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The long arm of ABSCAM reaches San Diego

This man would like some answers

Kai Gulve. “Kai is a Swede, and a Swede never breaks a promise." - Image by Craig Carlson
Kai Gulve. “Kai is a Swede, and a Swede never breaks a promise."

Where do you turn when you think the FBI is lying to you? When you think you've been conned, then framed, then ruined?

Joseph Meltzer. The FBI took on Meltzer, hoping to nab a corrupt county official.

“He has had to be so strong through all of this,” Noni Gulve said of the man she married thirty-six years ago. “Kai is a Swede, and a Swede never breaks a promise. What has happened to him, to us — the death threats, the bugged phones, the losses, the whole tragic thing — has been devastating.”

Richard Stanczyk. Stanczyk says he was told by an FBI agent there was no reason to believe Meltzer was a con man.

She paused as afternoon shadows stretched across the porch of her and her husband's mobile home in Santee. “For a long time,” she continued, “he sensed that something was taking place, some terrible secret outside the realm of our wildest imagination.

Prince Ali letter, December, 1978

As he began to piece it together, bells would ring and you’d say, ‘I wonder if . . . oh, my God! Do you suppose? No. It's impossible. No way. Can this be real?’ ” Her voice lowers; her natural animation vanished. “Kai went into shock when he realized that a United States government agency could not be trusted, had lied to him. And to tell a lie to a Swede — that was a terrible thing!”

Noni and Kai at Santee mobile home. "She was not a working woman, and now she has three jobs."

That lie cost Gulve a home on Erie Street overlooking Mission Bay, a successful brokerage business that specialized in international financing, his professional reputation, and millions of dollars in possible commissions. It also threatened to destroy his family life with wife Noni and their four children — Chris, Greta, Ingrid, and Eric — and it almost cost him his life.

Gulve (pronounced gull-vee) and three other businessmen — Richard Stanczyk, Sam Mature, and James Buderus — are suing the FBI, Chase Manhattan Bank, the U.S. Department of Justice. and others for a total of $900,000,000. Prior to 1980, the idea of suing the government was unthinkable to the fifty-nine-year-old, barrel-chested native of Sweden, who speaks five languages and whose patriotism for America proudly proclaimed itself on the red-white-and-blue, diagonally striped neckties he traditionally wore to work. And it was the last thing on his mind in the summer of 1978, when he went on a Kafka-esque odyssey around the globe while attempting to complete a major financial transaction in which every detail he witnessed was completely convincing, yet the various parts added up to an evanescent and ultimately ravaging whole.

Throughout the summer of 1978, Gulve met several times with representatives of Inter-Sea Fisheries, Inc. of San Diego, one of whose corporate directors was Jean Michael Cousteau, son of the famed oceanographer Jacques Cousteau. Inter-Sea planned to buy three large tuna ships and to equip them with unique refrigeration systems. The representatives asked Gulve if he would consider raising the major funding for the $90 million project. Gulve, whose work included investment counseling and “capital searches” (locating large amounts of money for business ventures like Inter-Sea’s), accepted the offer. In August Gulve was introduced by a friend to a San Diego man named H.B. “Scotty” Flink, who informed Gulve that a wealthy Saudi Arabian family was interested in the Inter-Sea project. Flink told Gulve that the family, headed by Emir Kambir Abdul Ramon and his two sons, would loan the money at a low nine-percent interest rate. Flink also told Gulve that the emir’s company, called the Foreign Investment Group, Ltd. and listed as a “successor” to another investment company, Abdul Enterprises, had offices in New York, London, Paris, Zurich, and Boynton Beach, a small community north of Miami, Florida. Flink said that the Boynton Beach office, which conducted business under the name of H&J Real Estate Investment to insure the privacy of the emir, was supervised by a man named Joseph Meltzer, whose wife was Flink’s cousin.

Gulve learned from Flink more details about the Saudi’s Foreign Investment Group; Flink offered references of existing clients, other references in New York that included the Chase Manhattan Bank which the accounts of the emir’s family were said to exceed $400 million), and a letter signed by the emir’s son Prince Ali naming Joseph Meltzer the sole United States representative for the company. “FIink told me I could contact any one of the references with the exception of Chase Manhattan,” Gulve says. “After providing my first project to FIG [Foreign Investment Group], they would notify the bank, and then I could call. That seemed reasonable. Otherwise, I’d call and check and they’d ask, ‘Who the heck are you?’ ” For the next three weeks Gulve researched all the information he received. “I could not find anything negative,” he recalls, “either in my talks with clients or from attorneys or from any other investigations I made. I even checked out H&J’s trust account in Boynton Beach — and, sure enough, the account did exist. The New York references, John McCloud and Myron Wagner [co-chairmen of the company’s board of directors in New York], were solid. Everything verified the existence of FIG.”

Satisfied that the company was legitimate. Gulve began searching for other business projects in need of funding. With so much money available, and at such an attractive interest rate, Gulve had no trouble locating a number of such businesses. Between September of 1978 and January of 1979, he submitted eighteen proposals to the Saudis, through their representative in Florida, Joseph Meltzer. Of these, the Foreign Investment Group directors approved seven. “It actually made me feel safe not to have them all accepted,” Gulve says. “I would have become suspicious if they had approved all of them. So they turned down eleven of my proposals. It was still a good record, and I was actually reassured by the percentage.”

The approved proposals were Inter-Sea, financing for a feature film, an ore-processing plant in Nevada, and four separate real estate and low-income housing projects in Samoa and the Virgin Islands. In each of these, the Saudis, in addition to lending money, planned to have a partnership interest; loans to Gulve’s clients would total more than $200 million. Initially, however, each of the seven clients had to deposit $10,000 into a trust account in Boynton Beach. The Foreign Investment Group would return this “good faith” money when the funding was completed. And if all these complicated transactions proceeded without serious problems, Gulve expected his commissions to total about five and a half million dollars. By December of 1978. two months after submitting his first proposal, Gulve was in daily phone contact with Meltzer, insisting that he wanted a meeting with the emir prior to the first funding in order that the v responsibilities of each party could be put in writing. Meltzer agreed, and on Christmas Day Gulve flew to Florida. “I wasn’t happy with the date,” Gulve says. “Our wedding anniversary is on. the twenty-eighth. But I told Noni that the meeting was too important to miss.” Gulve met Meltzer for the first time at 9:00 a.m. on December 26, a Tuesday.

Meltzer’s office in Boynton Beach consisted of two large rooms, outer and inner offices; its furnishings, though few, were expensive. Gulve met Meltzer. “He was grossly overweight,” Gulve recounts, “a person who had neglected to care for his teeth, and sloppily dressed — even for Florida.” Meltzer. who walked with a crutch because of a leg injury and who spoke with a Brooklyn accent, had arranged all of Gulve’s proposals neatly across a large mahogany desk, along with an unsigned contract. At 10:00 a.m. Prince Ali Ben Ramon, son of the emir, arrived in a Rolls Royce. Wearing a gray, pinstriped, three-piece suit, with gray shoes, shirt, and tie. Prince Ali spoke softly and with a British accent. He had studied at Cambridge, England. After signing the contract and other personal agreements, the prince apologized for the absence of his father. The emir, he said, had been delayed in Atlanta, Georgia on a bank purchase. Prince Ali then produced a newspaper article detailing his father’s business negotiations for the bank, as if to verify this claim. “I figured the emir was more important than I was,” Gulve says, “and I accepted the apology without comment.”

The meeting was devoted to methods of transferring funds, and it concluded positively. All that remained was for the accountants of the various clients to get together about details; the money would then be on its way.

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Inter-Sea Fisheries was Gulve’s first client scheduled to receive funding. Although Inter-Sea had hoped to get the money in one lump sum. the Saudi investors decided to transfer it in three stages: January 25, May 25, and September 25 — $30 million coming in each installment. To Gulve, the three-stage procedure suggested good business practice; it strengthened his confidence. On January 22, 1979, three days prior to the first funding date, Prince Ali phoned Gulve said there would be a five-day delay in the banking process. Ali also asked Gulve to fly to Georgetown, capital of the Cayman Islands — a tax haven in the British West Indies — to make preparations for the transfer of funds.

Gulve’s years of experience in international financing had taught him that such delays were inevitable; the transfer of vast amounts of money could take upwards of a year, he knew, so without complaint, he flew to Georgetown on Grand Cayman Island. The money didn’t show. He flew to Del Rey Beach. Florida for more meetings with Meltzer. Prince Ali, and the prince’s younger brother. Again the emir was absent, but for the first time he spoke directly to Gulve. Over the telephone, the emir promised that the funding was nearing completion and asked Gulve to fly to New York for a face-to-face meeting. But when Gulve arrived, the emir was gone. Unexpectedly, Prince Ali then phoned from London, asking Gulve to make a special trip to England to tie up some final loose ends.

Meltzer had offered explanations for the delays, and they seemed plausible to Gulve: political turmoil in Saudi Arabia (which Gulve had been reading about in newspapers) and banking snarls in Switzerland. for example. At least some money already had been sent to Inter-Sea (a check for $100,000 to cover initial expenses), and that helped to assuage Gulve’s growing impatience. Meltzer agreed with the two young princes that if Gulve would only meet with the emir, all promises could be confirmed and Gulve would receive the reassurance he was seeking. But Gulve always seemed one city short of the phantomlike emir. Always there was a logical explanation.

One of Gulve’s common practices, not followed generally in his work, was to reveal the sources of funding to his clients (to do so often results in the broker losing his function as an intermediary). Thus Gulve’s clients had also been in contact directly with Meltzer and the Saudi family, and they were convinced that the delays were understandable, given the political problems in Saudi Arabia. At the London Hilton on February 28, however, Gulve began to lose some of his own conviction. After flying from New York at Prince Ali’s request, Gulve found he could not meet with the prince, who left word that further complications with money transfers forced him to fly immediately to Switzerland in an effort to solve the problem

While still at his London hotel, Gulve received a startling telephone call: the man on the other end of the long-distance line claimed to be Crown Prince (now King) Faud of Saudi Arabia. “This voice did not belong in my library of voices,” Gulve says, “so I didn’t know whether to believe it or not. He spoke slowly and with a distinct accent. He said the emir had asked him to call and explain that although the government was currently scrutinizing the business dealings of Saudi families in America, the funding from the emir’s investment group would indeed take place in a very short time. ‘Don’t be concerned,’ the voice said, ‘just exercise patience.’ Well, mine was running out. So was my money.” (Gulve had not yet received a penny in commissions.) “It was hard to believe that a crown prince would make such a call. So on March first I decided it was time to leave London, go back to New York, and ask Chase Manhattan Bank just what the heck was going on!”

Exhausted from his travels, Gulve arrived in New York on March 2. He stayed at the Hilton and called Chase Manhattan, “the people I was not supposed to call” during the initial agreement. With seven projects awaiting funding, Gulve felt he was now qualified to make direct inquiries at the bank, but for four days he couldn't get through to Michael Elzay, vice president of Middle East accounts. On the fifth day. Gulve used subterfuge: he called the bank and asked, “Mike in? Mike Elzay?” — as if he were a close friend. Elzay came on the line and assured Gulve that he knew all about Joseph Meltzer. the Foreign Investment Group, and the various projects. Elzay claimed that the Saudis had recently made a number of investments, which was why their funds were low at the moment. He added that he would inform Gulve personally as soon as the funds were replenished in the account. “Elzay said he could recite from his papers precisely what was due each client — and he did! — and came within one hundred dollars of the actual figure! Pretty good, I thought. One of the top men in one of the largest banks in the world had confirmed everything — that the Ramons were real Saudi oil people, that the accounts did exist, and that they were good for in excess of $400 million. That made me feel great! I felt I was — how do they say on TV? — in the good hands of Allstate. Never fear. Chase is here. You know?”

On March 16, almost two months after the first transfer of money was to have occurred, Gulve received calls from Meltzer and Prince Ali. They said the funding had gone directly from Switzerland to the Scotia Bank on Grand Cayman Island, thus bypassing Chase Manhattan. Meltzer told Gulve to bring his clients first to the Intercontinental Hotel in Miami, and then to the Caymans. Gulve felt he was close, not only to the completion of the protracted money transfer, but also to the commissions he would earn. The only apparent drawback was that he couldn’t phone the Scotia Bank in Georgetown to verify that the money was there. (The Caymans are located sixty minutes by jet south of Miami, and in a four-block area of Georgetown. the capital of the islands, 220 banks do a flourishing business — free from income, profits, capital gains, and estate taxes. In fact, there is no taxation at all. save for a yearly tax of two dollars on all males over eighteen. “One of the laws of those four blocks of banks is that no one is allowed to reveal any banking matters.“ Gulve says. “Do it and you get a twenty-year jail sentence. Silence is the word. So I had to rely on Meltzer’s claim that the money was there.”)

Gulve had become physically ill from months of travel, jet lag, different foods and climates, and the pressures of concluding the transaction. Because he had begun to experience frequent fainting and dizzy spells, Gulve asked his wife Noni and a friend named Lehrman to accompany him on the trip to Miami and the Caymans. Client Sam Maturo, seeking financing for a movie he planned to produce — called Beyond the Black Hole — traveled with them. After they checked into the Intercontinental Hotel in Miami, Joseph Meltzer invited them to a lavish dinner party at the hotel.

During the dinner, Meltzer passed around the table what he laughingly called bogus twenty-dollar bills, suggesting that they were available in large quantities at tremendous discount. Intent on the next day’s work in the Caymans, Gulve paid little attention to Meltzer's uncouth (and potentially criminal) display. “I thought he was joking,” Gulve says. “The presentation was made in front of many people in the room — loudly. I didn’t believe his joke. And anyway, why would I or anyone else at the table want to get involved in such a thing? There was so much to keep track of that a twenty-dollar bill didn’t mean much then.”

On March 19, anticipating the conclusion of this long ordeal, Gulve’s party checked into the Holiday Inn on Seven Mile Beach, Grand Cayman Island. Four other clients had arrived earlier and were staying at other hotels. For six days Gulve and his clients were on the phone, talking to the emir, Prince Ali, and Meltzer in Florida. Calls came in. day and night, but the money didn’t. Gulve became furious. He instructed his wife and clients to return home. Then he and Lehrman flew back to Florida and checked into the Marina Motor Inn in Fort Lauderdale. From there they drove a rented car to Meltzer’s office in Boynton Beach. Meltzer was alone, save for two men who appeared to be body guards.

Gulve burst into the office and demanded a meeting with the emir and the prince immediately. “I had had it,” Gulve recalls. “I said if I didn’t see both of them in the next twenty-four hours I would call the U.S. Attorney’s office in Florida and would tell him to arrest those crooks!” Gulve also wanted to sneak a look at his files in Meltzer’s front office, to see if they were in order. So while Lehrman kept Meltzer and his “bodyguards” busy in the inner office, Gulve went to the outer office to cool down, he claimed — and surreptitiously picked up his files.

When Gulve and Lehrman returned to teir motel in Fort Lauderdale, Meltzer phoned and angrily demanded to know’ what Gulve had done with the files. “I want to review them tonight,” Gulve replied. “They’re my property, you know?” Meltzer ordered Gulve to return them the next day and added that Prince Ali would call soon. When the prince did call the motel, Gulve was aggressive. “It was a bloody telephone fight. I shouted at that man, I said I wanted evidence of who he was, what government he worked for, I told him I thought he was an impostor — a fake! I was so mad it was unbelievable!” The prince calmly insisted that Gulve would have to apologize to the emir for making such preposterous accusations, which could lead to an international incident.

Angry and exhausted, Gulve slammed down the receiver. Too tired to check the files that night (a later look proved them to be in order), Gulve badly needed to sleep.

Because his clients were phoning all evening, Gulve asked Lehrman, who was staying in an adjoining room, to switch rooms for the night and answer the calls. Lehrman agreed. At midnight, the phone rang. Before Lehrman had a chance to identify himself, the voice on the phone said. “Gulve? We just want you to know that tonight is your last night on earth — alive!”

“Kai!” Lehrman shouted, waking Gulve. “Your life’s been threatened. You’d better get the hell out of here. Now."

“Bring the car keys,” Gulve shot back, “and I’m gone!”

Gulve got into the rented car alone. If someone wanted to kill him. he reasoned coolly, there was no sense in taking his friend along. He fled up the coast for fifteen miles, looking for a motel with a vacancy — and for headlights closing in the rearview mirror. Two motels were full, a third had vacancies, and he checked in using a pseudonym. Inside the motel room, he phoned his wife in San Diego. “Noni? My life’s been threatened,” he blurted out. “If you don’t hear from me again. I want you to know why now.” He explained the death threat and told her how to facilitate the transfer of funds, should it ever be carried out; he also told her how much he loved her. “1 was petrified,” Noni Gulve says today. “It was so shocking. And there was nothing I could do. Nothing but pray. ... It was frightening. I’ll never forget that call from Florida.”

The next day Gulve drove cautiously to the airport, caught a plane, and returned to San Diego. On the plane, fearful that the person in the next seat could be a paid assassin, a thousand questions flooded Gulve’s mind. Since the dubious phone call from the alleged Crown Prince Faud, Gulve had become suspicious of the Foreign Investment Group and the whole operation. But everything was so real — all the references, the numerous clients, the offices around the country (and in London), and especially Michael Elzay’s firm reassurances at Chase Manhattan Bank that Meltzer and the Ramon family were genuine. The business couldn’t be phony, Gulve thought. Or could it? What was real and what was not began to coalesce in a vertiginous blur.

At 5:15 the morning after his return to San Diego, the phone rang in Gulve’s home. At the other end of the line the emir’s familiar voice attempted to mollify Gulve, apologizing for all the delays and for Prince Ali’s behavior. The emir added that the money would soon be on its way. An incredulous Gulve erupted: “Mister, I don’t know who you are, but I think you’re a fraud! My clients have put $55,000 into the Boynton Beach trust account. That’s not enough money to cover your travel and phone bills alone — not to mention your son’s Rolls Royce. I can’t understand how you are making any money at all in this fraudulent scheme. But I’m sure you’re a fake.” The emir calmly attempted to reassure Gulve that everything was legitimate. He called back three hours later with the same assurances.

Later that morning Gulve went to his office at 2550 Fifth Avenue in Hillcrest, the building topped by Mr. A’s restaurant. The first news he learned was dismal: Meltzer’s $100,000 check to Inter-Sea had bounced. There were also numerous telephone messages from a man named Jason — whom Gulve didn’t recognize and whose name has been changed here — requesting immediate contact. The pink message slips were dated and showed that this man Jason had been calling for the last fourteen days — almost to the day that Gulve, his wife, and clients had arrived at the Intercontinental Hotel in Miami. Intent on recovering his health, and — frustratingly — on tracking down what had happened to Meltzer’s check, Gulve paid no attention to Jason’s messages for about ten days. Gulve finally phoned the man. Jason, without elaboration, said he needed Gulve’s services, and the two agreed to have lunch at Stuart Anderson’s restaurant on Sports Arena Boulevard. Gulve gives this account of what then happened:

“He picked me up,” says Gulve, “which was mistake number one. Always take your own car.” Jason, well dressed and in his early thirties, was edgy and nervous to the point of irritability. The conversation in the car was neutral, nothing about business, and Gulve began to wonder what the man really wanted. The talk remained that way in the restaurant, broken only by Jason’s repeated trips to a phone booth — three in all — returning to claim, “It’s just one of those days.” “Do you have a problem?” Gulve asked, annoyed by the man’s jittery behavior and frequent trips to the phone booth.

Jason replied that he had made a legal mistake.

“Is it serious? Should I be sitting here with you?”

“Not that serious,” Jason said, fumbling with a napkin. “I was an insurance agent, used my company’s trust fund money, and got audited.”

“This lunch is over," Gulve announced. “Take me back to my office.” Jason’s nervousness continued in the car. Suddenly, about two miles from Gulve’s Hillcrest office, Jason got to the point. He told Gulve he wanted to buy some of the twenty-dollar bills Gulve had available. Gulve had no idea what Jason was talking about. “What twenty-dollar bills?”

“The counterfeit money you were told you could buy in Florida, having dinner with Meltzer-schmeltzer, or whatever.” “Who told you this?’’ Gulve demanded.

“The guy who wants to buy them.” “Who are you working for? The same guys who tried to kill me in Florida? Stop this damn car! I’m getting out!”

Gulve scrambled out of the car and watched it warily as it disappeared down the road. He returned to his office on foot. “What the hell just happened to me?” he asked himself, both stunned and bewildered by his encounter with Jason. “Some SOB just tried to put me in a compromising situation — with counterfeit money. But why? And how could he have learned about the money?” Gulve had no answers.

After he reached his office, Gulve says he called several friends, one of whom was a San Diego attorney who, according to Gulve, had “connections” with the police and the local FBI office. The attorney said he’d look into the matter and would report back later that evening.

At 7:00 p.m. Gulve says he met with his friend the attorney in the lobby of a hotel. The attorney, whose name Gulve will not divulge for fear of putting the man in jeopardy, had gathered alarming, almost unbelievable information: somehow the FBI was involved with someone Gulve was doing business with in Florida. “They’re trying to frame you,” the attorney said calmly of the FBI. “For what reason I don’t know.” Gulve claims the friendly attorney confided more of what he’d learned: Jason was on parole from prison and had agreed to work undercover for the FBI; Gulve was his first project — which Jason kept bungling and had to phone in to find out how to proceed. The attorney added that Jason had been “wired” for sound during the lunch at Stuart Anderson’s. Gulve says his friend would not reveal his sources for these incredible revelations.

Today Gulve recalls his utter confusion after that meeting with his well-connected friend. Meltzer and the Foreign Investment Group appeared more suspicious than ever, but Gulve had only more questions, and no answers. “I knew something was going on,” Gulve says, “But the Ramons and Meltzer — all their answers were so slick, their stories letter perfect. Only the emir on the phone would sometimes mess up with the facts. Otherwise everything was so believable that it was impossible to figure out. When the attorney told me — then I knew that either Meltzer was a crook hunted by the FBI or that he was working for them. But which? And why was I caught in the middle?” On May 10, 1979, Gulve at last scheduled a meeting with the emir in Phoenix, Arizona. Surely, he felt, finally confronting this spectral entity would answer a number of questions.

The emir failed to appear in Phoenix, and for the next six months, though he still worked on the Saudi projects, Gulve sought other sources of funding for his clients, whom he advised against dealing further with Meltzer and the Foreign Investment Group. Gulve’s searches, however, were unsuccessful, in part, he says, because he could never explain to new potential investors what had gone wrong with the Saudis. During this period, Gulve also experienced the continual sensation that government agents were following him. “I became almost a hypochondriac — mentally. Paranoid. That’s it. I’d meet a friend. First thing I’d ask, ‘Are you with the FBI?’ ”

By the end of 1979, Gulve’s money — spent on approximately forty plane flights, at least as many hotels, and on astronomical phone bills — was running out, as was the collective spirit of his family. The children argued among themselves, facing tensions from unknown causes. And Noni Gulve found herself increasingly torn in the late months of 1979. “My major concern throughout all of this,” she says, “was the pressure on Kai. How could he continue? How could he survive? I was outside and inside of it. I could be objective, in one sense, and see it as some terrible secret I had to find out about. I couldn’t believe that the FBI, our trusted FBI, could do such things. That was unthinkable. But as Kai’s wife, I was also inside, I was involved. My future was being controlled by this.”

On Saturday, February 2, 1980, ABSCAM made headlines. The FBI had set up a fake emir (Kambir Abdul Rahman) and a sham company, Abdul Enterprises, both promising to invest huge amounts of Saudi dollars in America. The aim was to expose corruption in high political offices. With the aid of con man Mel Weinberg, the FBI had arranged an elaborate and expensive scam operation — a two-year-long sting that resulted in sixteen men. including seven members of Congress, being charged with bribery and conspiracy for accepting covert monies from the “emir” and other representatives of Abdul Enterprises. Kai Gulve read the news reports and remembers saying to himself, “Thank God we weren’t involved in this thing.” But five months later federal agents arrested Joseph Meltzer and filed fifteen charges against him, including mail fraud and interstate transportation of securities taken by fraud. The newspapers linked Meltzer with ABSCAM. “I was totally deflated by the new knowledge about Meltzer and ABSCAM,” Gulve recalls. “The most devastating effect — like slaughtering a calf by hammering it in the brains — was that almost two years of your life, all that time and all that money, had gone down the drain — for cons! Hired by the FBI! My God! I wanted to go back to Sweden. That’s how disgusted I was. It’s impossible to explain. . . .”

By the spring of 1980, Gulve’s savings had been depleted. He had lost at least $60,000 of his own money for expenses and had borrowed from friends for the year and a half he had worked without an income. Bills piled up, collection agencies appeared at his door. Because his reputation among colleagues as an honest businessman had been tarnished by his association with ABSCAM (word of the debacle spread quickly throughout the local investment community), Gulve says he had problems finding new clients. To pay off debts, he sold his home on Erie Street, plus a yacht, cars, and other personal properties. And still sensing that agents were following him, that his life was in danger, Gulve and his wife in the fall of 1980 moved to a mobile home in Santee — "to escape," as he says. The move, from the heights overlooking Mission Bay to a mobile home park, was a crushing symbol to Gulve. He had fallen far. very far. One night in the winter of 1981, he decided to complete his descent.

In the middle of the night, Gulve grabbed his .22 caliber rifle and went into the darkened kitchen of his mobile home. He shoved a clip of bullets into the magazine. "I was really desperate,” he says, looking back painfully. "I had been considering it — how to do it — all the time. The thought was very strong.” Thinking that the clip was positioned correctly in the rifle, Gulve stuck its barrel end into his mouth and pulled the trigger.

The trigger clicked but the bullet didn’t fire. The clip was crooked. Gulve furiously rapped the clip with his right hand, jamming it into place in the dark. To test whether or not it was in the correct position. he aimed the rifle at the ceiling and pulled the trigger. The gun fired with a loud bang. The bullet flashed past his right ear and punched a hole into the ceiling. "That stopped me,” he says. "I knew then that I wasn't ready to die.”

Gulve’s decision to live has presented a grim irony. Joseph Meltzer, the man whose exploits brought on the suicide attempt. and whose courtroom testimony could be crucial to Gulve’s vindication, is reportedly dying of cancer in the federal penitentiary at Lewisburg, Pennsylvania. Who is Meltzer, and what was his connection with the FBI’s caper? The story gets shady at the center. San Diego-based Assistant U.S. Attorney Robert Rose, who spent five months piecing together the history of Meltzer’s scam before filing the fifteen-count indictment against him. provides this chronology:

In May of 1978, Meltzer was sentenced by a Florida judge to two and a half years in prison for attempting to sell a million dollars’ worth of stock certificates stolen from the McDonald Corporation. Meltzer remained free on bail while his conviction was being appealed. Shortly after his sentencing, Meltzer reportedly contacted local FBI agents in Florida to complain that he was being victimized by loan sharks who were pressing him to pay off debts he owed them. At some point during this contact, according to Rose, Meltzer offered to become an informant for the bureau; Rose says Meltzer claimed to have information regarding corruption among county commissioners in the West Palm Beach area. Rose speculates that Meltzer’s motivation was twofold: cooperation with the FBI in successful prosecutions could mean a quid pro quo reduction of Meltzer’s prison sentence, and being an informant might also provide some income to Meltzer. who was already in debt to the loan sharks. The FBI took on Meltzer, hoping to nab a corrupt county official.

Meltzer’s connections to East Coast underworld figures led to more possibilities in his new job as informant. The bureau wanted to infiltrate an East Coast network of crooks who were buying and selling stolen property, and Meltzer’s criminal associates were potential targets. While making inquiries among these friends, in his role as informant, Meltzer learned of Abdul Enterprises, the phony company set up by the FBI. Neither federal attorney Rose nor the FBI will discuss Meltzer’s knowledge of Abdul Enterprises — how he learned about it, from whom, whether he knew it was part of ABSCAM, or whether Meltzer was asked by the bureau to become an integral part of it — but Rose does say that Meltzer used this knowledge to set up his own scam, while still working for the FBI on the alleged political corruption in Florida.

Because of his reputation on the East Coast as a con man, Meltzer decided to concentrate his illegal scheme in the West, primarily in Southern California, and San Diego in particular. Rose’s research has led him to believe the scam began in earnest about July 4, 1978, when Meltzer’s wife visited her mother here. Meltzer had created H&J Real Estate Investment, agents for the equally fictitious Foreign Investment Group, Ltd., representing the emir and his family. He promoted the emir’s company as “successor” to Abdul Enterprises.

H.B. “Scotty” Flink, a cousin to Meltzer’s wife, was engaged to set up an office here, which he did at 2731 Shelter Island Drive. Flink's job was to find businessmen who were in need of cash and then to put them in touch with Meltzer. Kai Gulve was among at least eleven San Diegans who met Flink and, through him, began negotiations with Meltzer.

Prosecutor Rose claims that Meltzer’s formal association with the FBI as an informant ended about September of 1978 after nothing came of Meltzer’s efforts to reveal government corruption in Florida. Others, including Gulve and syndicated columnist Jack Anderson, believe this is not true. According to their scenario, Meltzer continued to work for the FBI in some capacity related directly to the ABSCAM operation, while simultaneously conducting his own scam — with the knowledge, if not the approval, of the FBI. Furthermore, Gulve and Anderson contend that for months the FBI actually helped to cover up Meltzer’s operation, for this reason: to expose Meltzer early as a fraud would have risked exposing ABSCAM itself, long before its conclusion in February of 1980. Thus, with the help of the FBI, Meltzer was allowed to steal an estimated $150,000 in “good faith money” from people like Kai Gulve.

In June of 1979, almost a year after Meltzer began his scam and just a few weeks after Gulve’s last attempt to meet the emir (in Phoenix), Scotty Flink complained about Meltzer to the San Diego office of the FBI. His complaint, the details of which are not known publicly, was soon followed by others, among them calls from one of Gulve’s clients — Inter-Sea’s representative Richard Stanczyk. Stanczyk, a former Internal Revenue Service investigator and an accountant who had joined Inter-Sea as a consultant, says he spoke with a local FBI agent who told him that the bureau had no file on Meltzer, or that if there had been a file, it could not be located. In any event, Stanczyk says he was told there was no reason to believe Meltzer was a con man.

Stanczyk persisted with his complaints in the following weeks, however, and the agent began to conduct interviews with local people involved with Meltzer. The agent contacted Gulve — three times between June and October of 1979 — twice coming to Gulve’s home. The interviews ostensibly concerned Meltzer’s suspicious activities, but Gulve says he never knew this with certainty, and his paranoia increased — the FBI was trying to find out how much Gulve knew about Meltzer, but for what reason?

Columnist Jack Anderson offers this explanation for the San Diego FBI’s actions: not only did the bureau arrange for Chase Manhattan Bank’s Michael Elzay to lie to Gulve and his clients in order to protect Meltzer’s scam, but the complaints from Scotty Flink, Richard Stanczyk, and others were actually relayed to Meltzer directly by the FBI, presumably to warn Meltzer that he was causing trouble. The nervous queries from Stanczyk were of such concern to the bureau, Anderson says, that federal agents conducted a raid on the offices of Stanczyk’s company. Inter-Sea Fisheries, located in the same Hillcrest building as Gulve’s office. The raid took place on Halloween night, 1979. Though the FBI confiscated numerous files and publicly announced that some Inter-Sea officials had been arrested, no arrests were made and no charges ever were filed. Stanczyk and his company suffered, though. The publicity resulting from the FBI’s raid is credited with putting Inter-Sea out of business and driving Stanczyk to bankruptcy and close to suicide. (Stanczyk says today that the personal and financial pressures on his life — which persist to this day — led to a divorce, severe depression, the loss of more than $200,000. and cost him his credibility as an honest businessman.)

Though the first complaints about Meltzer were received by the FBI here in June of 1979, the bureau did not present to the U.S. Attorney’s office evidence of Meltzer’s fraud until the first week of February, 1980, after ABSCAM was completed. This delay, and its timing, serves Anderson’s and Gulve’s theory that the bureau was deliberately stalling and misleading Gulve and the others in an effort to protect Meltzer. Surely, this theory goes, the local FBI could have and should have checked with the FBI in Florida regarding Meltzer. A simple phone call would have provided the information that Meltzer was a convicted felon, a notorious con man, and an FBI informant with knowledge of Abdul Enterprises, phony Arabs, and elaborate sting operations. Yet the San Diego FBI said it knew nothing about Meltzer. Certainly by October, five months after Flink’s complaint and after the third time Gulve had met with an FBI agent at his home, Gulve should have been given emphatic warnings that Meltzer was untrustworthy. In fact, Gulve and Anderson would insist that Meltzer should have been arrested much earlier than that. Because of Gulve’s pending lawsuit against the FBI and the department of justice, the bureau, both in San Diego and in Washington, D.C., refuses to comment in any way about Meltzer’s involvement.

Years ago, when he proudly received his U.S. citizenship, Gulve would have found it incomprehensible that a federal agency would lie to him and that he would someday be suing the government. But his disillusionment today is profound and cynical: he is now convinced that the San Diego office of the FBI tried to trap him into committing a crime by enlisting the aid of the mysterious, bungling parolee Jason. “If I would have put this guy in touch with Meltzer, I would have been dead,” says Gulve. “The FBI wanted me to do the selling, but it didn’t work. I could have gotten ten years in jail, and it would have gotten rid of me at a very convenient time. So don’t tell me the FBI wasn’t aware of this ‘Son of ABSCAM.’ They were orchestrating it!”

“It is unbelievable that we have made it,” Gulve says today. “We’re still living pretty much hand-to-mouth, but that’s a far cry from where we were. I have to give Noni 500 percent of the credit. She was not a working woman, and now she has three jobs. Excuse me.” Gulve rises from a couch and answers the phone in the living room of the family’s mobile home. It is a business call. Gulve, who has worked for commodities dealerships in the last year, is attempting to find a job in the insurance business. Prior to working in international financing, Gulve had been an insurance executive for twenty-two years. The irony — a former executive now seeking employment as an agent — is not lost on Noni Gulve. “It’s a staggering thought to think that at age sixty you must start from scratch.” she says. “It is awesome to lose everything you had and have to begin again. And the disillusionment — about the whole thing. We knew we either had to change our values — all of them — or decide to take a stand, even if it meant personal danger. I’m glad we took the stand.”

On February 4 of this year, almost two years to the day that ABSCAM gained prominence, Gulve, Richard Stanczyk, and two other businessmen testified before a congressional subcommittee investigating the FBI’s procedures during ABSCAM. Along with Washington attorney Robert J. Flynn, who will represent the four men in court (possibly later this year), each man testified that his life had been devastated by Joseph Meltzer scam and the FBI’s failure to inform him of the truth. “That was a very difficult time,” Noni Gulve recalls. "We were never really certain what would happen to us. Our most difficult decision was: should Kai go to Washington? Our phone had been tapped for over a year. [Chief ABSCAM con man] Mel Weinberg’s wife had died mysteriously. We knew there was danger. But Kai decided he must go. Not just for him but for his clients, too — to put his statement on the public record. It was such a relief when he returned.”

Gulve returns to the table. “How’d it go?” his wife asks.

“So-so,” Gulve replies, “but there weren’t any crackles or strange noises on the phone. There haven’t been any for the last month. You know?” he says, turning to me, “I’ve had my phone changed three times. The bugs on the line got so I couldn’t hear anything except for a tape clicking off a reel. I was in the Swedish Air Force, in communications. I know the sound of a tape needing to be recycled when they roll off the wheel. So sometimes I'd get sarcastic. I would say into the phone to whoever was working the bug, ‘Would you please get your new tape secured and functioning so I can continue my conversation?’ ” Finally, Gulve says, the phone company sent out a man to check on these strange noises. The repairman called the main office and Gulve says the office told their man that the mobile home’s phone was not hooked up to the main trunk. Gulve picks up the exchange from there:

“We don’t know where your wires are going, sir,” the repairman said, “but they aren’t going to where everyone else’s go. ” “They’re going to the FBI.”

“You in trouble?”

“No. The FBI is.”

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Jazz guitarist Alex Ciavarelli pays tribute to pianist Oscar Peterson

“I had to extract the elements that spoke to me and realize them on my instrument”
Kai Gulve. “Kai is a Swede, and a Swede never breaks a promise." - Image by Craig Carlson
Kai Gulve. “Kai is a Swede, and a Swede never breaks a promise."

Where do you turn when you think the FBI is lying to you? When you think you've been conned, then framed, then ruined?

Joseph Meltzer. The FBI took on Meltzer, hoping to nab a corrupt county official.

“He has had to be so strong through all of this,” Noni Gulve said of the man she married thirty-six years ago. “Kai is a Swede, and a Swede never breaks a promise. What has happened to him, to us — the death threats, the bugged phones, the losses, the whole tragic thing — has been devastating.”

Richard Stanczyk. Stanczyk says he was told by an FBI agent there was no reason to believe Meltzer was a con man.

She paused as afternoon shadows stretched across the porch of her and her husband's mobile home in Santee. “For a long time,” she continued, “he sensed that something was taking place, some terrible secret outside the realm of our wildest imagination.

Prince Ali letter, December, 1978

As he began to piece it together, bells would ring and you’d say, ‘I wonder if . . . oh, my God! Do you suppose? No. It's impossible. No way. Can this be real?’ ” Her voice lowers; her natural animation vanished. “Kai went into shock when he realized that a United States government agency could not be trusted, had lied to him. And to tell a lie to a Swede — that was a terrible thing!”

Noni and Kai at Santee mobile home. "She was not a working woman, and now she has three jobs."

That lie cost Gulve a home on Erie Street overlooking Mission Bay, a successful brokerage business that specialized in international financing, his professional reputation, and millions of dollars in possible commissions. It also threatened to destroy his family life with wife Noni and their four children — Chris, Greta, Ingrid, and Eric — and it almost cost him his life.

Gulve (pronounced gull-vee) and three other businessmen — Richard Stanczyk, Sam Mature, and James Buderus — are suing the FBI, Chase Manhattan Bank, the U.S. Department of Justice. and others for a total of $900,000,000. Prior to 1980, the idea of suing the government was unthinkable to the fifty-nine-year-old, barrel-chested native of Sweden, who speaks five languages and whose patriotism for America proudly proclaimed itself on the red-white-and-blue, diagonally striped neckties he traditionally wore to work. And it was the last thing on his mind in the summer of 1978, when he went on a Kafka-esque odyssey around the globe while attempting to complete a major financial transaction in which every detail he witnessed was completely convincing, yet the various parts added up to an evanescent and ultimately ravaging whole.

Throughout the summer of 1978, Gulve met several times with representatives of Inter-Sea Fisheries, Inc. of San Diego, one of whose corporate directors was Jean Michael Cousteau, son of the famed oceanographer Jacques Cousteau. Inter-Sea planned to buy three large tuna ships and to equip them with unique refrigeration systems. The representatives asked Gulve if he would consider raising the major funding for the $90 million project. Gulve, whose work included investment counseling and “capital searches” (locating large amounts of money for business ventures like Inter-Sea’s), accepted the offer. In August Gulve was introduced by a friend to a San Diego man named H.B. “Scotty” Flink, who informed Gulve that a wealthy Saudi Arabian family was interested in the Inter-Sea project. Flink told Gulve that the family, headed by Emir Kambir Abdul Ramon and his two sons, would loan the money at a low nine-percent interest rate. Flink also told Gulve that the emir’s company, called the Foreign Investment Group, Ltd. and listed as a “successor” to another investment company, Abdul Enterprises, had offices in New York, London, Paris, Zurich, and Boynton Beach, a small community north of Miami, Florida. Flink said that the Boynton Beach office, which conducted business under the name of H&J Real Estate Investment to insure the privacy of the emir, was supervised by a man named Joseph Meltzer, whose wife was Flink’s cousin.

Gulve learned from Flink more details about the Saudi’s Foreign Investment Group; Flink offered references of existing clients, other references in New York that included the Chase Manhattan Bank which the accounts of the emir’s family were said to exceed $400 million), and a letter signed by the emir’s son Prince Ali naming Joseph Meltzer the sole United States representative for the company. “FIink told me I could contact any one of the references with the exception of Chase Manhattan,” Gulve says. “After providing my first project to FIG [Foreign Investment Group], they would notify the bank, and then I could call. That seemed reasonable. Otherwise, I’d call and check and they’d ask, ‘Who the heck are you?’ ” For the next three weeks Gulve researched all the information he received. “I could not find anything negative,” he recalls, “either in my talks with clients or from attorneys or from any other investigations I made. I even checked out H&J’s trust account in Boynton Beach — and, sure enough, the account did exist. The New York references, John McCloud and Myron Wagner [co-chairmen of the company’s board of directors in New York], were solid. Everything verified the existence of FIG.”

Satisfied that the company was legitimate. Gulve began searching for other business projects in need of funding. With so much money available, and at such an attractive interest rate, Gulve had no trouble locating a number of such businesses. Between September of 1978 and January of 1979, he submitted eighteen proposals to the Saudis, through their representative in Florida, Joseph Meltzer. Of these, the Foreign Investment Group directors approved seven. “It actually made me feel safe not to have them all accepted,” Gulve says. “I would have become suspicious if they had approved all of them. So they turned down eleven of my proposals. It was still a good record, and I was actually reassured by the percentage.”

The approved proposals were Inter-Sea, financing for a feature film, an ore-processing plant in Nevada, and four separate real estate and low-income housing projects in Samoa and the Virgin Islands. In each of these, the Saudis, in addition to lending money, planned to have a partnership interest; loans to Gulve’s clients would total more than $200 million. Initially, however, each of the seven clients had to deposit $10,000 into a trust account in Boynton Beach. The Foreign Investment Group would return this “good faith” money when the funding was completed. And if all these complicated transactions proceeded without serious problems, Gulve expected his commissions to total about five and a half million dollars. By December of 1978. two months after submitting his first proposal, Gulve was in daily phone contact with Meltzer, insisting that he wanted a meeting with the emir prior to the first funding in order that the v responsibilities of each party could be put in writing. Meltzer agreed, and on Christmas Day Gulve flew to Florida. “I wasn’t happy with the date,” Gulve says. “Our wedding anniversary is on. the twenty-eighth. But I told Noni that the meeting was too important to miss.” Gulve met Meltzer for the first time at 9:00 a.m. on December 26, a Tuesday.

Meltzer’s office in Boynton Beach consisted of two large rooms, outer and inner offices; its furnishings, though few, were expensive. Gulve met Meltzer. “He was grossly overweight,” Gulve recounts, “a person who had neglected to care for his teeth, and sloppily dressed — even for Florida.” Meltzer. who walked with a crutch because of a leg injury and who spoke with a Brooklyn accent, had arranged all of Gulve’s proposals neatly across a large mahogany desk, along with an unsigned contract. At 10:00 a.m. Prince Ali Ben Ramon, son of the emir, arrived in a Rolls Royce. Wearing a gray, pinstriped, three-piece suit, with gray shoes, shirt, and tie. Prince Ali spoke softly and with a British accent. He had studied at Cambridge, England. After signing the contract and other personal agreements, the prince apologized for the absence of his father. The emir, he said, had been delayed in Atlanta, Georgia on a bank purchase. Prince Ali then produced a newspaper article detailing his father’s business negotiations for the bank, as if to verify this claim. “I figured the emir was more important than I was,” Gulve says, “and I accepted the apology without comment.”

The meeting was devoted to methods of transferring funds, and it concluded positively. All that remained was for the accountants of the various clients to get together about details; the money would then be on its way.

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Inter-Sea Fisheries was Gulve’s first client scheduled to receive funding. Although Inter-Sea had hoped to get the money in one lump sum. the Saudi investors decided to transfer it in three stages: January 25, May 25, and September 25 — $30 million coming in each installment. To Gulve, the three-stage procedure suggested good business practice; it strengthened his confidence. On January 22, 1979, three days prior to the first funding date, Prince Ali phoned Gulve said there would be a five-day delay in the banking process. Ali also asked Gulve to fly to Georgetown, capital of the Cayman Islands — a tax haven in the British West Indies — to make preparations for the transfer of funds.

Gulve’s years of experience in international financing had taught him that such delays were inevitable; the transfer of vast amounts of money could take upwards of a year, he knew, so without complaint, he flew to Georgetown on Grand Cayman Island. The money didn’t show. He flew to Del Rey Beach. Florida for more meetings with Meltzer. Prince Ali, and the prince’s younger brother. Again the emir was absent, but for the first time he spoke directly to Gulve. Over the telephone, the emir promised that the funding was nearing completion and asked Gulve to fly to New York for a face-to-face meeting. But when Gulve arrived, the emir was gone. Unexpectedly, Prince Ali then phoned from London, asking Gulve to make a special trip to England to tie up some final loose ends.

Meltzer had offered explanations for the delays, and they seemed plausible to Gulve: political turmoil in Saudi Arabia (which Gulve had been reading about in newspapers) and banking snarls in Switzerland. for example. At least some money already had been sent to Inter-Sea (a check for $100,000 to cover initial expenses), and that helped to assuage Gulve’s growing impatience. Meltzer agreed with the two young princes that if Gulve would only meet with the emir, all promises could be confirmed and Gulve would receive the reassurance he was seeking. But Gulve always seemed one city short of the phantomlike emir. Always there was a logical explanation.

One of Gulve’s common practices, not followed generally in his work, was to reveal the sources of funding to his clients (to do so often results in the broker losing his function as an intermediary). Thus Gulve’s clients had also been in contact directly with Meltzer and the Saudi family, and they were convinced that the delays were understandable, given the political problems in Saudi Arabia. At the London Hilton on February 28, however, Gulve began to lose some of his own conviction. After flying from New York at Prince Ali’s request, Gulve found he could not meet with the prince, who left word that further complications with money transfers forced him to fly immediately to Switzerland in an effort to solve the problem

While still at his London hotel, Gulve received a startling telephone call: the man on the other end of the long-distance line claimed to be Crown Prince (now King) Faud of Saudi Arabia. “This voice did not belong in my library of voices,” Gulve says, “so I didn’t know whether to believe it or not. He spoke slowly and with a distinct accent. He said the emir had asked him to call and explain that although the government was currently scrutinizing the business dealings of Saudi families in America, the funding from the emir’s investment group would indeed take place in a very short time. ‘Don’t be concerned,’ the voice said, ‘just exercise patience.’ Well, mine was running out. So was my money.” (Gulve had not yet received a penny in commissions.) “It was hard to believe that a crown prince would make such a call. So on March first I decided it was time to leave London, go back to New York, and ask Chase Manhattan Bank just what the heck was going on!”

Exhausted from his travels, Gulve arrived in New York on March 2. He stayed at the Hilton and called Chase Manhattan, “the people I was not supposed to call” during the initial agreement. With seven projects awaiting funding, Gulve felt he was now qualified to make direct inquiries at the bank, but for four days he couldn't get through to Michael Elzay, vice president of Middle East accounts. On the fifth day. Gulve used subterfuge: he called the bank and asked, “Mike in? Mike Elzay?” — as if he were a close friend. Elzay came on the line and assured Gulve that he knew all about Joseph Meltzer. the Foreign Investment Group, and the various projects. Elzay claimed that the Saudis had recently made a number of investments, which was why their funds were low at the moment. He added that he would inform Gulve personally as soon as the funds were replenished in the account. “Elzay said he could recite from his papers precisely what was due each client — and he did! — and came within one hundred dollars of the actual figure! Pretty good, I thought. One of the top men in one of the largest banks in the world had confirmed everything — that the Ramons were real Saudi oil people, that the accounts did exist, and that they were good for in excess of $400 million. That made me feel great! I felt I was — how do they say on TV? — in the good hands of Allstate. Never fear. Chase is here. You know?”

On March 16, almost two months after the first transfer of money was to have occurred, Gulve received calls from Meltzer and Prince Ali. They said the funding had gone directly from Switzerland to the Scotia Bank on Grand Cayman Island, thus bypassing Chase Manhattan. Meltzer told Gulve to bring his clients first to the Intercontinental Hotel in Miami, and then to the Caymans. Gulve felt he was close, not only to the completion of the protracted money transfer, but also to the commissions he would earn. The only apparent drawback was that he couldn’t phone the Scotia Bank in Georgetown to verify that the money was there. (The Caymans are located sixty minutes by jet south of Miami, and in a four-block area of Georgetown. the capital of the islands, 220 banks do a flourishing business — free from income, profits, capital gains, and estate taxes. In fact, there is no taxation at all. save for a yearly tax of two dollars on all males over eighteen. “One of the laws of those four blocks of banks is that no one is allowed to reveal any banking matters.“ Gulve says. “Do it and you get a twenty-year jail sentence. Silence is the word. So I had to rely on Meltzer’s claim that the money was there.”)

Gulve had become physically ill from months of travel, jet lag, different foods and climates, and the pressures of concluding the transaction. Because he had begun to experience frequent fainting and dizzy spells, Gulve asked his wife Noni and a friend named Lehrman to accompany him on the trip to Miami and the Caymans. Client Sam Maturo, seeking financing for a movie he planned to produce — called Beyond the Black Hole — traveled with them. After they checked into the Intercontinental Hotel in Miami, Joseph Meltzer invited them to a lavish dinner party at the hotel.

During the dinner, Meltzer passed around the table what he laughingly called bogus twenty-dollar bills, suggesting that they were available in large quantities at tremendous discount. Intent on the next day’s work in the Caymans, Gulve paid little attention to Meltzer's uncouth (and potentially criminal) display. “I thought he was joking,” Gulve says. “The presentation was made in front of many people in the room — loudly. I didn’t believe his joke. And anyway, why would I or anyone else at the table want to get involved in such a thing? There was so much to keep track of that a twenty-dollar bill didn’t mean much then.”

On March 19, anticipating the conclusion of this long ordeal, Gulve’s party checked into the Holiday Inn on Seven Mile Beach, Grand Cayman Island. Four other clients had arrived earlier and were staying at other hotels. For six days Gulve and his clients were on the phone, talking to the emir, Prince Ali, and Meltzer in Florida. Calls came in. day and night, but the money didn’t. Gulve became furious. He instructed his wife and clients to return home. Then he and Lehrman flew back to Florida and checked into the Marina Motor Inn in Fort Lauderdale. From there they drove a rented car to Meltzer’s office in Boynton Beach. Meltzer was alone, save for two men who appeared to be body guards.

Gulve burst into the office and demanded a meeting with the emir and the prince immediately. “I had had it,” Gulve recalls. “I said if I didn’t see both of them in the next twenty-four hours I would call the U.S. Attorney’s office in Florida and would tell him to arrest those crooks!” Gulve also wanted to sneak a look at his files in Meltzer’s front office, to see if they were in order. So while Lehrman kept Meltzer and his “bodyguards” busy in the inner office, Gulve went to the outer office to cool down, he claimed — and surreptitiously picked up his files.

When Gulve and Lehrman returned to teir motel in Fort Lauderdale, Meltzer phoned and angrily demanded to know’ what Gulve had done with the files. “I want to review them tonight,” Gulve replied. “They’re my property, you know?” Meltzer ordered Gulve to return them the next day and added that Prince Ali would call soon. When the prince did call the motel, Gulve was aggressive. “It was a bloody telephone fight. I shouted at that man, I said I wanted evidence of who he was, what government he worked for, I told him I thought he was an impostor — a fake! I was so mad it was unbelievable!” The prince calmly insisted that Gulve would have to apologize to the emir for making such preposterous accusations, which could lead to an international incident.

Angry and exhausted, Gulve slammed down the receiver. Too tired to check the files that night (a later look proved them to be in order), Gulve badly needed to sleep.

Because his clients were phoning all evening, Gulve asked Lehrman, who was staying in an adjoining room, to switch rooms for the night and answer the calls. Lehrman agreed. At midnight, the phone rang. Before Lehrman had a chance to identify himself, the voice on the phone said. “Gulve? We just want you to know that tonight is your last night on earth — alive!”

“Kai!” Lehrman shouted, waking Gulve. “Your life’s been threatened. You’d better get the hell out of here. Now."

“Bring the car keys,” Gulve shot back, “and I’m gone!”

Gulve got into the rented car alone. If someone wanted to kill him. he reasoned coolly, there was no sense in taking his friend along. He fled up the coast for fifteen miles, looking for a motel with a vacancy — and for headlights closing in the rearview mirror. Two motels were full, a third had vacancies, and he checked in using a pseudonym. Inside the motel room, he phoned his wife in San Diego. “Noni? My life’s been threatened,” he blurted out. “If you don’t hear from me again. I want you to know why now.” He explained the death threat and told her how to facilitate the transfer of funds, should it ever be carried out; he also told her how much he loved her. “1 was petrified,” Noni Gulve says today. “It was so shocking. And there was nothing I could do. Nothing but pray. ... It was frightening. I’ll never forget that call from Florida.”

The next day Gulve drove cautiously to the airport, caught a plane, and returned to San Diego. On the plane, fearful that the person in the next seat could be a paid assassin, a thousand questions flooded Gulve’s mind. Since the dubious phone call from the alleged Crown Prince Faud, Gulve had become suspicious of the Foreign Investment Group and the whole operation. But everything was so real — all the references, the numerous clients, the offices around the country (and in London), and especially Michael Elzay’s firm reassurances at Chase Manhattan Bank that Meltzer and the Ramon family were genuine. The business couldn’t be phony, Gulve thought. Or could it? What was real and what was not began to coalesce in a vertiginous blur.

At 5:15 the morning after his return to San Diego, the phone rang in Gulve’s home. At the other end of the line the emir’s familiar voice attempted to mollify Gulve, apologizing for all the delays and for Prince Ali’s behavior. The emir added that the money would soon be on its way. An incredulous Gulve erupted: “Mister, I don’t know who you are, but I think you’re a fraud! My clients have put $55,000 into the Boynton Beach trust account. That’s not enough money to cover your travel and phone bills alone — not to mention your son’s Rolls Royce. I can’t understand how you are making any money at all in this fraudulent scheme. But I’m sure you’re a fake.” The emir calmly attempted to reassure Gulve that everything was legitimate. He called back three hours later with the same assurances.

Later that morning Gulve went to his office at 2550 Fifth Avenue in Hillcrest, the building topped by Mr. A’s restaurant. The first news he learned was dismal: Meltzer’s $100,000 check to Inter-Sea had bounced. There were also numerous telephone messages from a man named Jason — whom Gulve didn’t recognize and whose name has been changed here — requesting immediate contact. The pink message slips were dated and showed that this man Jason had been calling for the last fourteen days — almost to the day that Gulve, his wife, and clients had arrived at the Intercontinental Hotel in Miami. Intent on recovering his health, and — frustratingly — on tracking down what had happened to Meltzer’s check, Gulve paid no attention to Jason’s messages for about ten days. Gulve finally phoned the man. Jason, without elaboration, said he needed Gulve’s services, and the two agreed to have lunch at Stuart Anderson’s restaurant on Sports Arena Boulevard. Gulve gives this account of what then happened:

“He picked me up,” says Gulve, “which was mistake number one. Always take your own car.” Jason, well dressed and in his early thirties, was edgy and nervous to the point of irritability. The conversation in the car was neutral, nothing about business, and Gulve began to wonder what the man really wanted. The talk remained that way in the restaurant, broken only by Jason’s repeated trips to a phone booth — three in all — returning to claim, “It’s just one of those days.” “Do you have a problem?” Gulve asked, annoyed by the man’s jittery behavior and frequent trips to the phone booth.

Jason replied that he had made a legal mistake.

“Is it serious? Should I be sitting here with you?”

“Not that serious,” Jason said, fumbling with a napkin. “I was an insurance agent, used my company’s trust fund money, and got audited.”

“This lunch is over," Gulve announced. “Take me back to my office.” Jason’s nervousness continued in the car. Suddenly, about two miles from Gulve’s Hillcrest office, Jason got to the point. He told Gulve he wanted to buy some of the twenty-dollar bills Gulve had available. Gulve had no idea what Jason was talking about. “What twenty-dollar bills?”

“The counterfeit money you were told you could buy in Florida, having dinner with Meltzer-schmeltzer, or whatever.” “Who told you this?’’ Gulve demanded.

“The guy who wants to buy them.” “Who are you working for? The same guys who tried to kill me in Florida? Stop this damn car! I’m getting out!”

Gulve scrambled out of the car and watched it warily as it disappeared down the road. He returned to his office on foot. “What the hell just happened to me?” he asked himself, both stunned and bewildered by his encounter with Jason. “Some SOB just tried to put me in a compromising situation — with counterfeit money. But why? And how could he have learned about the money?” Gulve had no answers.

After he reached his office, Gulve says he called several friends, one of whom was a San Diego attorney who, according to Gulve, had “connections” with the police and the local FBI office. The attorney said he’d look into the matter and would report back later that evening.

At 7:00 p.m. Gulve says he met with his friend the attorney in the lobby of a hotel. The attorney, whose name Gulve will not divulge for fear of putting the man in jeopardy, had gathered alarming, almost unbelievable information: somehow the FBI was involved with someone Gulve was doing business with in Florida. “They’re trying to frame you,” the attorney said calmly of the FBI. “For what reason I don’t know.” Gulve claims the friendly attorney confided more of what he’d learned: Jason was on parole from prison and had agreed to work undercover for the FBI; Gulve was his first project — which Jason kept bungling and had to phone in to find out how to proceed. The attorney added that Jason had been “wired” for sound during the lunch at Stuart Anderson’s. Gulve says his friend would not reveal his sources for these incredible revelations.

Today Gulve recalls his utter confusion after that meeting with his well-connected friend. Meltzer and the Foreign Investment Group appeared more suspicious than ever, but Gulve had only more questions, and no answers. “I knew something was going on,” Gulve says, “But the Ramons and Meltzer — all their answers were so slick, their stories letter perfect. Only the emir on the phone would sometimes mess up with the facts. Otherwise everything was so believable that it was impossible to figure out. When the attorney told me — then I knew that either Meltzer was a crook hunted by the FBI or that he was working for them. But which? And why was I caught in the middle?” On May 10, 1979, Gulve at last scheduled a meeting with the emir in Phoenix, Arizona. Surely, he felt, finally confronting this spectral entity would answer a number of questions.

The emir failed to appear in Phoenix, and for the next six months, though he still worked on the Saudi projects, Gulve sought other sources of funding for his clients, whom he advised against dealing further with Meltzer and the Foreign Investment Group. Gulve’s searches, however, were unsuccessful, in part, he says, because he could never explain to new potential investors what had gone wrong with the Saudis. During this period, Gulve also experienced the continual sensation that government agents were following him. “I became almost a hypochondriac — mentally. Paranoid. That’s it. I’d meet a friend. First thing I’d ask, ‘Are you with the FBI?’ ”

By the end of 1979, Gulve’s money — spent on approximately forty plane flights, at least as many hotels, and on astronomical phone bills — was running out, as was the collective spirit of his family. The children argued among themselves, facing tensions from unknown causes. And Noni Gulve found herself increasingly torn in the late months of 1979. “My major concern throughout all of this,” she says, “was the pressure on Kai. How could he continue? How could he survive? I was outside and inside of it. I could be objective, in one sense, and see it as some terrible secret I had to find out about. I couldn’t believe that the FBI, our trusted FBI, could do such things. That was unthinkable. But as Kai’s wife, I was also inside, I was involved. My future was being controlled by this.”

On Saturday, February 2, 1980, ABSCAM made headlines. The FBI had set up a fake emir (Kambir Abdul Rahman) and a sham company, Abdul Enterprises, both promising to invest huge amounts of Saudi dollars in America. The aim was to expose corruption in high political offices. With the aid of con man Mel Weinberg, the FBI had arranged an elaborate and expensive scam operation — a two-year-long sting that resulted in sixteen men. including seven members of Congress, being charged with bribery and conspiracy for accepting covert monies from the “emir” and other representatives of Abdul Enterprises. Kai Gulve read the news reports and remembers saying to himself, “Thank God we weren’t involved in this thing.” But five months later federal agents arrested Joseph Meltzer and filed fifteen charges against him, including mail fraud and interstate transportation of securities taken by fraud. The newspapers linked Meltzer with ABSCAM. “I was totally deflated by the new knowledge about Meltzer and ABSCAM,” Gulve recalls. “The most devastating effect — like slaughtering a calf by hammering it in the brains — was that almost two years of your life, all that time and all that money, had gone down the drain — for cons! Hired by the FBI! My God! I wanted to go back to Sweden. That’s how disgusted I was. It’s impossible to explain. . . .”

By the spring of 1980, Gulve’s savings had been depleted. He had lost at least $60,000 of his own money for expenses and had borrowed from friends for the year and a half he had worked without an income. Bills piled up, collection agencies appeared at his door. Because his reputation among colleagues as an honest businessman had been tarnished by his association with ABSCAM (word of the debacle spread quickly throughout the local investment community), Gulve says he had problems finding new clients. To pay off debts, he sold his home on Erie Street, plus a yacht, cars, and other personal properties. And still sensing that agents were following him, that his life was in danger, Gulve and his wife in the fall of 1980 moved to a mobile home in Santee — "to escape," as he says. The move, from the heights overlooking Mission Bay to a mobile home park, was a crushing symbol to Gulve. He had fallen far. very far. One night in the winter of 1981, he decided to complete his descent.

In the middle of the night, Gulve grabbed his .22 caliber rifle and went into the darkened kitchen of his mobile home. He shoved a clip of bullets into the magazine. "I was really desperate,” he says, looking back painfully. "I had been considering it — how to do it — all the time. The thought was very strong.” Thinking that the clip was positioned correctly in the rifle, Gulve stuck its barrel end into his mouth and pulled the trigger.

The trigger clicked but the bullet didn’t fire. The clip was crooked. Gulve furiously rapped the clip with his right hand, jamming it into place in the dark. To test whether or not it was in the correct position. he aimed the rifle at the ceiling and pulled the trigger. The gun fired with a loud bang. The bullet flashed past his right ear and punched a hole into the ceiling. "That stopped me,” he says. "I knew then that I wasn't ready to die.”

Gulve’s decision to live has presented a grim irony. Joseph Meltzer, the man whose exploits brought on the suicide attempt. and whose courtroom testimony could be crucial to Gulve’s vindication, is reportedly dying of cancer in the federal penitentiary at Lewisburg, Pennsylvania. Who is Meltzer, and what was his connection with the FBI’s caper? The story gets shady at the center. San Diego-based Assistant U.S. Attorney Robert Rose, who spent five months piecing together the history of Meltzer’s scam before filing the fifteen-count indictment against him. provides this chronology:

In May of 1978, Meltzer was sentenced by a Florida judge to two and a half years in prison for attempting to sell a million dollars’ worth of stock certificates stolen from the McDonald Corporation. Meltzer remained free on bail while his conviction was being appealed. Shortly after his sentencing, Meltzer reportedly contacted local FBI agents in Florida to complain that he was being victimized by loan sharks who were pressing him to pay off debts he owed them. At some point during this contact, according to Rose, Meltzer offered to become an informant for the bureau; Rose says Meltzer claimed to have information regarding corruption among county commissioners in the West Palm Beach area. Rose speculates that Meltzer’s motivation was twofold: cooperation with the FBI in successful prosecutions could mean a quid pro quo reduction of Meltzer’s prison sentence, and being an informant might also provide some income to Meltzer. who was already in debt to the loan sharks. The FBI took on Meltzer, hoping to nab a corrupt county official.

Meltzer’s connections to East Coast underworld figures led to more possibilities in his new job as informant. The bureau wanted to infiltrate an East Coast network of crooks who were buying and selling stolen property, and Meltzer’s criminal associates were potential targets. While making inquiries among these friends, in his role as informant, Meltzer learned of Abdul Enterprises, the phony company set up by the FBI. Neither federal attorney Rose nor the FBI will discuss Meltzer’s knowledge of Abdul Enterprises — how he learned about it, from whom, whether he knew it was part of ABSCAM, or whether Meltzer was asked by the bureau to become an integral part of it — but Rose does say that Meltzer used this knowledge to set up his own scam, while still working for the FBI on the alleged political corruption in Florida.

Because of his reputation on the East Coast as a con man, Meltzer decided to concentrate his illegal scheme in the West, primarily in Southern California, and San Diego in particular. Rose’s research has led him to believe the scam began in earnest about July 4, 1978, when Meltzer’s wife visited her mother here. Meltzer had created H&J Real Estate Investment, agents for the equally fictitious Foreign Investment Group, Ltd., representing the emir and his family. He promoted the emir’s company as “successor” to Abdul Enterprises.

H.B. “Scotty” Flink, a cousin to Meltzer’s wife, was engaged to set up an office here, which he did at 2731 Shelter Island Drive. Flink's job was to find businessmen who were in need of cash and then to put them in touch with Meltzer. Kai Gulve was among at least eleven San Diegans who met Flink and, through him, began negotiations with Meltzer.

Prosecutor Rose claims that Meltzer’s formal association with the FBI as an informant ended about September of 1978 after nothing came of Meltzer’s efforts to reveal government corruption in Florida. Others, including Gulve and syndicated columnist Jack Anderson, believe this is not true. According to their scenario, Meltzer continued to work for the FBI in some capacity related directly to the ABSCAM operation, while simultaneously conducting his own scam — with the knowledge, if not the approval, of the FBI. Furthermore, Gulve and Anderson contend that for months the FBI actually helped to cover up Meltzer’s operation, for this reason: to expose Meltzer early as a fraud would have risked exposing ABSCAM itself, long before its conclusion in February of 1980. Thus, with the help of the FBI, Meltzer was allowed to steal an estimated $150,000 in “good faith money” from people like Kai Gulve.

In June of 1979, almost a year after Meltzer began his scam and just a few weeks after Gulve’s last attempt to meet the emir (in Phoenix), Scotty Flink complained about Meltzer to the San Diego office of the FBI. His complaint, the details of which are not known publicly, was soon followed by others, among them calls from one of Gulve’s clients — Inter-Sea’s representative Richard Stanczyk. Stanczyk, a former Internal Revenue Service investigator and an accountant who had joined Inter-Sea as a consultant, says he spoke with a local FBI agent who told him that the bureau had no file on Meltzer, or that if there had been a file, it could not be located. In any event, Stanczyk says he was told there was no reason to believe Meltzer was a con man.

Stanczyk persisted with his complaints in the following weeks, however, and the agent began to conduct interviews with local people involved with Meltzer. The agent contacted Gulve — three times between June and October of 1979 — twice coming to Gulve’s home. The interviews ostensibly concerned Meltzer’s suspicious activities, but Gulve says he never knew this with certainty, and his paranoia increased — the FBI was trying to find out how much Gulve knew about Meltzer, but for what reason?

Columnist Jack Anderson offers this explanation for the San Diego FBI’s actions: not only did the bureau arrange for Chase Manhattan Bank’s Michael Elzay to lie to Gulve and his clients in order to protect Meltzer’s scam, but the complaints from Scotty Flink, Richard Stanczyk, and others were actually relayed to Meltzer directly by the FBI, presumably to warn Meltzer that he was causing trouble. The nervous queries from Stanczyk were of such concern to the bureau, Anderson says, that federal agents conducted a raid on the offices of Stanczyk’s company. Inter-Sea Fisheries, located in the same Hillcrest building as Gulve’s office. The raid took place on Halloween night, 1979. Though the FBI confiscated numerous files and publicly announced that some Inter-Sea officials had been arrested, no arrests were made and no charges ever were filed. Stanczyk and his company suffered, though. The publicity resulting from the FBI’s raid is credited with putting Inter-Sea out of business and driving Stanczyk to bankruptcy and close to suicide. (Stanczyk says today that the personal and financial pressures on his life — which persist to this day — led to a divorce, severe depression, the loss of more than $200,000. and cost him his credibility as an honest businessman.)

Though the first complaints about Meltzer were received by the FBI here in June of 1979, the bureau did not present to the U.S. Attorney’s office evidence of Meltzer’s fraud until the first week of February, 1980, after ABSCAM was completed. This delay, and its timing, serves Anderson’s and Gulve’s theory that the bureau was deliberately stalling and misleading Gulve and the others in an effort to protect Meltzer. Surely, this theory goes, the local FBI could have and should have checked with the FBI in Florida regarding Meltzer. A simple phone call would have provided the information that Meltzer was a convicted felon, a notorious con man, and an FBI informant with knowledge of Abdul Enterprises, phony Arabs, and elaborate sting operations. Yet the San Diego FBI said it knew nothing about Meltzer. Certainly by October, five months after Flink’s complaint and after the third time Gulve had met with an FBI agent at his home, Gulve should have been given emphatic warnings that Meltzer was untrustworthy. In fact, Gulve and Anderson would insist that Meltzer should have been arrested much earlier than that. Because of Gulve’s pending lawsuit against the FBI and the department of justice, the bureau, both in San Diego and in Washington, D.C., refuses to comment in any way about Meltzer’s involvement.

Years ago, when he proudly received his U.S. citizenship, Gulve would have found it incomprehensible that a federal agency would lie to him and that he would someday be suing the government. But his disillusionment today is profound and cynical: he is now convinced that the San Diego office of the FBI tried to trap him into committing a crime by enlisting the aid of the mysterious, bungling parolee Jason. “If I would have put this guy in touch with Meltzer, I would have been dead,” says Gulve. “The FBI wanted me to do the selling, but it didn’t work. I could have gotten ten years in jail, and it would have gotten rid of me at a very convenient time. So don’t tell me the FBI wasn’t aware of this ‘Son of ABSCAM.’ They were orchestrating it!”

“It is unbelievable that we have made it,” Gulve says today. “We’re still living pretty much hand-to-mouth, but that’s a far cry from where we were. I have to give Noni 500 percent of the credit. She was not a working woman, and now she has three jobs. Excuse me.” Gulve rises from a couch and answers the phone in the living room of the family’s mobile home. It is a business call. Gulve, who has worked for commodities dealerships in the last year, is attempting to find a job in the insurance business. Prior to working in international financing, Gulve had been an insurance executive for twenty-two years. The irony — a former executive now seeking employment as an agent — is not lost on Noni Gulve. “It’s a staggering thought to think that at age sixty you must start from scratch.” she says. “It is awesome to lose everything you had and have to begin again. And the disillusionment — about the whole thing. We knew we either had to change our values — all of them — or decide to take a stand, even if it meant personal danger. I’m glad we took the stand.”

On February 4 of this year, almost two years to the day that ABSCAM gained prominence, Gulve, Richard Stanczyk, and two other businessmen testified before a congressional subcommittee investigating the FBI’s procedures during ABSCAM. Along with Washington attorney Robert J. Flynn, who will represent the four men in court (possibly later this year), each man testified that his life had been devastated by Joseph Meltzer scam and the FBI’s failure to inform him of the truth. “That was a very difficult time,” Noni Gulve recalls. "We were never really certain what would happen to us. Our most difficult decision was: should Kai go to Washington? Our phone had been tapped for over a year. [Chief ABSCAM con man] Mel Weinberg’s wife had died mysteriously. We knew there was danger. But Kai decided he must go. Not just for him but for his clients, too — to put his statement on the public record. It was such a relief when he returned.”

Gulve returns to the table. “How’d it go?” his wife asks.

“So-so,” Gulve replies, “but there weren’t any crackles or strange noises on the phone. There haven’t been any for the last month. You know?” he says, turning to me, “I’ve had my phone changed three times. The bugs on the line got so I couldn’t hear anything except for a tape clicking off a reel. I was in the Swedish Air Force, in communications. I know the sound of a tape needing to be recycled when they roll off the wheel. So sometimes I'd get sarcastic. I would say into the phone to whoever was working the bug, ‘Would you please get your new tape secured and functioning so I can continue my conversation?’ ” Finally, Gulve says, the phone company sent out a man to check on these strange noises. The repairman called the main office and Gulve says the office told their man that the mobile home’s phone was not hooked up to the main trunk. Gulve picks up the exchange from there:

“We don’t know where your wires are going, sir,” the repairman said, “but they aren’t going to where everyone else’s go. ” “They’re going to the FBI.”

“You in trouble?”

“No. The FBI is.”

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