19910325a Memo Regarding Contact Betwwen Sf And Dallas

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FBI CLASSIFICATION:

PRECEDENCE:

o TOPSECRET o SECRET o CONFIDENTlAL o UNCLAS EFT o UNCLA-S",-

o Immediate o Priority o Routine

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TO LEGAT aERN/PRIORITY/ BT

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SUBJECT:

CONNIE C ARMSTRONG JR AKA, CHIP ARMSTRONG, JR

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7 HAMILTON TAFT AND COMPANY, ONE MARKET PLAZA, 32ND FLOOR, SPEAR

S STREET TOWER," SAN FRANCISCO, CALIFORNIA 94105; MAIL FRAUD, FRAUD 9 f3Y WIRE

(A), TAX FRAUD; 00:

SAN FRANCISCO.

REFERENCE SERIES OF TELEPHONE CALIS BETWEEN SAN FRANCISCO

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lAND

DALLAS DIVISION AGENTS ON

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12 FOR THE INFORMATION OF LEGAT BERN, SAN FRANCISCO HAS 13

ITIATED A FRAUD BY WIRE INVESTIGATION BASED ON INFORMATION 14

_ _ _ _ _ _ _ _ _ _ _ _ _1 THE FORMER CONTROLLER OF

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CLASSIFICATION:

PRECEDENCE:

o TOP SECRET o SECRET

o Immediate o

Priority

o CONFIDENTIAL o UNCLAS E F

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HAMILTON TAFT IN SAN FRANCISCO WHO HAS ALLEGED THAT CAPrIONED

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SUBJECT ARMSTRONG HAS EMBEZZLED APPROXIMATELY $100 , 000,000 OVER I

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THE PAST THREE YEARS FROM ITS CLIENTS.

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HAMILTON TAFr IS A FIRM WHICH CONTRACTS WITH MANY OF AMERICA I S FORTUNE 500 COMPANIES TO COLLECT MONIES IN A LUMP SUM

6 AND THERE.AFTER PAY VARIOUS FEDERAL STATE AND LOCAL TAXING 7 AUTHORITIES FOR TAXES DUE AND OWING BY THE CLIENTS OF HAMILTON

B TAFT •

ACCOlIDING TO

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, HAMILTON TAFT S CLIENTS USUALLY I

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9 WIRE TRANSFERRED MILLIONS OF DOLLARS TO ONE OF HAMILTON TAFT'S

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BANK ACCOUNTS IN SAN FRANCISCO AFTER WHICH A CHECK WOULD BE ISSUED BY HAMILTON TAFT TO WHATEVER TAXING AUTHORITY WAS OWED

ONEY. HAMILTON WAS REQUIRED TO FORWARD THIS MONEY TO THE TAXING

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UTHORITY AT THE END OF EACH PAY PERIOD BUT WAS HELD ACCOUNTABLE

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THE IRS ONLY AT THE END OF EVERY THREE MONTHS.

ARMSTRONG

GEDLY KEPI' MANY OF THESE PAYMENTS FROM THE FIRST PAY PERIOD F THE QUARTER FOR HIS OWN USE, AND AT THE END OF THE QUARTER N HE HAD TO REPORT TO THE IRS, HE WOULD BE SUBJECTED TO A TEN

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ERCENT LATE PENALTY FROM THE IRS, BUT THE CLIENTS WOULD NOT

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ENERALLY BECOME AWARE OF THE IRS LATE NOTICE AND/OR PENALTY

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Approved. - - - _ . - - - -

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Transmitted

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(Number)

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FBI CLASSIFICATION:

PRECEDENCE~

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Immediate Priority Routine

o SECRET o CONFIDENTIAL o UNCLAS EFT o UNCLAS Date

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APAGE THREE 1

ASSESSMENT BECAUSE MANY OF THEM HAD GIVEN HAMILTON TAFT A POWER

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OF ArrTORNEY WHICH AMONG OTHER THINGS AUTHORIZED ALL

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CORRESPONDENCE TO GO TO HAMILTON TAFT AND NOT TO THE CLIENT.

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LATE PENALTIES WERE ALLEGEDLY PAID WITH OTHER CLIENT'S FUNDS

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WHICH WERE ARRIVING AT HAMILTON TAFT AND NOT TO THE CLIENT.

THE

THE

6 LATE iJENALTIES WERE ALLEGEDLY PAID WITH OTHER CLIENT I S FUNDS 7 WHICH WERE ARRIVING AT HAMILTON TAFT ON A CONTINUOUS BASIS.

IN

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B ESSENCE 1

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STATING THAT HAMILTON TAFT WAS RUNNING A

9 "PONZI SCHEMEti OF CONSIDERABLE MAGNITUDE WHICH REQUIRED MORE AND

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ORE MONEY TO KEEP IT GOING.

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_ _ _---IILEFT HAMILTON TAFT ON FEBRUARY 11, 1991 AND ON

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11, 191 THROUGH HIS ATTORNEY HE FILED A "WHISTLEBLOWER"

12 WSUIT IN FEDERAL DISTRICT COURT IN SAN FRANCISCO UNDER THE

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TITLE 31, USC SECTION 3730.

14 ON MARCH 15, 1991, ALL EDITIONS OF THE WALL STREET JOURNAL

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16 17 18

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A FRONT PAGE ARTICLE DESCRIBING SOIDOOFF I S ALLEGATIONS.

ON

CH 16, 1991 THROUGH MARCH 21, 1991, THE SAN FRANCISCO SPAPERS RAN FRONT PAGE STORIES ON HAMILTON TAFT AND SOLODOFF' S GATIONS. FOR THE INFORMATION OF LEGAT BERN I

Approved. - - - - - - -

ARMSTRONG IS A WMA,

Transmitted _ _-------==---=-- Per (Number)

rnme)

DOE

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196A-SF-93255

TPR:tpr

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T~h~e following investigation was conducted by SAr 'at San Francisco, California on March 26, 19~~'1

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r united states customs was contacted telephonically and was provided with information which ~a aoroDo to enter into the Treasury Enforcement Computer (TEe). l

agreed to enter the names of CONNIE C. ARMSTRO birth 6-9-54 U.S. Pass art number G611256 and ~nto

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date of

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the TEe system.

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also placed a notation to notify s~__~~ ______~Iirnrnedlately if either of the two were stopped by U.S~

Customs.

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