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Former CIA Agent Says He Was Vulnerable To Alleged Con Man

August 28, 1985

HONOLULU (AP) _ Despite 20 years of spy work, a former CIA Hawaii bureau chief said he was ″vulnerable″ to a man he befriended and worked for before the man was accused of defrauding some 400 investors of $22 million.

″I don’t want it to appear that I’m a patsy,″ Jack Kindschi testified in federal court. ″But sometimes the head follows the heart.

″I believed I could read people quite well,″ said Kindschi. ″I thought I could tell the good guys from the bad guys.″

Kindschi on Tuesday ended three days of testimony in the fraud, perjury and tax evasion trial of Ronald R. Rewald, who founded the Honolulu investment counseling firm Bishop, Baldwin, Rewald, Dillingham & Wong in 1978. It was declared bankrupt in September 1983.

Prosecutors allege few legitimate investments were made, and that Rewald spent most of the money on a fancy home, cars, sex and a fast lifestyle. Little has been recovered by investors.

Rewald contends the CIA directed him to set up the firm as a cover operation and to act like a flamboyant businessman in order to make contact with wealthy foreign financial and political figures for the CIA.

The CIA acknowleges it used the firm for telephone and telex purposes, and to provide limited cover for agents. But it says its ties to the company were limited, and had nothing to do with the firm’s financial activities.

Kindschi conceded he received a leased car from Rewald before he resigned from the spy agency but denied the action violated CIA rules.

″Isn’t it true you were enriching yourself off this cover operation?″ said Deputy Federal Public Defender Brian Tamanaha, representing Rewald.

″That’s a bald-faced lie 3/8″ Kindschi replied.

Under questioning by U.S. Attorney John Peyton, Kindschi testified that his trust had been tempered by years of CIA work, but that he still was ″vulnerable″ to Rewald, who appeared to be ″an all-American boy.″

Kindschi, who befriended Rewald before resigning from the CIA in 1980 after four years as Honolulu station chief, later went to work for Bishop Baldwin. He lost $140,000 of his own money and $100,000 of his mother’s money that had been invested in the firm.

After joining Bishop Baldwin as a consultant, Kindschi was paid up to $7,500 per month.

A co-founder of the firm, president Sunlin Wong, is serving a two-year prison term after pleading guilty to charges of securities and mail fraud.