Sources close to the charity said last night that investigations into the theft of dollars 8.8m (pounds 6.3m) of Salvation Army funds, which have switched to America, have found that up to dollars 3.3m has been used to buy property in Santa Monica and Malibu, California.
Among those whose assets have been frozen by Slaughter and May, the solicitors acting for the charity, is Harold Glantz, a businessman who has been the subject of investigations by the Securities and Exchange Commission, the New York Police Department, the South and East US Attorney's Offices, the South and East Organised Crime Task Forces and the State Investigation Commission. A confidential letter written in 1976 by the New York City Commissioner of Investigation, Nicholas Scoppetta, to the New York Economic Development Administration, concludes: 'Harold Glantz has been associated with high-level organised crime figures and has apparently served as agent for them in encroachment on legitimate business interests.'
Among the figures Mr Scoppetta linked Mr Glantz with was Carlo Gambino, the head of one of the leading New York Mafia families, who died in that year.
It is understood that dollars 4.35m of the dollars 8.8m allegedly stolen from the Salvation Army last year was used by a syndicate headed by Gamil Naguib, an Egyptian-Canadian financier being sued by the charity, to buy a standby letter of credit, a dubious banking instrument which some financiers claim can be traded at a profit.
It was in another such deal, arranged by the Birmingham businessman Stuart Ford, who is also being sued, that the Army's money went missing.
Mr Naguib and two colleagues in the Luxembourg-based Creedvale International Investment Corporation are understood to have put up the money in an investment deal, but it was transferred through two other banks in Luxembourg until it was out of their control and in the hands of an American syndicate headed by Mr Glantz and his company, Continental Capital Markets Inc of New York.
From here, it is understood, lawyers have established that it moved to America, where dollars 1.2m was used to buy a house on 11th Street, Santa Monica, for Mr Glantz's daughter, Lisa.
An undisclosed sum was also used towards the purchase of a dollars 5m house on the Pacific Coast Highway in Malibu Beach, the home of movie stars and perhaps the most glamorous address in the world. The bushfires that damaged other Malibu properties last week stopped within yards of the house.
'It's an amazing property,' said one source. 'It has eight bedrooms and four bathrooms, a swimming pool, Jacuzzi and koi-fish pond.'
Investigators are thought to have linked dollars 150,000 with another American whose bank account at the Kansallis International Bank in Luxembourg was used to obtain the money. The account already contained dollars 500,000 stolen from a Dr John Hammeke in Kansas. The Creedvale syndicate was persuaded to part with the dollars 4.35m because they were told that Dr Hammeke, in whose name the account was opened, was an attorney. In fact, he is a retired doctor.
A further payment of dollars 45,000 was made to Roger Greenman, another business partner of Mr Glantz.
Lawyers have succeeded in freezing all the assets in the US linked to the Salvation Army money, although it is understood a lawyer acting for Mr Glantz has made repeated, but unfulfilled, promises to return the money.
The lawyer, Leslie Barth of Connecticut, is due to be sentenced next week for his part in a financial scandal.
It is understood that up to another dollars 1m of the dollars 4.35m invested in Luxembourg was taken to the Netherlands in the control of Mr Glantz's third partner in the deal, Guido Haak, of Delta Management BV. This, with dollars 500,000 recovered by the charity and dollars 3.3m identified in Britain, accounts for almost all the money, although some amounts have been 'dissipated' along the way.
Among the amounts in Britain is about dollars 1m allegedly loaned to Lawrence Gillick, a controversial businessman best known for his failed attempt to buy Tottenham Hotspur Football Club. Mr Naguib has been questioned by police in Vancouver and Mr Ford has been interviewed and released on police bail. Colonel Grenville Burn, who entrusted the two with the Salvation Army money, has been dismissed, although he is not suspected of any wrongdoing. No one has been charged.Reuse content