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Mr. WORTH. That is my signature, but I honestly can't recollect the details of it.
Senator HARRIS. That is your signature!
Senator HARRIS. Very well. On that basis the check and the endorsements will be received into the record as exhibit 10.
(Document referred to marked "Exhibit No. 10" for reference and may be found in the files of the subcommittee.)
Senator HARRIS. Continue, Mr. Adlerman.
Mr. ADLERMAN. Mr. Worth, what fee did you get for acting as an agent on the transfer of this $115,000? Mr. WORTH. I received $200. Mr. ADLERMAN. That is all you received ? Mr. WORTH. Yes, sir. Mr. ADLERMAN. No further questions. Senator HARRIS. Do you have anything further that you want to add, Mr. Worth?
Mr. WORTH. No, other than the fact that my memory is a little weak since I had a stroke. Some of these dates I don't remember.
Senator HARRIS. Very well. You may be excused.
There will be no further need for this witness. He is, therefore, , excused.
TESTIMONY OF JOHN J. WALSH-Resumed
Senator HARRIS. Mr. Walsh, you are the same Mr. Walsh who testified previously and you are still under oath. You may proceed to discuss and explain the chart which has been admitted into evidence. That is exhibit No. 9.
Mr. Walsh. The $115,000 was part of the proceeds of this alleged $140,000 loan and investment. We traced three additional items out of the $140,000 as shown on the chart. One of them was a payment to Milton Gordon's law firm of $2,500, which was reported to us to be a fee to Mr. Gordon for his legal services in handling the details of the loan between Frontiers and the straw corporation, Economic Security Corp.
The $1,500 item is one that Mr. Worth has already testified to. We found an additional check of $13,500, which was traced to disbursements from Frontiers Capital Corp.
Senator HARRIS. Are you able to tell what happened to that $1,500, exhibit 10, to which we have previously referred ?
Mr. Walsh. Our investigation indicates that this money went through several different transactions, but it ultimately resulted in cash which was divided between Milton Gordon, Franklyn Levenson, and Martin Von Zamft.
Senator HARRIS. I am talking about the $1,500 check, exhibit 10.
Mr. WALSH. It was cashed at the bank. Whether Mr. Worth or Mr. Marmorstein got the cash, we can't tell. It was cashed at that bank.
Mr. ADLERMAN. The $13,500—would you describe briefly the machinations involving it?
I will withdraw that question.
You did trace that $13,500 through the different, devious transactions?
Mr. Walsh. Yes. It was used to purchase a mortgage and the mortgage was then used as the basis for loans. The cash was actually the proceeds of the loan. There were several transactions that occurred.
Mr. ADLERMAN. Was this eventually divided between Milton Gordon, Franklyn Levenson, and Martin Von Zamft?
Mr. WALSH. Yes, sir.
Mr. ADLERMAN. So a total of $132,000 from the $140,000 originally used by a loan and investment in ESC turned up in the hands of Mr. Levenson, Mr. Von Zamft, and Mr. Gordon.
Would you tell us what the major part of that money was used for?
Mr. WALSH. We note this—That on August 6, 1964, which is a period of a little less than 2 weeks after the receipt of $115,000 cash in Miami, Mr. Levenson made a deposit of $120,000 in currency in an account which was used to purchase
the stock of the Exchange Bank of Hollywood, S.C. This stock was purchased in Mr. Levenson's name.
Mr. ADLERMAN. Would you go on from there?
Mr. Walsh. The next transaction is dated July 30, 1964. It is a loan of $140,000, per the books of Frontiers Capital Corp.; the loan was made to a company called ETA, Inc., and the purpose of the loan was to enable ETA to buy the stock of the Admiral Motor Hotel of Texas.
Our investigation showed that a wire transfer of $140,000 was made from Frontiers funds to the Exchange Bank in Dallas, Tex., to the account of Martin D. Von Zamft, agent.
In tracing the disposition of this $140,000, we found that $100,000 was used to acquire an interest in Admiral Motor Hotel stock in the name of ETA.
This left a balance of $40,000, and in tracing the disposition of this $40,000 we found that a check of $17,235 was used to make a payment on a loan at the Central National Bank of Jacksonville, Fla. This loan was a loan that was guaranteed personally by Martin Von Zamft and Franklyn Levenson and their wives.
We found another check of $3,000 which was paid in cash to Martin Von Zamft.
Senator HARRIS. You said you found another check ?
We found two checks totaling $11,000 which went to several accounts but eventually wound up in the trustee account of Mr. Levenson and used by him as additional purchase money in his purchase of the stock of the Exchange Bank of Hollywood, S.C.
Senator HARRIS. Which stock was held in the name of Franklyn Levenson personally!
Mr. WALSH. That is correct
So from the $40,000 difference between the $140,000 and the $100,000 which was actually used for the Admiral stock, we have traced $31,235 which was used for the benefit of Martin Von Zamft and Franklyn Levenson.
Senator HARRIS. Is that all in explanation of that item dated July 30, 1964)
Mr. WALSH. Yes, sir.
Mr. WALSH. The next item is an item dated August 26, 1964. This was a purchase for $105,000, a direct purchase, by Frontiers Capital
Corp., of the stock of a company called Coin-Meter, Inc. The purchase agreement was executed between Frontiers Capital and Martin D. Von Zamft. However, the purchase agreement that was in the files of Frontiers Capital was unsigned, and our investigation, under subpena, and the investigation of the Small Business Administration, has been unsuccessful in trying to locate the stock of Coin-Meter, which should be in the possession of Frontiers.
In tracing the actual cash, we found that $95,000 was received by Martin Von Zamft in cash on August 28, 1964; $10,000 was received by Martin Von Zamft in cash on September 25, 1964; that totals $105,000. We have no information as to what happened to that cash after that date.
Senator HARRIS. So far as the records of the Frontiers Capital Corp. show, no stock certificates have ever been received from the company of Coin-Meter, Inc.?
Mr. WALSH. No, sir.
Senator HARRIS. And even on the surface, that is a company owned by Martin D. Von Zamft, is it, and one in which he has a substantial interest?
Mr. Walsh. Our investigation has been somewhat obscure on this point. The best information we have is that it is owned by members of his family.
Senator HARRIS. At any rate, this $105,000 cash was traceable to Martin D. Von Zamft personally, and the records of the Frontiers Capital Corp. show nothing was received in return?
Mr. WALSH. That is correct.
Senator HARRIS. You are the same Mr. Worth who testified previously, and you understand you are still under oath?
Mr. WORTH. Yes, sir.
TESTIMONY OF JACK W. WORTH-Resumed
Senator HARRIS. Do you want to have your attorney with you at the table ?
He can come forward.
Shortly after you received instructions and did receive the $85,000 and the $30,000 to your order, as agent, in the bank where you got those drafts, did you get a call from Mr. Levenson?
Mr. WORTH. My recollection is that he did call in this process somewhere.
Mr. ADLERMAN. Did he ask you whether or not the transactions had been completed ?
Mr. WORTH. I think that was the gist of the conversation.
Mr. ADLERMAN. Did you know he had any interest in this matter at all until he called you?
Mr. WORTH. No, sir.
Senator HARRIS. May this witness be excused?
Senator HARRIS. Mr. Worth, thank you for returning. Now you may be excused.
Nr. WORTH. Thank you, sir.
TESTIMONY OF JOHN J. WALSH-Resumed
Senator Harris. Mr. Walsh, you may continue with the item dated November 27, 1964. Refer to the chart identified as exhibit 9.
Mr. WALSH. Our investigation shows, on the books of Frontiers Capital Corp., a loan for $60,000 made to the Construction Facilities, Inc., Chicago, Ill.
Our investigation showed that actually checks totaling $60,000 had been sent to Chicago prior to the date of this alleged loan, and that after passing through several accounts these checks were actually applied on the personal loan of Mr. Gordon and Mr. Levenson which was used by them to buy Frontiers Capital Corp.
Mr. ADLERMAN. You previously testified about this.
I might say that the books and records of Frontiers fail to show any reduction of the $60,000 loan. It is still on the books as an open loan, as are the other transactions.
Senator HARRIS. Very well.
Mr. Walsh. The last item is an item of $4,500 which is carried on the books of Frontiers as in accounts receivable due from ETA and Economic Security Corp. Our investigation showed two checks that were issued payable to Martin Von Zamft and endorsed by him to William Marmorstein as cash in Miami, Fla.
Senator HARRIS. These checks total $4,500?
Mr. Walsh. These checks total $4,500. The explanation that we have received is that they represent an investigation fee that was due Mr. Marmorstein which was paid by Frontiers, and that Frontiers is charging this back to ETA and ESC.
Senator HARRIS. These checks totaling $4,500 are shown to have been endorsed by William Marmorstein and cashed ?
Mr. Walsh. Yes, sir.
Senator HARRIS. Would you summarize again the two total figures as you did at the beginning!
Mr. Walsh. Our presentation here shows loans and investments per the books of Frontiers Capital which we have classified as selfserving. They total $449,500. We have traced cash and other disbursements from the proceeds of these loans to the benefit of Mr. Gordon, Mr. Levenson, Mr. Von Zamft, and Mr. Marmorstein, in the amount of $333,235.
Senator Harris. Do you have in your possession either checks, instruments, documents, or true copies thereof, which you have personally identified and which substantiate the items contained in this chart, exhibit 9, to which you have testified?
Mr. Walsh. Yes, sir.
Without objection, those checks, documents, and other instruments will be received in the record at this point and marked "exhibit 11,"
items A through the alphabet as may be necessary to identify each particular item.
(Documents referred to marked "Exhibits Nos. 11A through 11" for reference and will be found in the files of the subcommittee.)
Senator HARRIS. We will now call Mr. Martin D. Von Zamft, attorney,
Miami Beach, Fla.
You do solemnly swear that the testimony you are about to give before this subcommittee will be the truth, the whole truth, and nothing but the truth, so help God?
Mr. VON ZAMFT. Ido.
TESTIMONY OF MARTIN D. VON ZAMFT
Senator HARRIS. It is my duty to inform you, Mr. Von Zamft, that you are entitled to be represented by counsel, and have him appear with you at the table.
Are you represented by counsel ?
Senator HARRIS. It is also my duty to inform you that whatever you say may possibly be used or held against you in some other legal proceeding.
Do you understand that?
Mr. Von ZAMFT. Yes; I heard the testimony by Mr. Worth, and I would like to make the following statement: I was indicted by a grand jury last Wednesday in Miami.
I feel the indictment is absolutely unjust, and has no basis in fact whatsoever. However, in view of the indictment, I am going to have to refuse to answer any questions propounded to me on the grounds that I may tend to incriminate myself.
Mr. ADLERMAN. Just to recap, as I understand it, you state that you have been indicted in a recent indictment in Miami, and you claim that your testimony here might prejudice your defense?
Mr. Von ZAMFT. I didn't hear you, sir.
Mr. ADLERMAN. I am just trying to recapture what you said. I did not quite hear all that you did say. I want to understand it.
Mr. Von ZAMFT. Would you like the reporter to read it back? Mr. ADLERMAN. Repeat what he said, please.