-Caveat Lector- an excerpt from: The Arizona Project Michael Wendland©1977 ISBN 0-8362-0728-9 Sheed Andrews and McMeel, Inc. 6700 Squibb Rd. Misson Kansas 66202 276 pps. - first edition - out-of-print New revised edition - available amazon.com Paperback, 304pp. ISBN: 0945165021 Blue Sky Press, Incorporated June 1988 --[12]-- 12. Ned Warren, Sr., Talks Halfway between Phoenix and Tucson, just outside the tiny desert town of Florence, stands the Arizona State Prison. Its cream-colored walls are patrolled by machine gun-toting guards in cowboy hats and mirrored sunglasses. The place is forbidding. Hopelessly overcrowded with nearly twice its twelve-hundred-inmate capacity, the prison has often been used by Hollywood film makers to set the mood for B movies on the horrors of prison life. And indeed, the prison's sixty-nine-year history is filled with dozens of real-life examples of such horrors, not the least of which was an old Indian legend that proclaimed the early weeks of each year as "the months of blood," a time when the Indian war gods would demand the lives of the prison's most notorious stool pigeons. In the twenties and thirties, there had actually been a series of such killings. Six inmates were murdered under similar circumstances—a knife in the back, exactly as proclaimed in the legend. Although the tale no longer causes prison guards to go on alert each winter, other bloody incidents have occurred. Beatings, riots, breakouts, and random violence continue with regularity over the years, most often in the early weeks of the new year. While few of the inmates believe it, the Indian legend is still passed along on their grapevine. It is part of the prison's lore. Tony Serra, a dark-haired forty-two-year-old con man serving an eight-year land fraud sentence, must have been well aware of the old story the morning of January 3, 1977. About 9:00 A.M., he mailed a letter to a Phoenix attorney who had been working with Richard Frost, one of the IRE team's land fraud sources. The letter was the third such note mailed or sneaked out of the prison over the last several weeks. The first two had gone to Frost. The third, on Frost's urgings, was sent to the attorney. All three letters had the same message. "They're going to get me," Serra warned. "I'm going to be killed. I know too much. Get me out of here." Serra was the convict who had told Frost the previous summer that he knew where land fraud kingpin Ned Warren, Sr., had stashed a pile of incriminating documents. And Serra, once a close associate of Warren's, had indicated to Frost that he just might be willing to start talking. Ever since IRE team members had begun interviewing him on the land fraud industry, Frost had been harping on the Tony Serra case. Serra was in fear for his life, Frost had insisted to reporters. Unless he was removed from the state prison and transferred under another name to another prison, he was a marked man. The reporters had listened sympathetically to Frost. But they were powerless to do much about it. It was only Frost's word, though Phoenix detective Lonzo McCracken had voiced similar concerns over Serra's fate. McCracken, too, had told the reporters that not much could be done. Authorities needed something to go on besides fear. In December, it looked like they had found that something else. Serra was hospitalized at the prison with a series of suspicious bruises and cuts. But prison officials had denied an assault on Serra. It was the result of a fall, a slight accident, McCracken was told. Shortly after mailing his letter Monday, January 3, Serra reported for work in the prison's sign shop, a wide open area filled with some seventy-five inmates and large, noisy machines used to stamp out state highway signs. There was only one guard. Serra was a nervous man that morning. He had stayed in his cell for the better part of a week, refusing to mix with the other inmates or show up for his job in the sign shop. When he reported for work a few minutes before ten, he was met by Robert Deardorff, the sign shop supervisor. Deardorff was angry. Why had Serra skipped work? Did he want another job? Was he unhappy? Serra was quiet. No, he would stay there. He hadn't been feeling well. But he'd be okay now. Deardorff shrugged. Inmates were often like that, sullen and moody. He wasn't a prison psychologist. It was hard enough getting the convicts to work. Serra was a loner. There was no getting through to him. Whatever his problem was, it appeared that Serra was coming to grips with it. Deardorff was pleased. He told Serra to start working and returned to his office. Serra walked off. He talked to no one, though several inmates greeted him as he passed. He looked straight ahead. He looked afraid. About two minutes past ten, the prison guard heard something strange above the roar of the machinery. It sounded like scuffling. He walked towards the noise, which was over almost immediately. On the grimy concrete floor between a metal desk and a loading dolly was Tony Serra. He was dead. Stabbed. The autopsy revealed eighteen separate wounds, from at least two weapons. There were also numerous bruises. It appeared as if he had been kicked and beaten as well. Prison officials questioned the other inmate workers. Nobody saw anything. A shakedown by guards produced a zip gun and three homemade knives, apparently made that morning. "This thing was not spontaneous," prison warden Harold Cardwell told reporters that afternoon. "This was a planned killing." Cardwell conceded that he had heard frequent rumors about threats against Serra. "But that's all they were, just rumors. We need facts, not rumors. There was nothing we could have done to prevent this." In Phoenix, Dick Frost was furious. "You believe me now?" he sarcastically asked IRE reporters that night. "I told you. I warned you. But no one would listen. He's dead now and there goes another witness against Warren." The news of Serra's death had shocked the team. George Weisz and Ross Becker were the first to find out about it. They were in the city room of the Republi c when the story came in over the wire services late in the afternoon. They rushed back to the Adams and told the rest of the team. "You're kidding," said Greene, looking up from his memo—reading. Rawlinson, Winters, and Wendland gathered around. "God damn," said Rawlinson. "We should have believed Frost. "No. We did right. We did what we could. We asked questions, we found out what was provable." Greene could see the anger and guilt rising in the reporters. "Now listen to me. There was no proof. We just had Frost's words. We made sure the police were aware." "Greene's right," said Wendland. "There wasn't anything we could have done to stop it." Serra was number nineteen in a bizarre series of violent murders and questionable deaths linked to organized crime or land fraud in Arizona. And Dick Frost was worried that he would be number twenty. "Jesus, look at the track record," he said to Wendland one night. "Everyone connected to land fraud who was in a position to testify against the bigwigs has been hit." Wendland tried to calm him down. "Look, Dick, you helped convict Warren on that extortion case up in Washington in 1975 and here you are. Just relax." "Yeah, but I'm also the guy who Serra promised to talk with. Shit, maybe they think I already talked to him. And besides, look what happened to me as soon as I testified against Warren. Boom, just like that, I get indicted on land fraud charges myself." Two nights later, Frost was back in the office with a letter. "You're next," was all it said. It was delivered to him by a Phoenix radio station employee, who said it was received anonymously in the mail. "I went to the cops, asking for protection," said Frost. "They told me they couldn't provide it." Then he patted the waistband of his trousers. "I'm carrying a gun from now on. I'll protect myself." Frost, who was staying at the downtown Phoenix YMCA while awaiting his land fraud trial, wasn't seen by reporters for a couple of days. When he next came by, he was even more frightened. "Listen, I'm going to be laying low for awhile. If you need me don't try the Y. I've moved." He gave reporters his new address in a second-rate motel across town. "They tried to get me the other night," he said. "I had gone to the washroom, getting ready for bed. I had left my gun back in the room. I was tired, not really paying much attention when the door opened. All of a sudden, I feel somebody trying to grab my arms, to pin me back. I wheel around and I see these four black guys. I don't know how I did it, but I was able to get around them, to run out of the washroom and down the hall to my room. I got my gun and opened the door. As soon as they saw the gun, they split. But they were after me. They were going to kill me. One of the other tenants told me he had seen these guys staring at my room earlier. I called the cops and they picked them up. They were carrying knives. But the cops couldn't do anything because the four black guys hadn't really done anything except scare hell out of me. Can you imagine that? I mean, if they killed me, the cops could have held them. But since they didn't hurt me, all they could do was take down their names and warn them. Anyway, that's close enough for me. I'll be on my guard from now on." Serra's prison murder came just as IRE's investigation into land fraud huckster Ned Warren, Sr., was winding up. And his death had a chilling effect on the reporters, who, among other things, had learned that the charmed life led by the so-called godfather of land fraud stemmed from widespread payoffs and "loans" given influential state officials charged with regulating the state's real estate industry. Actually, it was the dead convict who had provided the major break. In January 1971, the dapper Serra, then president of a land company known as World Development Corporation, told Detective Lonzo McCracken that Warren was making payoffs to real estate officials through James Cornwall, president of the Great Southwest Land and Cattle Company. Before starting his own company, Serra had worked as Cornwall's sales manager. That initial conversation gave authorities the first tip that Warren was behind Great Southwest, then one of the state's biggest and most crooked land development firms. McCracken began investigating. By April of 1972, he had firmly established Warren's secret financial interest in the company. But before he could question Cornwall, the company had suddenly gone belly up and Cornwall had fled to Europe. And when McCracken tried to get at the books of the firm, he found they had suddenly been seized by James Keiffer, chief investigator for Arizona State Real Estate Commissioner J. Fred Talley. Neither Keiffer nor Talley would allow McCracken access to the books of the Warren company. It took a court search warrant for police to finally get hold of them. McCracken kept digging. A few weeks later he discovered why he had had trouble obtaining cooperation from the real estate commission. Not long before Great Southwest went under, Keiffer had recieved[sic] a personal "loan" of $2,660 from Warren. Under questioning, Keiffer admitted receiving the money. But he claimed the "loan" had been repaid. When police asked to see proof, Keiffer said he had forgotten to get back the promissory note he had given Warren. On July 25, 1973, McCracken finally located Cornwall in Salem, Oregon, and returned him to Phoenix to stand trial for the $5 million Great Southwest swindle. In exchange for probation, Cornwall agreed to plead guilty to thirty-three counts of securities fraud and to testify for the prosecution. Cornwall said that while he was president of Great Southwest—through Ned Warren, Sr.,—he made monthly bribes of up to $300 per month to Commissioner, Talley, as well as an annual Christmas "gift" of $500. In September 1974, Commissioner Talley, by then aware of the investigation, suddenly resigned his office. Two months later, at the age of seventy, he died of a heart attack. But McCracken would not give up. Three months later, he had another major police witness. This one was Edward Lazar, Warren's chief accountant. And Lazar backed up all of Cornwall's accusations, confirming the widespread payoffs to state officials. "It's like life insurance should we ever have any trouble with the real estate commission," Lazar secretly testified before a grand jury. It was enough to bring bribery charges against Ned Warren, Sr. But the day after Lazar made those allegations, he was gunned down on a stairwell leading to his office parking garage. He was shot with a .22 caliber gun, four times in the chest and once in the head. Without Lazar's corroborating courtroom testimony, Cornwall's allegations were not enough. Two days after Lazar's murder, something incredible happened. Moise Berger, the Maricopa County prosecuting attorney, who would later confess to police in a secretly tape-recorded interview that there was a "power coalition" in Phoenix trying to stifle major organized crime prosecutions, suddenly summoned Cornwall to his office. Berger, claiming that he wanted to "test" Detective McCracken's loyalty, ordered Cornwall to go to McCracken and say that he was frightened by Lazar's murder and had changed his mind about testifying against Warren. Berger's excuse was lame. He told Cornwall that the point of the "test" was to see if McCracken would then relay this information back to Berger. If Cornwall would help him out, Berger promised to dismiss charges against him. Cornwall went to McCracken and did as Berger had instructed. But under questioning by the detective, he admitted that he had been put up to it by the prosecuting attorney. Furious, McCracken went to his superiors. A lie detector test was arranged. Cornwall passed it. He was telling the truth. Berger, meanwhile, admitted arranging the "test," though he denied promising to free Cornwall in exchange for his help. Less than a month later, on March 4, 1975, Maricopa County dismissed the bribery indictment against Warren. Berger had deliberately leaked information to the news media about the grand jury investigations. "I find this conduct by the county attorney deplorable," said the court. Detective McCracken developed an ulcer. But he refused to give up. New bribery charges were filed against Warren, and by April 1975, the godfather was in court, facing a preliminary examination. Berger had assigned one of his deputy prosecutors, Lawrence Cantor, to present the government's case. Then another problem arose. Cantor, according to police, reeked of alcohol each morning during the hearing. At one point, a police report obtained by IRE reporters noted, Cantor apparently became bored with the proceedings, "so he decided to take a nap right in the middle of the crossexamining." There was also a chilling security breach. During a hearing recess, Cantor walked over to one of Warren's attorneys and loudly proclaimed that Cornwall would be flying to Oregon that night to visit his mother, who had become seriously ill. Police escorted Cornwall to Sky Harbor Airport that night. Curiously, Warren was on the plane Cornwall was planning to take to Portland. Cornwall was quickly hustled off. Warren's presence was more than a coincidence. Warren was bound over to face trial. Despite the prosecutorial blunders, the detailed police work had come up with more than enough evidence. But not for long. On August 15, 1975, citing minor inconsistencies in Cornwall's testimony, Berger suddenly announced that he was abandoning plans to prosecute Warren. At issue was Cornwall's testimony that he had cashed a check on March 5, 197 1, and given the money to Warren for transmission to Talley. Actually, bank records revealed that the check had been cashed four days later. Police were incredulous. Cornwall had been testifying from memory. He had done an amazing job. It was inevitable that there would be minor inconsistencies. But Berger, as prosecuting attorney, had used it as an excuse to dump the case. Warren was freed. And Cornwall, who had originally been promised probation, was sentenced to serve ten to twenty years in the Arizona State Prison. He arrived there in September 1975, joining another Warren associate, Tony Serra, who had provided the first clue to the real estate payoffs more than four years before. Serra had been behind bars for a year, after being convicted of eleven counts of land fraud. >From August 1976 through January 1977, IRE land fraud source Dick Frost had been in contact with Serra. Serra had claimed to know the whereabouts of other incriminating evidence against Warren. He had also voiced fear for his life. And on January 3, 1977, before that evidence could be checked out, Serra was murdered. Ned Warren, Sr., had certainly lived a charmed life, the IRE reporters concluded. Born Nathan Waxman, Warren was always the master con man, charming and witty. Among his many scams were selling advertising time on radio stations with which he had no connection; buying sheets of rolled steel on credit during World War II and then selling them the same day without ever repaying the original loan; and collecting $39,000 from well-heeled investors for a musical comedy he claimed to be producing for Broadway that, of course, never opened. It was the latter con that first ran him afoul of the law. He spent nearly two years in Sing Sing, where prison psychologists found him to be "very superior" in intelligence, with an IQ of 133, but hampered by an "inferior moral and social capability." He came to Arizona in 1961, with three cars, his wife, his mistress, three kids, two dogs, a cat, and just $800 in his pocket. At the time, he was on probation for another conviction, this one for concealing assets in the bankruptcy of one of his many shell companies. In Arizona, he saw great opportunity. Though his prison record prevented him from getting the necessary real estate sales license, he went right ahead anyway, plunging into the buying and selling of mostly worthless desert land. IRE reporters had uncovered documents and letters which proved that real estate commissioner Talley knew that Warren was operating illegally but refused to do anything about it. Exactly when Warren cemented his ties to Talley was unclear. But the reporters learned that in 1965 Talley had contacted Lee Ackerman, a Warren business partner and once an unsuccessful candidate for the Arizona governorship. According to a number of sources developed by the team, Talley explained to the Warren pal that his son was in financial difficulties and needed to borrow some money. Ackerman complied, giving the son of the real estate commissioner $7,000. Seven weeks later, J. Fred Talley, Jr., showed up as the new sales manager for Diamond Valley, one of Ackerman and Warren's land companies. It was shortly after he hired Talley's son that Warren got his real estate license. It had been personally approved by the commissioner himself. The real estate commissioner wasn't Warren's only friend. Reporters learned that George Brooks, an investigator for the Maricopa County prosecutor's office, received $2,000 from the Warren-financed Great Southwest Land and Cattle Company. Brooks, who claimed the money was a loan, used it as the down payment on a mountain cabin. A jury believed him. He was acquitted of a bribery charge. With connections like that, the reporters had little doubt as to why Warren operated with such impunity. Since Warren had first contacted the team in early November as the self-professed middleman for John Harvey Adamson, the Don Bolles murder suspect, reporters had kept the lines of communication open with him. Warren knew that he was the subject of intensive investigation by the team. Indeed, he almost seemed to enjoy it. In mid-January, their research complete, the team was ready to talk with him. An interview was arranged for the evening of January 23, 1977. Warren, who had never conducted a major, on-the-record meeting with the press, amiably agreed to it. For three days before, Drehsler and Greene, assisted by Dick Cady, the Indianapolis reporter acting as assistant team leader, labored on the bulging Warren files, preparing a twenty-three-page interview outline which would be used to guide them during the Warren questioning. Drehsler and Greene left the IRE office shortly after five that afternoon. They expected to be back by nine or, at the latest, ten. Instead, the interview would last until one o'clock. Cady, who remained behind at the Adams, thought the confrontation between Greene and Warren was historic. He dubbed it: "The Godfather meets God." Warren lived in a spacious and incredibly plush house, worth a quarter of a million dollars, built into the side of Camelback Mountain, just east of Phoenix. As the reporters arrived, Warren's wife, Barbara, an attractive blonde in her early fifties, greeted them with a young Doberman pinscher she was training in the front yard. The pup was the replacement for the one that had died the previous fall, the one Warren had broken down and cried over the day he met Drehsler to discuss the Adamson deal. Warren himself, dressed in an open-necked sports shirt, soon came out and warmly shook hands. As his wife and the frisky pup walked away, he cautioned the reporters not to talk about the dead animal in front of his wife. "It still makes her cry," he said as he escorted the visitors inside the house. He led them into a large, expensively furnished family room, one wall of which was the actual side of the mountain. He was the perfect host, pouring drinks for the reporters from a well-equipped bar as his wife brought out a tray of hors d'oeuvres. "I respect him," she said to Drehsler, nodding towards Greene, who was chatting with her husband. "He must have a lot of money behind him to do so much research. He's well prepared. I can't help it, but I like him." A few minutes later, she again turned to Drehsler. "You know, if anything ever happens to Ned or me, I can guarantee that the lid will blow off this state." She would not be more specific, despite the young reporter's gentle prodding, and, in a few minutes, politely excused herself "so you men can talk." Warren himself, meanwhile, was friendly, though Drehsler detected a bit of tightness in his voice and a nervous habit of continuously tapping his fingers together. He had one condition to the interview. "I'd prefer it if you didn't tape-record this or take notes," he grinned. "It distracts me and makes me nervous." The reporters reluctantly agreed. It would be difficult to remember everything, but, if that was the only way Warren would talk, they had little choice. Fortunately, there were two of them. What one forgot or was vague on would, they hoped, be remembered by the other when it came time to prepare a memo on the evening. Warren wanted the reporters to know that he sympathized with them on the murder of Bolles. "That was a stupid and needless act," he said. "Look what happened. You kill a reporter and immediately there's fifty other reporters all over the place." Warren said Bolles had done only one major series on him, mostly based on his criminal record. "I didn't like it, but there wasn't much I could do." He also realized that in the eyes of the media and of many in law enforcement, he was a leading suspect in the Serra and Lazar murders. "I can only tell you that I had nothing to do with them. I will say that I talked to Ed Lazar before he went to the grand jury and that he assured me that he wasn't going to cooperate, that he was going to take the Fifth. And I was shocked and surprised to find out that he was, indeed, talking. But I'm not a murderer. That's not my style." The reporters wanted to know whether Warren really had been paying off real estate commissioner Talley. He grinned. "Let me say this. Talley did take. He once told me personally that he got an average of $10, 000 a month from the various land companies." "But did you yourself directly pay him?" asked Greene. Again, Warren smiled and hedged. "I never ordered anyone to pay Talley." When Greene and Drehsler told Warren that they had a number of sources (Cornwall's statements and the secret transcript of Lazar's grand jury testimony) all agreeing that the various Warren companies had paid the commissioner a minimum of $200 monthly, Warren didn't argue. His reluctance to incriminate himself in front of the reporters was understandable, obviously based on the fact that the statute of limitations on such crimes had yet to expire. "What about Talley's son?" asked Drehsler. "What about him? I gave him a job," said Warren, who confirmed that he did so at the request of the father and that the son was paid $200 a week for "doing nothing." Warren conceded that he got his real estate license without paying a state fee or, as required by law, taking an examination. After it was issued, Warren told the reporters in carefully chosen words, he was "present" in Talley's office and witnessed a $200 cash payment to the commissioner. Warren himself did not make the payment. Instead, it came from another man, who just happened to be one of Warren's business pals. "Like I said, I never ordered anyone to pay." He also admitted that he or his employees and business pals had made "loans" to both James Keiffer, Talley's chief investigator, and George Brooks, the Maricopa County prosecuting attorney's investigator. Asked why, he would only say that the benevolence gave him "a piece of leverage" with governmental agencies which regulated his business or were in a position to do him "prosecutorial harm." There were other friends of influence whom Warren spoke about, friends like Harry Rosenzweig, the powerful state GOP boss and confidant of the Goldwater brothers. "Harry and I developed a cordial relationship," said Warren. "We've met over the years a number of times, usually for lunch." He said that he had never received any political favors from Rosenzweig. In fact, Warren claimed, it was the other way around. "Harry would solicit me for political donations." Warren said he usually complied, contributing to the state Republican committee and to the campaigns of various GOP candidates, though never more than $100 at a time. The interview lasted for nearly seven hours, with Greene and Drehsler going over dozens of the complicated deals and land companies Warren had started and, just before they went broke, unloaded to unsuspecting buyers. About 10:00 P.m., Warren drove the reporters to a nearby restaurant, where the conversation continued. They returned to his house shortly after midnight. Their arrival was watched by Wendland and Becker, who, alarmed when Greene and Drehsler failed to return to the Adams, had driven out to Camelback Mountain to stake out Warren's house and watch over their coworkers. "Look, I admit it. I was a thief. And I was a good thief, too," Warren told Greene at one point. "It's not that I had to be. My family had money, and I didn't have to steal for sociological or economic reasons. I stole because I enjoyed the challenge and the thrill of it, the matching of wits." This had been a recurring theme all night. Warren made it perfectly clear that he loved living by his cunning, and had made millions from it. "You know," he said, shortly before the interview ended, "one way to guarantee a cleanup of the real estate industry in Arizona would be to make me the real estate commissioner. I know every trick, every way to steal. I could clean this state up in six months." The reporters believed that Warren was serious. It would be the ultimate challenge for him, straightening out the gigantic mess he had made. As they shook hands and were about to leave, Greene looked for the interview outline he had brought along. Since Warren had not allowed the taking of notes, the twenty-three-page memo had been placed on a foyer table shortly after they had arrived. It was not there now. Warren made an elaborate search of the house, claiming that he had even awakened his wife to ask her if she had seen it. It was nowhere to be found, he apologized with a shrug. It made no difference, Greene said. They had covered most of the points anyway. They bid farewell. Back at the hotel, Greene chuckled. "Mark my words, by ten o'clock tomorrow morning, we'll get a call from Warren. The outline will have suddenly reappeared." Greene was off by an hour. At nine o'clock, Warren telephoned. He'd have the memo sent right over to the hotel. His wife had mistakenly believed it to be some of her husband's own notes and had placed it on his desk, he explained. "Come on, Ned," Greene said. "Who's kidding who? But tell me, what did you think of it?" There was a slight pause, then a chuckle. "Not bad, not bad at all. I'm'-glad you guys are reporters instead of cops. You did your homework." The Warren interview was one of the best, most of the reporters felt. Warren himself seemed to epitomize much of what was wrong with Arizona. He had seen opportunity and seized it. No matter that he had broken the law, that people had died, that the life savings of the land swindler's victims had been stolen. It was all some sort of marvelous game, a game without rules, to be won by the player with the most nerve. That Warren felt no guilt and, incredibly, was borne no animosity by his neighbors in Arizona was evident by his plush, Camelback Mountain home. Back East, one so notorious as Warren would be careful to keep a low profile. Not so in Arizona. Out front of his sprawling house, in bold, foot-high letters, the name "N. J. Warren" was proudly posted next to his winding blacktop driveway. It was if he was showing off the fruits of his criminality. And none of his neighbors seemed to mind. pps. 209-221 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. 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