Page 4 of 29 May 1977 Issue of Des Moines Register in Des-Moines, Iowa

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Des Moines Register (Newspaper) - May 29, 1977, Des Moines, Iowa Ins a Van Shell investors bought million shares Stock around Des at prices ranging up to per Shell game the government says that industries International was an old fashioned Shell game a fraud technique perfected years earlier by famous conman such As yellow kid the idea of a Shell game is simple one company with a product simply merges with a second inactive company that has no products but does have Stock that has been previously registered with Federal because the second company usually is inactive the Stock is pretty the con men buy up the cheap merge the two announce some new ventures to boost the Stock Price and then unload the shares on an unsuspecting no written disclosures Are made because the Stock has previously been registered for Sale to merging with a Shell corporation does have its legitimate such As raising but is also is a notorious practice in Stock schemes involving Price manipulation and in the industries the govern ment says three men were at the Center of the scheme Arnold Nelson a new York Dean a businessman from and the Trio got the government and set up a merger Between Indus tries and an inactive Shell corporation 1 named Belko to convince Belkos existing shareholders that they should go for the Ubben and Lovejoy hired an accountant in Colorado Lawrence Bialek to draw up a financial statement that said the firm had j More than in court records the company had nowhere near that and had lost the previous i Bialek didst deny drawing up the financial he said it was properly prepared As a pro forma balance one that represents the future condition of a company if certain such As a pending industries land take he says that the statement he prepared might have been misused by but that he was not to the jury found Bialek was innocent of involvement in the the govern ment lined up big blocks of j Belko Stock that could be before Long the merger was 1 completed leaving Ubben and j Lovejoy with big chunks of Stock in the newly formed company and a Large number of shares outstanding in i the the company that would sweep Des Moines off its feet in a unique Stock Sale was set the Stock held by the insiders like i Lovejoy and Mahler was known As letter Stock or restricted by it was not supposed to be sold until the company demonstrated a consistent pattern of i it had to be disposed of in what the government called Black i Market sales in Des Moines and i the testimony sold a j chunk of the Stock at a profit by getting a new York lawyer Harold Herman to write an opinion letter saying the Sale was Herman later pleaded guilty of writing false Legal documents and of not disclosing that his fee for the letter was a per although most deny any role in and that the buyers in Des in the words of prosecutor Jed didst have a Chance from the it All began in Ute 1972 and Early at the the Stock Market was the Dow Jones Industrial average had just passed the Mark for the first time in history and everyone was making but the Stock that caught the fancy of Many in pcs Moines was no Blue industries International was a Little known company in run by a Man named Billy Lovejoy who was reputed to have a Midas touch with his brought word of industries International to pcs court testimony after he heard about the company in where he also had business interests machine Marvel the thing that distinguished the the Story was that Lovejoy had developed a revolution Ary Miracle pump that could pump wet Concrete 60 stories straight up in the air and could achieve other marvelous not Only would the product revolutionize the construction but it also was going to pump up the Price of the company Stock about As High As the wet Concrete would the initial investors would get Rich As the pump was to be exported to faraway places like Russia and Japan thus the sales pitch from the some of the wild claims should have tipped the investors that All was not in one of the company few monthly news for Lovejoy wrote that industries had entered into an agreement with the government to pump Coal from rail cars to the Rocky Mountain Federal Center in the Coal will be moved i distance of three City blocks and will be conveyed through a six Inch plastic tube stretched Over buildings to reach the Center storage it also heralded the developments of the company negative positive system that would make the pump operate like a cosmic vacuum the letter said the system would vacuum lift material into the pump and move it exceptionally Long of none of that Ever the government claimed in its Case that Lovejoy fraudulently obtained licensing rights to a pump in 1971 and altered it beyond recognition or reasonable Lovejoy denies As far As the company was about the Only thing it Ever exported was bad in industries internal which by that time had moved to Des filed for bankruptcy in the District it listed assets of including Worth of machine shop some debts owed to it and a 1971 Chevy it had More than in about million Worth of lawsuits pending against it and creditors eventually got Back about two tenths of one cent for every they were the company bad Luck didst extend to its Stock according to court More than one million shares of industries Stock were sold to Many of them in and Sears regular prices reduced min a or cml Price our regular prices Are even lower than Liat i dialled in our insert in a Jinx sunday Regis some of lie Nair Ign in tie insert in paper Are not Correct due them reductions in our regular i Fie ale Price a tales Are Cor on Najir Llic 16qiaiml Sim it in Corr truth Llu word l read 16 scanner to a Najir Turl i 10 to Short Midi i i ii to jul Jii ii Short ij8 to ii limited in will on Ujj Juif Woi Pirn deck 2 for Are in Juaniti our to Ortra will b on Pali i b1 to 16 i ii in led do liver Dale is Julih i order Hill on null Zhuk jul Nufrie pain matties und Buk Ipi Bijj Lihue been in ship ice liver Dale june or def will be we arc surfs Foi inv Iii Nice Arni is a flair Roebuck arid rent age of the subsequent Sale Price Ubben and came to Moines the Home of their biggest mean the government who was not a party to the new York had met the two through a drinking de another Des Moines Man involved in the he had been told about love Joys pump and had reacted lending the company in return for his Skeie had been promised three things one Block of shares of industries restricted or insiders one Block of shares that was free and and the exclusive rights to j Market the Miracle which the government says had already been sold to another the theory behind All of this was that Skeie could hold on to the Rei stricter Stock until sales were j he would reap the Benefit of ownership be Able to i sell the restricted he could sell the free and tradable shares on the open Market As the Price went recouping his entire initial Ubben and and the government then began Selling Stock to Des Moines investors As if it were on a grocery store they promised investors they would get one free and tradable share of Indus tries for 50 cents for every two shares of restricted Stock they bought at investors reassured i when the free and tradable shares began trading on the open As they soon the Des Moines investors were assured the Price would Rise and the free shares could be sold the government says Lovejoy and others could make promises like they knew the Stock would begin the government because they were behind bribes paid to a now defunct new York brokerage to quote prices on the Louie the Man who turned states admitted to actually paying the bribes to Stanton and was Given immunity from prosecution for his two other men William Wellens and Theodore Zucker pleaded guilty of paying and receiving bribes to fraudulently induce Stanton to Rig and manipulate transactions in industries International in the weeks before Stanton actually began listing quotes in the interest in industries was running particularly in Des who eventually Lent the company had told some friends about his investment in the the government and Many wanted a piece of the action As Skeie was the Man with the Midas talk of the town at card games at the hyperion Field Over drinks at Al during meetings at the Cork n Cleaver and Johnny and Kays Hyatt the talk was of Billy love Joys Miracle pump and Indus tries beyond the government didst spell out exactly who bought All of the letter but court records Here and elsewhere document that Many Des Moines investors bought the shares once trading started in Early As the Stock Rose from 50 cents per share to More than in less than a investors clamoured for court records Here and in Des Moines indicate who some of them were Bill John Ami Gerald Elston Larry Cedars James Edmund Allen Royce Mike Martin Harold John Donald Merle Ralph and Gene Lloyd Roger Richard Cyril Lloyd Gordon Gordon Patrick United growth investment club and Many by one estimate More than 400 people in Des Moines owned Indus tries International More of the shares were sold through Dickinson than through anyone according to court the Dickinson firm sold shares of the or so shares sold on the open Market in Des frenzied trading other firms that sold Large chunks of the Stock were Piper Jaffray first mid and Lamson Martin a trader at Dickinson at the said the demand for the Stock was Conway traded the Stock for his own account and the the government and described the Rush for phones were ringing off the Wall in Des All hell broke testimony it was All of that j commotion and the prices shooting from 50 cents to that did the scheme the government for it attracted the attention of these purities and Exchange commission the nations securities Market finding Little information on Indus tries immediately the in late suspended trading in the leaving the Des Moines investors with whatever shares they of that they could not unload them on Money piled up the government says j that All of the Money went to buy i things like Billy love Joys Cadillac and into the pockets of Ubbens and it didst go into developing the prosecutor Takeoff Ubben and Lovejoy deny Alt of this and say they Are not guilty of the government says All of the interest in Des Moines was no Takeoff said that the former Des Moines and Knight were promised Large blocks of industries Stock at artificially Low prices if they would tout or talk up industries Stock with local Hughes was working for Dean Witter at the the court i records Dean Witter i would not allow him to Trade the Stock through its Hughes began referring customers to first mid America and the court testimony Hughes and another Colorado Stock i broker set up a company called minotaur to Trade in industries they were Given shares by Ubben at per the govern ment with the agreement that prices Good May 29th thru june loudness Button assures Superior sound at All volume automatic Power off automatic Pio Fuin Ieie Ion la for Dii Uin Muriot town Fri music land they would later kick Back touting denied they were going to sell the Stock at a the government but when trading was says his involve ment was he didst tout any Stock and there was nothing wrong with what he his lawyer told the every thing he did was done in his capacity As a he he he didst make Money on the Deal court records reveal that he lost on the industries he says that he did sell some of the shares to Don Tew after the Sec suspended trading in the but he says he told Tew that trading had been halted for 10 the government says that Knight was supposed to get shares of industries in return for touting the a group of brokers at Dickinson got wind of the share Block that was supposed to move from Stanton and bought it up through Dickinson this prompted a heated argument at Dickinson main office on grand Avenue that had to be mediated by Robert then head of the eventually it was settled and Knight got 750 shares of industries Stock for he sold it a Day later for More than a court testimony Knight that he was simply buying the Stock at one Price and Selling it for a he said he didst get the Stock to tout industries in Des said his lawyer Billy Knight didst tout any the fat cats in Des Moines the men with the Midas touch1 at Iowa realty they were the ones that whipped up the Market in the the hotshots got in on the ground floor and they stood to not Billy Joe the jury found Knight Ubben and the others had set up Dummy corporations and had used laundered the government to funnel the Stock Sale proceeds into Dummy corporations for their personal and Mahler deny All in their lawyers said that a fraud might have been but none of their clients was love Joys lawyer said he was so stupid that he was taken advantage of by men such As Mahler says sneaky weasels such As Louis Kuel and Ted Zucker did him he said he bought and sold his Stock in a legitimate but that Kuel and to got off pointed the Finger at Cut Corners Ubbens said his client was innocent of wrongdoing so he Cut a few maybe he should have known but there is no criminal he made promises or he painting Ubben As a portrait of a Man sold on a product and trying to make it besides Knight the jury found the and another Man Marvin a los Angeles j insurance broker who held a Large i chunk of Belko Stock innocent of 1 any crimes in connection with the i Anthan wins Fellowship at Princeton from the registers Washington Uruu George a reporter in the Des Moines registers Washington has been named the Winner of a oneyear Fellowship at Princeton his selection As an Alfred Sloan foundation fellow in economics journalism was announced by Prince tons Woodrow Wilson school of Public and International the Sloan program chooses eight journalists each year to come to Princeton and study with the aim of improving their under standing of that subject and its relationship to Public a native of and a graduate of the University of joined the Register and Tribune staff in he has been with the Washington Bureau since in he won the american political science association award for distinguished reporting of Public his wife and their three sons will move to for the period of the which begins in Sorenson funeral a private funeral services Are planned for aerospace education Pioneer Frank who died Friday in add room room additions Shell or Complete anywhere in Iowa we can build any size i you Wanti no Money Down 1year work warranty garages kitchens siding i we build buildings that sea our specs before you buy Call collect 2441326 24 answering service open sundays 125 Iowa 5277 second tax Iowa so304 gentlemen i would like additional on item chocked 1 uni Crisand Thuc ii no of 1 garages Cabin Hodio room additions i j siding u kit Ieni Foj remodelling phone 52977 boil time to Coil q g j member National association of Home builders and National Home improvement Council Complete garages on display at 5277 2nd our Vlara you Iowa remodeler 5277 second Box 933 Des Iowa 50304 pm 2441326 Fra

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