UCLA Extension Cuts Seminar by Offshore Bank Promoter

The head of UCLA Extension’s business and management programs has abruptly canceled a July 11 seminar that was to be run by Jerome Schneider, a 33-year-old Los Angeles offshore bank promoter and head of WFI Corp..

Warren J. Pelton, the UCLA Extension official, disclosed his action last week when a Times reporter called to question him about the university’s sponsorship of Schneider’s program entitled “Using the ‘Switzerlands of the Pacific’ for Privacy & Tax Protection.”

In response to a question, the educator acknowledged that he was aware of the controversy surrounding Schneider’s activities.

However, Pelton said he was “not at liberty to say” if he had received inquiries or complaints about Schneider’s being chairman of the advertised seminar.

In answering questions about why he canceled the July 11 scheduled seminar, UCLA’s Pelton said the topic was getting outmoded because of indications that tax shelters may be eliminated in the proposed tax system overhaul.

Later in the interview, he cited as another factor in his decision an April news article about the sales literature used by Robert G. Buchsbaum, another WFI officer who was to join Schneider on the seminar program.

All in all, Pelton said, he decided that the program “doesn’t fit our image.”

The UCLA seminar was advertised in The Times June 3, about two weeks after the U.S. Comptroller of the Currency issued a warning for American banks to be wary of checks originating at any of the more than 100 “offshore shell bank” licensees registered in Majuro, Marshall Islands, a U.S. territory. Several of the many offshore banks founded and sold by Schneider and WFI have been the subjects of fraud allegations against subsequent operators.

The latest case was Republic Overseas Bank Ltd., licensed in Majuro, whose Nevada-based operators, James L. Attrian and Donald D. Smith, were accused last month in a Securities and Exchange Commission suit of defrauding U.S. investors in the alleged sale of at least $55 million worth of unregistered securities.

Temporary Closure

At about the same time, the government of the Marshalls temporarily closed Sterling Bank & Trust Co., a one-time Schneider bank in Majuro, after it allegedly issued a worthless $500,000 cashier’s check that was used to defraud a brokerage office in Washington, D.C.

J. David (Jerry) Dominelli, the San Diego financier who pleaded guilty to massive financial fraud, acquired his offshore bank in Montserrat from Schneider, according to federal authorities. A federal prosecutor said that Dominelli, who is scheduled to be sentenced today, once sent two employees to one of the Los Angeles seminars that Schneider staged himself.

Two years ago, the staff of the permanent investigations subcommittee of the Senate Governmental Affairs Committee released a report charging that WFI had contributed to “the proliferation of offshore private banks” of the type used to hide illicit stock deals.

The report said that WFI had chartered and sold 150 banks to American clients in such Pacific and Caribbean islands as St. Vincent, Montserrat, Anguilla and the Northern Marianas. It added:

“These banks could be purchased by WFI for less than $10,000 and were resold to WFI clients for as much as $37,000 each. We have determined that illegal uses abound and legitimate uses are extremely limited.”

Schneider, who last week was reported to be out of the country until early July, testified at a May, 1983, hearing of the subcommittee that his bank deals “are completely legal and aboveboard.”

Under questioning by a senator, he acknowledged that at least two purchasers of his banks were subsequently charged with bank fraud. He said he tries to investigate every purchaser to prevent criminals from owning banks.

Buchsbaum, one of two persons scheduled to join Schneider as speakers at the July 11 seminar, was reported by WFI headquarters in Century City on Thursday to be “out of town until Monday.”

The third scheduled speaker was William K. Norman, partner in charge of international business department of the law firm of Finley, Kumble, Wagner, Heine, Underberg, Manley & Casey here, which is defending Republic Overseas Bank in the SEC case.

Asked about the reasons for the seminar’s cancellation, Norman said he understood that one was that the university “felt the subject was not consistent with the educational purposes of UCLA.”