An Ellicott City businessman and former University of Baltimore vice president was arrested at home by FBI agents yesterday in connection with last week's failed attempt to blow up two giant chemical storage tanks in Norfolk.
FBI agents said that Charles Edward Gresham Jr., 57, of the 3800 block of Spring Meadow Drive, owned 2.2 million gallons of sodium hydrosulfide stored in Norfolk and allegedly wanted to destroy the tanks to collect $2.7 million in insurance funds.
The discovery of two bombs last Monday touched off fears of international terrorism related to the crisis in the Persian Gulf. But at a news conference yesterday, Joseph V. Corless, special agent in charge of the Baltimore FBI office, said the agency quickly ruled that out.
"It was strictly insurance fraud," he said.
Two men the FBI described as "business associates" of Mr. Gresham -- Joseph W. Openshaw, an electrical engineer from St. Johns, Ariz., and Cecil Howard Ross of Glendale, Ariz. -- were arrested Friday night in Phoenix, Ariz., and also charged in the alleged conspiracy.
FBI agents said Mr. Gresham planned to clear $500,000 from the insurance payment after expenses, with the two Arizona men splitting another $500,000.
Early last Monday, a square-mile area surrounding Allied Terminals Inc. was evacuated as bomb crews removed the two devices. One was attached to a 3-million-gallon methanol storage tank and the other to the tank holding Mr. Gresham's sodium hydrosulfide.
FBI agents said the plan was to use the highly volatile methanol to detonate the second tank. But the fuses did not work.
"If any one of them would have gone off, it would have caused a massive explosion," a Norfolk police spokesman said Monday.
At yesterday's news conference, Mr. Corless said that storing the chemical in Norfolk was costing Mr. Gresham $16,000 a month and thathe was four months behind on his payments.
The insurance policy, whose value had been boosted by $2 million in December, would have expired Feb. 20, the FBI said.
The Maryland investigation began Monday, when an informant who had heard news reports of the bombs called the FBI in Norfolk to say that Mr. Gresham had approached him in an unsuccessful effort to recruit him to set the bombs, Mr. Corless said.
The FBI first interviewed Mr. Gresham, owner of a firm called Applied Technology Inc., the same day, according to James Dearborn, an FBI spokesman.
According to Mr. Corless, Mr. Gresham was apparently having trouble selling his inventory of sodium hydrosulfide, a chemical used in tanning, paper-making and mining. The Environmental Protection Agency has banned use of the chemical in this country, Mr. Corless said.
Special Agent John J. Callahan of the Phoenix FBI said that Mr. Gresham apparently considered dumping the chemical in the ocean before dropping that idea in favor of an insurance scheme.
In December 1990, Mr. Gresham decided to increase the insurance coverage on the chemicals by about $2 million, Mr. Callahan said. Tosupport the need for more insurance, Mr. Gresham and Mr. Openshaw apparently "created fraudulent documents . . . saying they're about to sell these chemicals in China."
Yesterday afternoon, agents of the FBI and the federal Bureau of Alcohol, Tobacco and Firearms were searching Mr. Gresham's home and four of his cars.
A resident in the well-to-do neighborhood of homes worth more than $250,000 said she could not believe her neighbor of 20 years had been arrested.
"It's a lovely family," said the woman, who asked that her name not be used. "I can't believe that. This is so completely out of character."
She said that Mr. Gresham and his wife had two grown children, and she called him "an outstanding neighbor."
Mr. Gresham, a 1958 graduate of the University of Baltimore, served as an ordnance specialist in the military. He was an industrial engineer before he was appointed an assistant professor at the University of Baltimore School of Business in 1970.
In 1972, he was named vice president for development and alumni affairs, a position he held until 1982, according to a university spokeswoman. He later taught business at Towson State University.
Yesterday, after several hours of questioning at FBI headquarters in Woodlawn, Mr. Gresham was transferred to Baltimore County's Woodlawn precinct to await an appearance before a federal magistrate tomorrow.