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American Barred From Cache of Bullion

BLOOMBERG NEWS

Frederick Johnston, an American executive convicted of hiring hit men to kill associates who ousted him for allegedly misappropriating company funds, has been temporarily prevented from retrieving $32 million in gold bullion stashed in Switzerland.

A Delaware judge barred Johnston from asking British authorities to return the gold account’s documents--seized after his arrest--until the judge hears arguments about who owns the bullion, according to court papers.

Johnston, 72, former chairman of the holding company that owns electronics maker Statek Corp. in Orange, is serving six years in a British prison. He was convicted of paying Irish criminals to kill former business partner Miklos Vendel and others involved in lawsuits over control of Statek and millions missing from the company.

British police were tipped about the murder contracts before they were carried out.

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In 1996, a Delaware judge ousted Johnston as Statek’s controlling shareholder after Vendel accused him of siphoning company funds to prop up his lavish lifestyle. Vendel, a Swiss businessman, sued in Delaware to recover that money.

When British police arrested Johnston in London in April 1998 on murder solicitation charges, they seized documents concerning the gold account. Johnston has been pushing London police to turn the papers over to his lawyers, Vendel contends.

Allan Pepper, a New York attorney representing Johnston in the Delaware case, said he doesn’t believe the account documents are legitimate or even belong to Johnston. Police have only a copy of what allegedly is a certificate for an account containing gold bullion, Pepper said.

“I don’t know who it belongs to or if it’s real,” Pepper said. “I only know it isn’t his.”

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Vendel’s investigators have struggled “to retrace the tens of millions of dollars that were looted from Statek,” the Swiss businessman’s lawyers said in court filings.


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