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Racketeering Case Against Imelda Marcos Goes to Trial This Week

March 17, 1990

NEW YORK (AP) _ Four years after Ferdinand Marcos’ ouster from power and six months after his death, his widow goes to trial this week for her role in the alleged plunder of millions of dollars from the Philippine treasury.

The racketeering case against Imelda Marcos begins Tuesday with jury selection in Manhattan’s federal court. The testimony, chronicling a tale of international intrigue and rich and famous players, is expected to take months.

Prosecutors will try to prove Mrs. Marcos helped in the illegal transfer of more than $160 million, allegedly obtained in the Philippines through bribes, kickbacks and embezzlement, to buy four commercial buildings in Manhattan.

Mrs. Marcos, 60, also is accused of defrauding banking institutions of more than $165 million in financing that real estate and of obstructing justice in a civil lawsuit filed by the Filipino government to reclaim the properties.

The government has said her prosecution will not be affected by the death of her husband, who was the central figure in the October 1988 indictment. Marcos had been severed from the case because of ill health before he died Sept. 28 in exile in Hawaii.

Despite the paper trail that the government will follow, the trial won’t lack personality - not when its central figure left behind 1,060 pairs of shoes in the Philippines, wore a full-length chiffon gown to her arraignment and who has friends like tobacco heiress Doris Duke to post her $5 million bail.

Mrs. Marcos’ co-defendant, Adnan Khashoggi, is somewhat of a celebrity himself. The jet-set Saudi financier is accused of helping the Marcoses hide their ownership of the properties through false documents. He also is said to have been the main financier and middleman in the Iran-Contra affair.

Much name-dropping is expected. Pretrial papers filed by prosecutors include correspondence between the Marcoses and Ronald and Nancy Reagan and mention of actor George Hamilton as one of many unindicted co-conspirators.

Mrs. Marcos’ lead attorney, Gerald Spence, is sure to draw attention as the trial progresses. Spence, of Jackson, Wyo., has a showy courtroom manner and a penchant for Western attire.

He has been called a maverick for his choice of clients, like the heirs of Karen Silkwood, and for his books criticizing the criminal justice system.

In an interview, Spence said he felt the prosecution of Mrs. Marcos was unfair in light of the close relationship she had with five U.S. presidents during Marcos’ 20 years in power. Marcos was ousted as president in 1986 after a popular revolt.

″Now suddenly these people become the enemies of this nation when it’s convenient and useful to do so,″ Spence said.

″There couldn’t be a more frustrated and lonely person in the world than a widow who’s been charged with racketeering, not only by her own government, but by the government of the United States of America,″ he said earlier in an interview in the Jackson Hole News of Wyoming. ″She’s a helpless widow without many friends. I want to be her friend. I want to represent her.″

He declined to preview his defense strategy or say whether Mrs. Marcos would testify.

Her lawyers had tried unsuccessfully to get the charges thrown out before the trial. U.S. District Judge John Keenan denied their claims that Mrs. Marcos couldn’t be prosecuted because she had been abducted to the United States after the 1986 revolt and because she had immunity on the grounds that her husband was a head of state.

Earlier this year, Mrs. Marcos rejected a proposed plea bargain that attorneys said would have allowed for a suspended prison sentence. Attorneys in the case said negotiations broke down over the issue of how much money Mrs. Marcos would have to forfeit as part of the plea bargain.

The government’s case against Mrs. Marcos was bolstered by the recent guilty plea of a co-defendant, Rodolfo Arambulo, the former president of the Los Angeles-based California Overseas Bank.

Prosecutors had alleged that the bank was partially owned by Marcos and was involved in some of the illegal financial transactions. Arambulo, whose plea to a lesser charge of conspiracy was hinged on his cooperation, is a potential witness against Mrs. Marcos.

The bank itself, which was also to have gone on trial with Mrs. Marcos on charges of racketeering and racketeering conspiracy, pleaded guilty Friday to wire fraud. Through its attorney, the bank admitted that certain officers had opened fictitious accounts to enable transfer of funds to the United States from the Philippines. The plea did not specify who received the funds.

The specific charges to which Mrs. Marcos has pleaded innocent are racketeering, racketeering conspiracy, obstruction of justice and mail fraud. If convicted of all the charges, she faces a maximum prison term of 50 years in prison and a $1 million fine.

Under the racketeering laws, prosecutors are seeking all property obtained through illegal activity. For Mrs. Marcos, that includes the four New York buildings, foreign bank accounts and other property interest she holds.

Khashoggi, who was a fugitive until his arrest in Switzerland last summer, had originally been charged with racketeering, mail fraud and obstruction of justice.

But because Swiss authorities declined to extradite him to the U.S. on racketeering, he is being tried only on the remaining two charges. Together they carry a maximum sentence of 10 years in prison and a $500,000 fine.

Five other people named in the indictment are fugitives. They are Bienvenido Tantoco Sr., former Philippine ambassador to the Vatican; his wife, Gliceria, once president of a Philippine department store; their son, Bienvenido Tantoco Jr.; former California Overseas Bank chairman Roberto S. Benedicto; and Karl Bock Peterson, an associate of Khashoggi.

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