Evening's Empire: The Story of My Father's Murder (22 page)

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Arizona Republic,
June 6, 1974:

State Probes Realty Chief; Bribe Claimed

Allegations that monthly cash payments were collected from at least six land development firms and turned over to J. Fred Talley, Arizona real estate commissioner, are being investigated by the state attorney general’s office, an official disclosed Wednesday.

Ronald L. Crismon, chief of the attorney general’s Strike Force on Organized Crime, said that the payments reportedly funneled to Talley were “part of the allegations brought to my attention and which we are investigating.”

The 70-year-old Talley said he knew nothing about an investigation and denied any wrongdoing. He has been real estate commissioner for about 14 years and is an attorney and former Graham County school teacher.

Other sources revealed that the investigation stems from allegations made to Phoenix police and others that ex-convict Ned Warren, once known as Nathan Waxman and an Arizona land promoter, collected the monthly cash payments and allegedly delivered them to Talley….

The original allegations were made last Aug. 30 to Phoenix police by James Cornwall, 38, former president of Great Southwest Land and Cattle Co. of Phoenix.

Cornwall, who now lives in Virginia, is under a Maricopa County grand jury indictment in connection with the financial collapse two years ago of Great Southwest. Court records show he is charged with 66 counts of fraud. He is now reported to be pastor of a non-denominational Church in Virginia.

Warren, reached at his valley home, declined to comment or even listen to the allegations made against him by Cornwall.

“I don’t want to discuss it,” he told a reporter….

Cornwall asserted that the monthly payments to Warren by Great Southwest were a minimum of $100. Occasionally “heat” payments of as much as $500 in Great Southwest funds were made for “problems which required extra work on the part of Talley,” Cornwall is quoted in police reports.

At least five other land development companies made similar payments to Warren allegedly for Talley, Cornwall told police.

Cornwall said he made the same allegations “about two months ago” to other authorities, including the U.S. Internal Revenue Service.

Cornwall added that he had only two contacts with Talley, “both through Ned Warren.” However, Cornwall said, he had “no personal rapport with him (Talley).”

Although he is unable to substantiate fully Warren’s alleged claim that the money collected went to Talley, Cornwall said he is convinced it did.

Cornwall told a reporter he doubts that Warren kept the payments “because I can’t see him (Warren) taking hundreds (of dollars). Warren is a very egotistical guy and if, in fact, he could pass money to Talley from other people without it having to come out of his pocket and still be a hero, I can see him doing it. That’s why it is believable to me.”

Other payments from his company, Cornwall maintained, went to a “guy in the county attorney’s office.”

“Warren told me,” Cornwall continued, “Hey, this is something—that all the land companies do. He told me ‘all the companies I work with.’ ”

Cornwall said that when he purchased Great Southwest in 1970 he found that the company had entered into certain agreements through which the firm was obligated to pay Warren a $500-a-week consulting fee, although Warren did no consulting work.

At one point, as the Great Southwest financial situation worsened, Cornwall told police, he stopped making the weekly consulting payments to Warren for “a couple of weeks.”

“All of a sudden,” Cornwall told the police, “we had lots of complaints from the Real Estate Department.” So the weekly consulting payments were resumed, Cornwall added.

Cornwall told police that Warren, in effect, controlled Great Southwest while Cornwall was its president….

Meanwhile, Wednesday, Wayne Tangye, chief of the Real Estate Department’s enforcement division, said his boss, Talley, attempted to intimidate him earlier in the day. Tangye said, “He claimed I was spending too much time helping the attorney general’s office in real estate fraud cases.”

In the end, Tangye said, Talley threatened to fire him from his post.

Arizona Republic,
June 8, 1974:

Fraud Prober Demoted by Real Estate Director

Wayne Tangye, an Arizona Real Estate Department official who is helping other state authorities investigate land frauds, said he was demoted Friday by J. Fred Talley, real estate commissioner who is one of those being investigated.

Talley is the subject of a probe by the attorney general’s Strike Force on Organized Crime. He has denied wrongdoing but refused to answer any questions on the matter.

Under investigation, according to Ronald L. Crismon, strike force chief, are allegations that monthly cash payments from at least six land sales firms were funnelled to Talley through Ned Warren, ex-convict land promoter.

Tangye, who has been chief of the Real Estate Department’s enforcement division, said his demotion to “investigator” goes into effect Monday. The demotion notice, he said, directs him to surrender all his records to Talley. These may include records that implicate Talley, Tangye said.

Although removed from his higher post, Tangye said he will continue to cooperate with the attorney general’s office, “as any good citizen would.”

The Real Estate Department, Tangye said, already has a full complement of investigators.

“I was told two days ago by Talley,” Tangye said, “that I was spending too much time with the attorney general’s office investigating land frauds.”

Tangye said he remains “vitally interested” in the investigations.

The demotion, Tangye said, means a monthly salary cut of between $300 and $350….

Arizona Republic,
June 8, 1974:

Land Promoter Called Influence Buyer

A land promoter who designed and operates a vast network of fraudulent real estate schemes in Arizona has not been prosecuted because he “has purchased too much influence in this community,” the court-appointed attorney for three bankrupt corporations charged Friday.

The promoter was identified as Ned Warren, an ex-convict, by the attorney, Bruce Babbitt.

Babbitt was named by the U.S. District Court to represent the trustees for Great Southwest Land and Cattle Co., Lake Montezuma Development Corp. and Educational Computer Systems.

All three firms were founded by Warren, Babbitt maintained.

Warren could not be reached for comment.

Although fraud was involved in the failure of these and other companies organized by Warren, Babbitt charged, “Warren has purchased too much influence in this community” and, therefore, has escaped prosecution.

Babbitt, a Democratic candidate for state attorney general, made the charge at a political meeting in Sun City.

“Public records are available,” Babbitt continued, “that paint a vivid picture of how Warren organized the companies, milked the money out and turned them over to his associates to run them into bankruptcy and take the rap.

“The front men, including James Cornwall,” Babbitt asserted, “have been indicted. But the prosecutors seem unable or unwilling to take on the real problem: Ned Warren.”

Such large-scale land-fraud rackets as have blighted Arizona’s national reputation for at least the past decade, Babbitt contended, suggest the involvement of “organized crime.”

“Organized crime,” Babbitt said, requires two ingredients: Sophisticated organizers and the cooperation of public officials.”

The only way to stop the scandals, Babbitt said, is to conduct “a tough, thorough investigation and prosecution that will root out land fraud and those responsible once and for all.”

Babbitt suggested the formation of an independent prosecutor’s office which is free of political influence.

The pattern of land fraud has been “consistent, ongoing and publicly known,” Babbitt asserted, without any serious effort made by public officials to stop it.

“The pattern began in the early 1960s,” Babbitt recounted, “with the rise and fall of Western Growth Capital and related companies, including Diamond Valley and Snowflake Highlands.”

Warren organized and directed Western Growth, Babbitt said, escaping any prosecution with the tacit cooperation of “powerful public personalities.”

Most prominent of those associated with Warren in Western Growth, Babbitt said, was Lee Ackerman, a businessman and former Democratic national committeeman, state legislator and onetime unsuccessful candidate for governor.

“When Western Growth went bankrupt,” Babbitt explained, “thousands of people lost their investments. They have never been compensated. No one went to jail.”

The pattern established by Warren in Western Growth, Babbitt said, has been subsequently repeated in connection with the financial failure of other firms organized by Warren.

So far, Babbitt said, law enforcement officials have bagged only the “front men” in fraudulent land operations, including Lake Havasu Estates Corp.

Although several of Lake Havasu Estates officers were “convicted by plea bargaining” involving the U.S. attorney’s office last month, Babbitt said, “there is no evidence that the real organizers have been exposed.”

Such land frauds continue to thrive in Arizona, Babbitt concluded, because “Ned Warren has purchased too much influence in this community.

“The press,” Babbitt asserted, “has already reported the facts regarding the corruption of an investigator in the county attorney’s office. Two years have passed and nothing has been done.

“The allegations regarding Fred Talley, state real estate commissioner, also are known,” Babbitt said. “It is also a public fact that Talley’s son has been employed by Ned Warren.”

(Talley issued Warren a real estate license several years ago, even though Warren was a twice-convicted felon, after Warren hired Talley’s son, James.)

He had almost fainted when McCracken appeared at his door in the summer of 1973. Before that, Cornwall had spent two years hiding in Europe, mostly in Switzerland. You could do business, buy groceries, but without the language, every conversation was a child’s conversation of half a dozen words. He came back home. He started a new life as a pastor in Newport News, Virginia, head of the Peninsula Rock Church and Proclaim Center, following the path of his father and grandfather and brothers, all of whom were preachers.

He still didn’t think he’d done anything wrong, so when McCracken found him, he decided to cooperate. He should have trusted Tony Serra before he trusted Lonzo McCracken.

There was nothing in Ed’s past that could have prepared his father, Lou, for what he had to tell him now. The world was no longer recognizable. His father wore a blue golf sweater and polyester pants and he seemed to barely listen, his hand on the recliner’s armrest, head slightly bowed. Disgust, then quiet. Maybe not even disgust, just incomprehension. Then it was as if it hadn’t happened. As if the money for Talley had never existed. They never talked about it again.