U.S. says Gresham envisaged Va. disaster


Charles E. Gresham Jr., characterized by his friends as a doting father and a caring neighbor, "coldly calculated" the destruction of a square-mile area of Norfolk, Va. -- a catastrophe that could have caused thousands of "casualties and unprecedented environmental damage," a federal prosecutor said yesterday.

"He was willing to endanger the lives of many innocent people," Assistant U.S. Attorney Ira L. Oring said at a hearing in which Mr. Gresham was denied bail.

Mr. Gresham, 57, of the 3800 block of Spring Meadow Drive in Ellicott City, is charged with plotting to blow up a giant tank at Norfolk's Allied Terminals that contained 2.2 million gallons of sodium hydrosulfide, which he was storing there. Authorities say Mr. Gresham attempted to destroy the chemicals to collect $2.7 million in insurance.

On Feb. 2, two pipe bombs were discovered attached to the tank containing Mr. Gresham's chemicals and another tank containing methanol. Because of faulty fuses, neither detonated.

As a precaution, authorities evacuated thousands of residents from the port area.

Last Saturday, the FBI arrested Mr. Gresham, a one-time professor at the University of Baltimore and Towson State University, at his home and two alleged accomplices were arrested in Arizona.

Authorities say the case remains under investigation, and that the person who planted the bombs is still at large.

They also said that Mr. Gresham had once before attempted to ignite a bomb at Allied Terminals.

"Bombs were placed on the tanks several months before and had to be removed by someone at [Mr.] Gresham's behest because they did not go off," Mr. Oring said.

Although Mr. Gresham has no criminal record, Mr. Oring revealed that Mr. Gresham ran afoul of authorities earlier. In May 1988, Mr. Gresham signed a consent decree admitting that he had sold insurance through several companies that were not licensed to sell it.

He agreed to pay $25,000 in civil penalties, but a subsequent investigation by the Maryland attorney general's office did not result in criminal charges.

At yesterday's hearing in federal court, law enforcement authorities presented the most dramatic depiction yet of what they believe would have happened had the pipe bombs detonated in Norfolk.

The explosion, Mr. Oring said, would have sent missiles flying perhaps as far as a half-mile away, possibly causing secondary explosions at nearby tanks containing heating oil and gasoline. As many as 5,000 deaths may have occurred, Mr. Oring said.

In addition, Mr. Oring said the explosion could have caused the release of toxic chemicals and medical waste stored at Allied and at other nearby facilities. Those chemicals, he said, would have poisoned the atmosphere as well as the nearby Elizabeth River.

Mr. Gresham was well aware of the potential damage, and discussed it with one of his accomplices, Mr. Oring said. "They both agreed that it would take out a one-square-mile area," he said.

However, a chemical and explosives expert who was interviewed after yesterday's proceedings described the government's picture of the potential destruction as "patently absurd."

William Cruice, vice president of Hazards Research Corp. of Mount Arlington, N.J., said the chemicals in the vicinity of the pipe bombs were highly unlikely to have caused major damage beyond the explosion site.

Authorities said a New Jersey-based chemical company last year paid Mr. Gresham's company, Applied Technology Inc., $983,000 to dispose of the sodium hydrosulfide.

However, they said Mr. Gresham had been unable to find an overseas buyer for the chemical and was four months behind in paying storage fees. In December, authorities said, he took out a $2.7 million insurance policy.

At the hearing, Magistrate Paul M. Rosenberg refused to release Gresham on bail, even though his lawyer, Joshua R. Treem, offered to post all of Mr. Gresham's property and those of his daughter.

Despite more than two dozen letters of support from Mr. Gresham's friends and neighbors, Magistrate Rosenberg said he considered Mr. Gresham's eventual conviction on the charges a certainty and therefore his incentive to flee quite strong.

"I'm satisfied that the evidence is overwhelming, that a conviction is inevitable and that he is likely to receive the maximum sentence," Magistrate Rosenberg said, later adding, "I'm satisfied he has every reason to flee and no reason whatsoever to face the music."

Yesterday's hearing and other information acquired by The Sun provided a much more complete picture of Mr. Gresham as a businessman involved in far-flung and diverse activities. One of them prompted an investigation by the Maryland Insurance Division and a second investigation by the Maryland attorney general.

In 1986 Mr. Gresham created a company in the Bahamas known as Oak Charter Insurance Ltd. to sell liability insurance. But state records showed that aside from $100,000 he obtained from mortgaging a property he owned, the company had virtually nothing but paper assets. Neither Mr. Gresham nor Oak Charter were authorized by the state of Maryland -- or any other state -- to sell insurance, records show.

State officials familiar with Mr. Gresham's dealings said he started the company because he could not obtain pollution liability insurance for his Maryland company, Applied Technology Inc., described in state documents as a solid, chemical and hazardous waste hauler and management firm.

Mr. Gresham created subsidiaries to the insurance company, such as the Oak Charter Insurance Title Insurance Company of Nassau. He started dummy insurance companies in Virginia, such as Anchor/Eagle Insurance Co. and Anchor Insurance Ltd., whose address in Chesapeake, Va., was a vacant lot, a state official familiar with the operation said yesterday.

Mr. Gresham joined forces with a Columbia insurance company known as Affiliate Services Inc., which employed his daughter, Suzanne M. Gresham, and daughter-in-law, Sally L. Gresham, as "account executives," selling insurance which was backed by insufficient assets, state records show.

The companies began selling millions of dollars in liability insurance nationwide to legitimate companies -- and through legitimate insurance brokers -- that were desperate to obtain such coverage, state records show.

"At that time, commercial liability insurance was very expensive and hard to get," said Thomas P. Raimondi, Maryland's associate deputy insurance commissioner, whose department investigated Mr. Gresham and his companies.

In 1987 the Maryland insurance commissioner issued his first order for Mr. Gresham to cease and desist. It was ignored.

In the winter of 1988, the Insurance Division of the Maryland Department of Licensing and Regulation again tried to shut the companies down and succeeded, but only after two weeks of hearings and months of negotiations.

Mr. Gresham signed the consent agreement and agreed to cooperate with investigators in pursuing insurance brokers and agents who knowingly sold the unlicensed insurance. He also agreed to provide a complete list of insurance contracts sold in the United States and pay back any "unearned" premiums to policyholders.

His daughter-in-law signed an agreement that she would not engage in any insurance business operated or financed by Mr. Gresham for five years and paid $500 in civil penalties.

Federal prosecutors said Mr. Gresham's Applied Technology has two subsidiaries in Brazil, which are run by his son James Gresham.

Prosecutors also submitted into evidence Charles E. Gresham's passport, which shows extensive travel to South America and the Middle East.

Some of the board members of Mr. Gresham's companies have told The Sun that at one time he planned to build incinerators in Brazil, though, they said, to their knowledge the projects were never completed.

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