OK, this is pretty recent history, but it’s worth recalling – especially when you look at the name dropping of some of the notable names of Hawaiʻi’s past and the apparent lack of confirmation of the families who were part of “the deal.”
The saga of Bishop, Baldwin, Rewald, Dillingham & Wong began in 1977, when Ronald Ray Rewald, following a minor criminal conviction and the bankruptcy of a sporting-goods concern in Milwaukee, Wisconsin, moved to Hawaiʻi.
Rewald was born in 1942 and grew up in Milwaukee, Wisconsin. A natural born athlete, he was a sought after professional football player. He signed with the Cleveland Browns and trained with the Chiefs, but an ankle injury during training kept him from ever being an NFL superstar.
The faux investment entity was incorporated in 1979. Using names of the past (as well as his and that of his partner in crime, Sunlin LS Wong) 36-year-old Rewald rubbed elbows with the likes of Governor George Ariyoshi and actor Jack Lord, before his company started to cave in.
Rewald and Wong formed “Bishop, Baldwin, Rewald, Dillingham & Wong” and quickly fell into favor with many who invested millions of dollars on behalf some of Honolulu’s most prominent businesses and families. Rewald moved into a sprawling estate near Kuliouou and traveled around town in a black stretch limo that featured a coat of arms and Rewald’s initials on the doors.
The names Bishop, Baldwin and Dillingham were established old-money names of Hawaiʻi that the schemers put on their letterhead to create the illusion of credibility. One local businessman noted, “It was as if he arrived in Manhattan and had a firm called Rockefeller, Harriman, Cabot, Forbes and Roosevelt.”
It represented itself as being “one of Hawaiʻi’s oldest and largest privately-held international investment and consulting firms”, dealing only in “secured, safe, non-risk” investments.
Before it fell, over 400-people “invested” $22-million, that Rewald used it to buy property around the island and generally came across as a hugely successful local financier, promising 20% returns on investments and claiming a waiting list of two years to contribute funds.
The firm’s sales materials indicated that investors’ funds were “fully accessible without charge, cost, penalties, time deposits or restrictions.” However, “investors” started demanding return of their funds.
Feeling pressured, and apparently seeing that the light at the end of the tunnel was an on-coming train, Rewald slit his wrists in the Sheraton Waikīkī … and lived.
As soon as he was released from the hospital, he was arrested and charged with theft by deception under Hawaiʻi criminal law.
Rewald’s partner Wong cooperated with the authorities pled guilty and did 2-years in a federal penitentiary.
Rewald faced federal criminal charges of swindling more than $22 million in what government prosecutors characterize as a “Ponzi scheme.”
A Ponzi scheme has no actual earnings, but to keep investor interest, periodic payments are made (using their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.)
This “investment” strategy was named after Charles Ponzi, who became notorious for using the technique in 1920. Ponzi did not invent the scheme (i.e., Charles Dickens’ 1844 novel Martin Chuzzlewit and 1857 novel Little Dorrit each described such a scheme.)
However, the intrigue grew when claims of the Central Intelligence Agency (CIA) was blamed for the fiasco.
During his trial, the case took a bizarre turn when Rewald claimed his investment company was a CIA front. The allegations of a CIA cover-up caught the national media’s attention, which sparked a legal battle between the CIA and ABC News.
ABC News launched a review and investigation of the tangled Ronald R. Rewald story that forced the network into an unprecedented legal conflict with the Central Intelligence Agency.
The review was supported and directed by ABC News President Roone Arledge and Vice President David Burke.
However, as Rewald’s trial progressed, little evidence supporting his or ABC’s charges came to light. Among the more explosive charges in the ABC reports were that the CIA used Rewald’s company for an illegal arms deal with Taiwan, plotted to kill Rewald and threatened the life of an investor in his firm. ABC later retracted the Rewald murder charge, a move that prompted a $145-million libel suit by the source of the story.
In his defense case, Rewald acknowledged many of the government’s accusations against him. Rewald declined to testify in his own defense when Federal District Judge Harold M Fong ruled that much of his story would be inadmissible.
In the end, it turned out to be nothing but a common Ponzi scheme. The con ran for a few years up until 1983, when Bishop, Baldwin, Rewald, Dillingham & Wong met the fate that all Ponzi’s do … implosion.
After an 11-week trial involving over 140-witnesses and 98-charges stemming from theft by deception, Rewald was sentenced to 80 years.
Rewald was released on parole from the Federal Correctional Institution on Terminal Island in California in June 1995. He wasn’t eligible for parole until October 2015, but was released early, possibly because of a back injury.
Following his release, Rewald lived in Los Angeles and reported to his probation officer in Studio City. The probation office closed his case in 2000.
Rewald later was the director of operations of a talent and literary agency, Agency for the Performing Arts, in Beverly Hills. APA also has offices in New York City and Nashville. (Lots of information here from various published reports on the matter.)
The image shows Ron Rewald (honoulumagazine.) In addition, I have added other related images in a folder of like name in the Photos section on my Facebook and Google+ pages.