ustxtxb_obs_1971_02_12_50_00014-00000_000.pdf

Some fun dialogue Dallas By Michael Makris, the fabulous, twice-convicted con man who convinced Frank Sharp that he could get $200 million in securities out of Swiss banks. Makris: I started out by selling stoves, refrigerators and washing machines when I got married. Oh, by the way, I went to Texas A & M. * * * Q: When I say associated with, I mean how you came to be introduced to Mr. Sharp and what business you had with him. Makris: Simply by our Tidy Didy Diaper Service has an account in the Sharpstown Bank. I work for Tidy Didy. And the idea was to get a loan for Tidy Didy, which it never has come through. Hughes had the 34 affidavits taken by SEC investigators put in her library in the federal courthouse in Dallas and opened the library to reporters. Those who are familiar with the inhabitants of the federal courthouse in Dallas believe that had the case gone to any judge but Hughes, the affidavits would have been sequestered in the clerk’s office. Only one, possibly two reporters at a time would have seen them: only one affidavit at a time would have been released to a reporter so that cross-checking and searching for contradictions would be infinitely more difficult. It is not known whether Judge Hughes cherishes any particular fondness for the press that might have led her to this generosity. It is known that she is reputed to be quite severe with the perpetrators of white-collar fraud. And it is known that she is one of the few elected officials in the state \(she served as a state representative Dallas Q: What is Nationwide Investment Corp.? Dallas Johnson: It’s a California firm under considerable investigation by the SEC and the subject of some restraining orders. Presently it is in bankruptcy. Q: How did they happen to borrow $671,000 [from SSB] ? Johnson: Well, actually, they had borrowed $4 million.. .. * * * Q: What is JEB, Inc. Johnson: JEB was a corporation formed the initials stand for Joe, Eleanor and Betty. Joe is Joe Novotny. Eleanor is I forget Eleanor’s last name. She is secretary to Joe Ridings. Betty was Betty Jordan, secretary to Joe Novotny. The purpose of the company, the formation of the company, was to enable that company to borrow $500,000 each from the Community Savings & Loan Association of Fredericksburg [controlled by Ray Cowan and Jake Jacobson], First Savings & Loan at San Angelo [controlled by Cowan] and the Lubbock Savings & Loan Association at Lubbock [controlled by Cowan], making a total of $1.5 million. Then the money was used to lend to Sharpstown Realty Co., a million and a half dollars. The Sharpstown Realty Co. then pledged some acreage on the north side of the Sharpstown Country Club golf course to secure the loan. The million and a half was then used to pay off a loan with Associated Mortgage Investors that it had made on 10 acres plus the Sharpstown Music Theater. The Sharpstown Music Theater and the 10 acres was then pledged as collateral behind the Oak Forest Investment Co. loan to Sharpstown State of some $2.3 million. This was in addition to other collateral that we had behind that loan, part of which was released 14 The Texas Observer nickel more out of public office than her salary. Most of the state’s newspapers have taken a devil-may-care attitude on what would ordinarily be potentially libelous stories. But all the affadavits given to the SEC are a matter of public record. And most of those involved can be considered public figures. But one of the easiest ways to get one’s self into a libel suit is to impugn the ability or the integrity of a businessman and both are very much at stake in the SEC stock fraud case. It is interesting that while the businesmen have denied almost everything \(Sharp took the the politicians involved have admitted almost everything. They don’t deny they got the loans, bought the stock, made a profit, worked for the bill, etc. They only deny that there was the slightest connection. MI. on or about that time. The part that was released was some stock of National Bankers Life. Q: Do you know what was done with the stock? Johnson: It’s my recollection that at least part of the stock was used to pledge behind a loan at Dallas Bank & Trust in Dallas of the Sharpstown Realty Co. * * * Q: Nashwood Corp. acquired 10,000 shares of NDC from West Virginia Life, did you know that? Osorio: Yes, I know West Virginia, but that’s the same, you are playing with the same 30,000 all the way around and to track these things I think the only person that can help you is Mr. Don Akins. Q: Mr. Akins says he can’t remember. Osorio: Well, all I can give you is what I have knowledge of. Q: The trouble is you are talking about 30,000 shares but we have got pledged as collateral 70,000 shares of 011ie Crawford, 10,000 shares by Nashwood Corp., 4,000 shares by Audy Byram, 24,270 shares by Waggoner Carr. Osorio: But you see, those are repaid. It you will notice the schedules show those loans are closed out and reworked. Q: No, I have eliminated those. Osorio: Well, if you have, all I can give you is my recollection involves only 30,000 shares; 7,000 of 011ie Crawford and my 5,000. I don’t know about any other. Q: Did you know West Virginia Life acquired 10,000 shares of NDC from the Dallas Bank & Trust on May 27, 1969? Osorio: That’s right and that’s the same 10,000 shares. They were broken up into two or three different sections. Q: How can you have the same 30,000 shares of NDC stock securing indebtedness for Nashwood, Byrum, Carr and Franklin simultaneously and also securing indebtedness for West Virginia Life and whoever it was secured by? ** * Q: Where did you know Mr. Hancock from? Makris: I met him purely by accident on a plane, on a Braniff flight. ** * Makris: Oh, I have taken many trips to Zurich recently. Q: When is the last one, if you recall? Makris: A month ago. Q: And what was the purpose of that trip? Makris: Medicine. Q: Oh, I see. You went to get medicine or an operation, which is it? Makris: No, it’s treatment for my glands. Q: All right. On that particular trip did you happen to run into John Osorio? Makris: Oh, yes, on the airplane. Q: You just coincidentally happened to sit next to each other? Markis: Yes, TWA. Q: What did Mr. Osorio tell you his purpose was in going to Zurich? Makris: Oh, he was very nice. When he came to the seat he said, “Dam-gum, I thought a girl was going to sit next to me all the way. And I said, “Well, no, I’m sorry. I am a real boy.” ** * Q: Would you be surprised to learn that Governor Smith’s name does not show up on the transfer record of NBL? Quincy Adams: I sure would. ** * Q: Have you ever heard of the Bank of Sark? David Hoover: Everybody in the world has heard of the Bank of Sark. \(None of the reporters working on this case in Dallas had heard of it, no one we could find in the Federal Courthouse had heard of it, a call to Republic National Bank produced nothing. It is possible that Sark is a large, international bank based in Japan on which some of the people involved in this case had been ** * Q: What is Universal Magnetics, Inc.? Tom Max Thomas: It is a little dog is what it is. ** * Thomas: Yeah, Dempsey Tegler. Siboney had a tremendous number of outstanding shares, maybe 10 million or something like that. They had half of it. That’s a dog, too. ** * Mind-bending dialogue Q: What is Mike Wallace Classics, Inc.? Thomas: That was a company in St. Petersburg that Ric had contracted to purchase. That was a double dog.