The New York State attorney general's office is investigating Broadway producer Adela Holzer as a result of complaints by individuals who invested tens of thousands of dollars with her in nontheatrical business ventures and believe they have been taken, it was learned today.
The Securities and Exchange Commission also has received complaints, according to a source there, and plans to coordinate its probe with the New York State attorney general.
It is not known how much money is involved in total, but a number of sources put it in the million of dollars.
Holzer, who is mainly known for producing such Broadway shows as "Hair," "Sherlock Holmes," "The Ritz," "Sleuth," and the current hit, "Monsters," said in a telephone interview that she was cooperating fully with the attorney general's investigation, had "nothing to hide," and promised that "nobody is going to lose their initial capital" though it might take some time before they are paid off.
The somewhat mysterious deals supposedly involved financing trade shipments of sugar, cement, Toyota trucks, automobile spare parts and other items to Indonesia and otehr countries with expectations of payoff returns as high as 400 per cent, according to several investors. Real estate investments in Holzer's native Spain also are being questioned.
A number of investors received handsome payouts on the initial deals, according to the sources, but after these returns attracted even larger investments, the payments from Holzer stopped around the middle of 1976.
Holzer has been trying to assuage the anxious investors with claims that money on deposit in Jakarta has been temporarily impounded by the Indonesian government because of an accidentally late tax payment according to sources, and that everything should still turn out all right. The story has been modified severa times, they add.
"Probably by July everything should be O.K." Holzer said today, noting there was currently a "big turmoil" in Indonesia but there was an election coming up in June that should ameliorate the situation.
She declined to be specific about the problem she was having, claiming she feared she could jeopardize negotiations that are going on with the Indonesians.
"I just cannot get the money out right not," she said.
Holzer heatedly denied that any fraud or misrepresentation had been involved in what she termed "barter deals."
"My name will be clean and it was never dirty," said Holzer who is widely known and respected within the New York theatrical community. She said she welcomed the investigation and was supplying the attorney general with "hundreds of cases of documents."
Asked how she could deliver such large returns - 37 per cent on a three month investment and up to 450 per cent on a one-year investment - Holzer replied that it was possible "legally in certain foreign countries to make a lot of money. You can go to African now and make a lot of money on shipments."
Holzer, whose husband Peter is a shipping executive, said the profits were made not only on mark-ups on the items shipped but that it is possible to avoid demeurage "if you have enough influence." Demuerage is a charge assessed for detaining a ship in harbor beyond the free time stipulated for loading or unloading.
She denied any bribery of foreign officials was involved in her business deals. "I am not a person paid off," Holzer said.
She said most past investors had received back their initial investment along with a large return. She said she had paid out about $6 million on $2 million invested. She declined to pinpoint how much money was now supposedly impounded in Indonesia but promised that the complaining investors "will always get their money back because there is collateral."