R. Bartels Jr., U.S. drug enforcement administrator, and Chilean Ambassador Walter Heitman, who stressed that law agencies of the two countries had cooperated in the investigation. '.The ring was said to have smuggled at least 162 pounds of cocaine from Chile to New York, via Washington between May 1973 and last month, Bar- telrsaid. A spokesman said .cocaine has an illegal street sale value of more than $500 a gram. '.The five-count federal indictment alleges that a naval officer stationed in Valparaiso with access to diplomatic pouches arranged the smuggling. ALEXANDRIA, Va. (AP) -- Robert D. Johnson, who enticed investors into giving him more than $26 million to invest in an allegedly fraudulent wine scheme is return for high profits is about 120 million short, federal investigators figure. About 400 investors stand to lose millions of dollars, and banks who made unsecured loans to investors may lose more than $6 million. One bank president who approved $3.7 million in loans to investors in the scheme has resigned. The Johnson financial empire began crumbling April 1 when the Securities and Exchange Commission started probing the wine scheme operated by Johnson through his company. Ridge Associates Co. of Alexandria. The investigation was prompted when some investors asked a stock broker how it was possible for Johnson to promise a fantastic guaranteed profit of from 30 to 100 per cent. The broker asked the SEC to check the enterprise. The U.S. District Court here on June 14 enjoined Johnson and his associates in the wine scheme from soliciting any more investment money. The SEC charged Johnson's wine business was a "multimillion dollar... .sham" with Johnson using money collected from new investors to pay back earlier investors. Investigators said they found no evidence any wine was ever bought or imported from Europe to the United States. Johnson has been charged with civil fraud in suits filed by investors, and federal investigators are trying to determine if any criminal violations occurred in the pyramid scheme that apparently worked well for intial investors but finally grew too big to survive. The pyramid scheme, according to the SEC, began in 1968 when Johnson, a middle- management employe of Chesapeake Potomac Telephone Co. in Charleston, W. Va., began soliciting investor financing for "wine purchases." Johnson moved to northern Virginia a few years later and started operating as Ridge Associates. He continued seeking investors by promising to buy low-grade industrial wine in Europe for resale at high profit in the United Stats. The SEC said Johnson mis- represented the deal by saying it had the approval of the United Slates Agency for International Development and the Department of Commerce, and that the wine was insured by Lloyd's of London. Neither statement vas true, the SEC said. Johnson's assets have been frozen by a federal bankmpt- CY court where Johnson is fighting a sail to declare him bankrupt The court-appointed receiver in the case says the only cash found so far is a |77.MI treasurers check is- sne by the McLean Bank at Johnson's request after he withdrew that amwnt from his personal account. Bank officials toU federal investigators Johnson told them he was withdrawing the money so he could add it to $25 bcinf fteM far nay- oient to inventors. Johns*n. who had been caUed to testify by the SBC earlier, had loM SEC investigators the $25 million was in the International Bank of Lux embwg. SPECIAL PURCHASE WOMEN'S AND JUNIORS ONE OR TWO-PIECE BIKINI SWIMSUITS Women's sizes 12-18 Junior sizes 5-13 90 .Make a big splash ... right into savings. Beautiful Swimsuits i in on*piece, two piece bikini stytes^plids prints. 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Red, black or yellow combinations, all with gleaming contrasting metal trim and lock hardware Handsome rectangular COCKTAIL TABLE. 38x20x17 %". Black top. White frame (not shown 36x36x13" table) Stunning 5-shdf Etagere. It's a room divider, it's a book-shelf. 38x14z77". Black shelves. White frame Yellow or black CHAIR white frame 89" 59" 29" P A il 59 fc*F inn.n.t. APPLIANCE DISCOUNT WiWtyj Tn fey At FAD FAD Guarantees the Lowist Price! For iNrty dap afcw yw- pvrcta w 01 f At), H jov find Ae tame iifffi (ot IMJ otapr ffct Jeff coMnDAs of wfc ·*/! wrilt yOw o . OTWffMlf i^ Srt, irttl H C^WfJ

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