L.A. Man Held in Contac Poisoning : Stock Purchases Link Suspect to Spiked Capsules

A former trainee at a Merrill Lynch stock brokerage house in San Marino was arrested at Los Angeles International Airport on suspicion of spiking Contac and other over-the-counter drug capsules with rat poison in a scheme to profit on the manufacturer’s stock, the FBI announced today.

Edward Arlen Marks, 24, who had been living for the past month in a modest apartment in Temple City, is the first person charged in the string of drug-tampering cases across the nation that have claimed at least nine lives since 1982.

No persons were believed injured in the case involving Marks. Federal drug officials say the Warfarin poison he is suspected of placing in nine Contac, Teldrin and Dietac capsules found in Orlando, Fla., and Houston on March 19 and 20 was potent enough to sicken, but not kill, anyone who swallowed them.

Investigators said Marks--who is believed to have acted alone--was linked to the case by a fingerprint lifted from a capsule found in Orlando and through suspicions raised by his “unusual” stock purchases in the SmithKline Beckman Corp., manufacturers of the drugs.

They said the major breakthrough came when three workers at the Merrill Lynch office in San Marino identified a voice on a recorded threatening phone call as that of Marks.

Arrested at Airport

The FBI said Marks was arrested without incident at about 8:45 p.m. Thursday as he walked to his car at an airport parking lot after returning here on a People’s Express flight from his native Boston. Neighbors in Temple City said he had been away for about two weeks.

Marks was was scheduled to be arraigned at the U.S. courthouse in Los Angeles this afternoon on one count of tampering with consumer products, a charge that carries a maximum penalty of 10 years in prison and a $50,000 fine.

At a press conference in West Los Angeles this morning, Richard Bretzing, special agent in charge of the FBI’s Los Angeles office, indicated that between March 19 and 21 a male identifying himself only as “Gary” telephoned SmithKline Beckman offices and numerous news media, indicating that tainted capsules could be found at retail outlets in Orlando and Houston.

Agents said Marks was trying to induce the company to withdraw the products from the shelves as part of a scheme to manipulate SmithKline Beckman stock.

The discovery of the tainted capsules in Orlando and Houston prompted an $8-million recall of the three products by SmithKline, and a $900,000 reward for the poisoner was offered by the Proprietary Assn., a group of drug manufacturers.

After the reward was posted, a man called a Philadelphia television station to warn: “This is Gary. Your $900,000 isn’t enough. I’ll take more.”

As the FBI investigation continued, Marks’ fingerprint reportedly was found on a Teldrin capsule in Orlando, and inquiring agents were told by Pacific Stock Exchange sources that an unusual number of “put” options on SmithKline Beckman stock--a total of 360--had been placed by Marks on March 18 and 19.

The sources explained that through such options, an investor can make substantial profits if the value of a stock drops. In fact, despite the recall of the SmithKline Beckman products, the stock’s value has actually risen since Marks purchased the options, and investigators said he apparently realized no profit from the scheme.

The identification of Marks’ voice by Paul Clause, John Moran and Stephen Garrett at the Merrill Lynch office in San Marino convinced agents that they had the right man.