19910308a Fbi Memo -solodoff Yamaguchi Pelosi

Memorandum

. SAN FRANCISCO (196A-SF-93255) (P)

To

From

Subject

sAJ. . .___-----1 _ sAJ

(SQ' 5)

Date Date

3/8/91 3/8/91

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CHIP ARMSTRONG, Jr., dba Hamilton Taft and Company 1 Market Plaza Spear Street street Tower San Francisco, California FBW; MFi Tax Fraud; 00: SAN FRANCISCO

The purpose of this_memo this memo is to'document tO'document events events that that ";'::'::~;;"""';~~I"-I:.G.iiIIol~e since ~brua:;y which ~~;;;:"":~~Io6..JII'oIIIel...,e 6bruary 13 II ~ 19 whi,?h is the date date that that ~~~~________~was ~was last interviewed by the writer. On ~~~~ On that that ___________ provided a numbe ocuments to iter __________ ~provided numbs iter which which y he writer to qA or have been disse ~na e ~A or the the IRS IRS C~ere in San Francisco, telephone number 556-6850. C~here 556-6850. It It should: should: noted. that a copy of these documents along with aa summqry also be noted. summ~ry of the writer's review of San Francisco file 196A-2868 has has been been prepared and disseminated to AUSA MICHAEL YAMAGUCHI at 556-1328. 556-1328. this summary summary is a matter of record under aa separate A copy of this separate communication which is a part of this file.

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to the the fact that AUSA Due to AUSA YAMAGUCHI was on annual annual leave leave and did not return to his office until March 4, and/or 5, 1991 1991 no no overt investigation was undertaken. This matter was referred to to YAMAGUCHI he handled ~ Mr. Y GUCHI because of his previous revious referral which w' handled ~ ~g..arding HamHton for ~ re ardin Haml on Taft -in in which he subsequently subse entl QIilCl f r~_ l.sck OJ prosecution.. pros e cntiOIL This --- -7 lJlck This matter was was investigated by S . -7 _it was handled under--SF I _ it was under--SF 196A-2868 196A-2868 and and was closed ~h

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August, 1988.

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with regard to writer with to information supplied supplied byl writer was reluctant to to initiate initiate any was any overt overt investigation investigation for for fear fear thatthere would~ ~uld~ Eotential potential liagility there liability qttached attached wherein the governin~nt £.QB1dJ2e £QB1d1;!e accused..Q.t governm~nt accused.Qf initiatipg the the pownfall downfall ,of captioned company COmpany bvl'the byjthe mere captioned mere fact that that it was was making making overt overt .has provided detailed informat.ion inquiries. [I ..- ' ,has information which which,I ~ of this date, has'been has· been unable of unable to to be be thoroughly corroborated. corroborated. Progress is is being being made made to Progress to effect effect such such coriOEorat2on. corroDorat2on. .

I. I~ expressed expressed apprehension apprehension in in his his mind mind regarding regarding the "extensive "extensive"n time-it time-it was was taking the taking for the the government government to to decide decide whether or or not not to to initiate initiate an Whether an investigation investigation and and to to effect effect some some criminal process. He He was was told tolc:1 tbat ......ll9.;.~_ criminal that the the government government haJl._:t.Q ha_g._:t.Q......... @~_ victim before before any any process process would He victim would be be forthcoming. forthcoming. He was was further further

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196A-SF-93255 PKM/sgc advised on more than one occasion by the writer of the potential civil !iability liability which miggt mi~t attach to the revelation to the

general public that the FBI was conducting or maybe conducting an investigation into certain alleged criminal activities on tne the part of Hamilton Taft. '. ]Ll, 1991~r= Ilsaw saw fit to Nonetheless, on February 1-1, 1991~r= contact the congressional offices here in San Francisco of

congress persons NANCY PELOSI and BARBARA BOXER. ~ Congress on resswoman PELOSI/s PELOSI's office to whom arne of an investi ative re orter spoke ave e CQDtactjng.. with b~s infdrmat-ion. ~hould consider contacting.. infOrmat.iQD. Qn On Fepruar}!'_12.'; Fel;>ruar~,'; writ~r as well wall as ~gentl lof the eIn ~1, the w~it~r ~gentl Cln repo~ed repo~ed -~ receiving telephone calls from an attorney at the Department of jnquiry as to the FBI and/or IRS' connection if Justice making inquiry any with Hamilton Taft. ~t' ~presentat'

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________ _ On February 13, 1991, during the interview of~I ofl~ __ conducted by the writer, he was again questioned as to the reason He for making calls to the aforementioned oonaressional conaressional offices. stated that he was concerned about I Ifollowing his resignation from Hamilton "'rrl-a,'""'I'.rll"!"'~t--o-n--"F~le""'tb""'r""'u"'a""r-Y~1~1~,~1!"'!9!!"'!!9!!"'!!1~. I ~T-a-Y-~t--o-n--F-le-~b--'r-u-a-r-Y~1~1~,~1~9~9~1~. Itt should be noted that during this interview on February 13, 1991 re-iterated that fact fact.that! !I thatl 1 I He was J---again reminded of potential civil liability problems tnat that might ~ £n?ue from the publicatiQD publicatigo Qf the possibl~nterest gn?ue possibl~nterest of the FBI with res~9t resE§.g~~-Hamilton £af~. to-Jiamilton £af~.

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On Wednesday, March 6

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1991, the writer received a~

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telephone call from SAJ ; JIRS CID who advised that he had been called by a M-. RALPH :IN W, an investigative reporter for the Wall street Journal here in San Francisco. The purpose of KING's call to SWAIN was to confirm that the IRS was conducting~DY§stigation regarding Hamilton Taft. On the conducting~nY§stigation morning of March 6, 1991, the writer reviewed message slips that had arrived on Tuesday, March 5, 1991, the writer having been on sick leave that day and one of, them was from RALPH KING of the Wall street Journal. The writer did not return KING's phone res~g to a page, for a telephone calIon call, however, in res~g ~h-~) 1991, the writer became connected the afternoon call of ~h-_6J) street Journal. The usual inquiries were to Mr. KING of the Wall street,Journal. t~at, is we can neither confirm made and the usual response, t~at, and/or deny the existence of any investigation was provided to ~ thi§

perturped £y Mr. KING who seemed perturbed 2

~espOQse. ~espon~.

196A-SF-93255 PKMjsgc PKM/sgc

On March 6, 1991,1 rr head head of of corporate corporate security of Sun Micro Systems Inc. at at 2550 2550 Garcia Garcia Ave., Ave., Mountain Mountain View, California 94043 94043,1 telephone telephone number number (415) (415) 336-0496 336-0496 was was called by the writer in response to call call that that he he had had made made to to our our office on March 5, 1991. that his office office had had was been contacted by was accompanied by an attorney (ph) attorneJ one (ph) who who advised advised that that the purpose of .. _ J.cro oflI _contac lcro Systems Systems was was to to advise Sun Micro Systems that it had been been tBe the victim victim of of aa fraud fraud perpetrated by Hamilton Taft' on Sun .-.Micro Micro systems Systems and and numerous numerous other corporate clients of Hamilton Taft. 'advised Taft. I ~dvised the writer that he would fax certain documents documents up up to to San San Francisco at the writer's suggesti~n. 5uggestiqn. These These documents'included documents· included aa .

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copy of of· the service agreement that( thal: exists exists betw~en betw~en Sun Sun. .l~icl;"o .Mic1;"o

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systems and Hamil ton Taft dated (October 1, 1981 as Systems 1, ..__.1987 as well well as as copies copies of certain Federal tax forms whicn had had been been executed executed by by employees employees of Hamilton Taft Company. I~ Ilalso also advised advised the the writer writer that I ..0, ad of his own volition convened convened aa meeting meeting of of ""~~,1 ""~~}:'~~ _.':~ several of the corporate representatives representatives who who he he had had contacted contacted .t~/;r:~·,:'.t~~('-_~,':;~'.'.J presumably in the first presumably first week of March telling telling these these corporations corporations who are are current and/or former clients of Hamilton who Hamilton Taft, Taft, that that they they had in in fact been ,defrauded defrauded by Sun had by Hamilton Taft. Sun Micro-Systems Micro-Systems reluctantly reluctantly agreed to to "host" this this meeting which which was was to to take take place place .ft"' .I"'" during the afternoon "'; during afternoon of of March March 8, 1991 1991 at at Sun Sun Micro Micro System's System's offices in Mountain View. nf

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Of Ithrobgh ..... Of the the mornin: mornin: of of March March 7, 7, 1991, H91, II I,throtgh' I, an investigator his associatel investigator for for the the COJ;.porate Co~porate Security-. Department of un Micro Systems, facsirniled Securit~Department facsimiled 16/pages l~~ages 0,£ oj documents to the writer. The most salient point of these documents The point of t~ese documents was documents was aa letter letter to to Sun Sun Micro Micro systems Systems dated dated February February 13, 13, "', ,'.' ' 1991 from the ,.IRS in-- Fresno.. 1991 Fresno. The The let}:er letter refers refers to to aa particular particular ,/' ;) >')' tax identification identification number utilized by Sun Micro Systems and . number utilized by' Sun Micro Systems and . '~: references aa tax references tax period period ending ending september september 30, 30 I 1990.; 1990.'- The The letter letter ~,l~:?,.,. }} goes on t·t -.~, '; goes on to to thank thank tax tax payer payer (Sun (Sun Micro Systems) Systems) for for its its reply reply dated January 25, 1991 and its payment of $260,784.25 in penaltyJ, dated January 25, 1991 and its payment of $260,784.25 in penaltyJ;'..... fees and The " - .,~ fees and for for its its late late deposit deposit of of ($5,215, ($5,215, 684.86). 684~86). The Signifirn:e of th~S ~mmunication is that Sun Micro Systems ... signifiri:lD:e Of th~S ::mmunication is that Sun Micro Systems .,'' .. t h r o u g h _ _ h a s represented, as of March 7, 1991, that t h r o u g h L J h a s represented, as of March 7, 1991, that it did did 1nact it lnac~ sen sen tt ee appropriate appropriate money money that that is is $5,215,684.86 $5,215,684.86 to Hamilton Taft via a wire transfer in order to to Hamilton Taft via a wire transfer in order to pay pay employment employment tax obligations obligations do tax do and and owing owing the the IRS IRS for for the the tax tax period period ended ended September 30 September 30 rr 1990. 1990. Per Per an an agreement agreement of of which which the the writer writer is is in in receipt, that is, the service agreement between Hamilton Taft receipt, that is, the service agreement between Hamilton Taft and and Sun Micro Micro System?, System~, Hamilton Sun Hamilton Taft Taft is is responsible responsible for for the the payment of~--L~e ot~--L~e penalti~§4 It payment penalti~§4 It is is an an inference inference drawn drawn by by Sun Sun

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196A-SF-93255 PKM/sgc

Micro Systems personnel that this document tends to corroborate what I I was alleging in his representations to the

government.

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On the afternoon of March 7, 1991, AUSA YAMAGUCHI was personally visited by the writer and a brief update was provided to him of events that have taken place. On March 8, 1991, copies of the aforementioned facsimiles were provided to AUSA YAMAGUCHI fore his review. On March 8, 1991, Mr. YAMAGUCHI suggested to the writer -that ,that efforts continue to accumulate enough probable cause to cause the issuance of a search warrant for the offices at Hamilton Taft at the earliest possible date. The following corporations have been contacted by by

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I land/or his attorney and ~d~~~ed ~d~~~ed that they' have been the victims of fraud perpetrated on them by Hamilton Taft. These

corporations are costal Costal Savings Bank, Sun Micro Systems, American West Airlines, and one or two chemical companies located at the east coast. In addition, I I advised writer that he has been contacted by representat~ves representat~ves of Lloyds of London Insurance company with respect to Hamilton Taft. It is "'y,nkno..wIl is-y,nkno~~ ~~~~~~~dyal~!!!p~;~_!,~~_,~. wil.~ , h_e,Y,~~,},~E?i~~ ~,~!~,!:~ ~~,~_ ___ "_9! ..J)},e ~~~~~~tdyal~!!!p~;~_!,~~_,~.wil.~ h_e,Y,~~,},~E?i.~~,~~~!~,!:~~~,~, J)}.e

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meetl.ng_",Lo-.-oe" ··he~d_~"a_t,.Sun",,M~c_ro __ Systems me~t~ng_"",I:.o-;-oe,,··he~d_~,at,.Sun.,M~c_ro systems, ().ff~~es ().f:!:~pes

o~March at-March 8,

1991.

,on the .afternoon afternoon

San Francisco at San Francisco, California: Investigation is continuing.

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