By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
Initially, although he held no official position with the bank, Stafford attended the bank's meetings, said Walter and former bank director and chairman Robert K. King. After one bank organizer complained of his presence, Walter said he barred Stafford from the bank's organizational meetings.
Stafford easily bypassed the restriction by pumping friendly bank directors for information, said King, and Donald R. Wheeler, the bank's first chairman, in separate interviews. Sometimes Stafford did not wait for meetings to end, but would telephone directors for in-progress briefings, King said. But Walter's efforts to exclude Stafford failed to reduce his meddling or derail his check-laundering scheme.
Federal-court records show that soon after the bank received its state charter in April 1981, Stafford began laundering money through a series of bogus accounts established solely for that purpose at the bank. From May to September 1981, Stafford cashed about $123,000 in kickback money, court records show.
Eventually, the frequency of Stafford's check cashing aroused Walter's suspicions. That, said Walter, is when he called King into his office, one morning in September 1981, to show him a desk drawer containing several uncashed kickback checks. King, who later pleaded guilty to mail-fraud charges in connection with the kickback scheme, said he was shocked when he saw the checks; he knew he would collect a third of the money himself. King said he told Walter, "Dale, don't cash them. You're gonna wind up like me. I can't get away."
Walter said he immediately ordered the bank's tellers to stop cashing Stafford's checks. The order incensed Stafford, who determined to reduce Walter's influence. That meant a move against Wheeler, who was never party to the kick-back scheme.
King said that during a fishing trip in Mexico in late 1981, Stafford and Roski Jr. told him they wanted him to succeed Wheeler as bank chairman. "Eddie [Roski Jr.] says to me, 'We're gonna make you, Bob King, chairman of the board.'
"And I says, 'I'm not interested in being chairman of the board . . .'
"Eddie says, 'What Jim wants, we're gonna give it to him,'" King said in one of several tape-recorded interviews he granted in 1985. In a recent interview, Roski Jr. said that he does not remember King ever being on the bank's board of directors. Nor does he recall Wheeler, whom he described as "a close friend," ever being forced out of the chairmanship. Bank documents list Wheeler as the bank's first chairman of the board, and King as a founding director.
A few months later, bank records show, Stafford's allies on the bank's board did indeed oust Wheeler and elect King chairman. But King said his election to chairman only made him feel more deeply enmeshed in Stafford's schemes. King, who now knew he was the target of the FBI investigation, said he ignored Stafford's orders to make Walter cash his kickback checks, further infuriating Stafford.
In March 1983, Walter again tried to reduce Stafford's "negative influence" over the bank by putting together a group of directors to buy out three of Stafford's most loyal allies. Walter's refusal to cash Stafford's checks, coupled with the successful buyout, prompted a showdown. King said that Stafford instructed him to schedule a meeting to discuss Walter's dismissal.
During a telephone conversation, King said, Stafford complained that "Dale Walter ain't gonna cash our [his and King's] checks. I think we ought to fire his ass. Why don't you and Eddie [Roski Jr.] and I have a powwow."
King followed Stafford's orders. In a certified letter dated April 6, 1983, King, acting in his capacity as bank chairman, informed the bank's directors that "A special meeting of the board of directors of the Bank of Industry, City of Industry, California, has been called by the chairman of the board for 11 a.m., Wednesday, April 13, 1983, in the Laundry Room at Industry Hills. This meeting is for the sole and express purpose [of deciding] the status of Dale Walter, CEO, Bank of Industry."
But King canceled the meeting after Walter fired back a letter in which he threatened to notify state banking authorities of Stafford's attempts to influence the board. A few days later, King, cracking under the emotional strain, announced his decision to sell his stock in the bank and resign from his position as board chairman.
King's resignation apparently triggered one last attempt by Stafford to take control of the bank's affairs. Walter said that Stafford's allies on the board had voted to make Gary A. Bryce, a bank director and close Stafford business partner, bank chairman, and that Roski Jr. had voted for Bryce. Soon afterward, Walter said, he was approached by the FBI. He agreed to cooperate.
In September 13, 1983, with the FBI closing in, Stafford held his first meeting with Rowlett. Stafford paid the former bank teller the first of two $1,000 bribes to "forget" about cashing his kickback checks, FBI transcripts show. During the meeting, Rowlett told Stafford that she feared Walter would blame her for the check laundering. Stafford tried to reassure her:
"Dale [Walter] isn't going to do that and Dale isn't going to remember anything either."
"Okay," Rowlett answered.
"Don't worry about that," Stafford continued.