A Silver Spring public relations man, who peddled a super get-rich scheme to build a $1 billion new town near Ocean City Md., was indicted on seven counts of fraud yesterday by a Montgomery County grand jury.
Paul A. Toneman was charged under a "false pretense" statute of "unlawfully and knowingly" obtaining a total of $65,000 from three doctors, a dentist and a retired businessman, to whom he had sold franchises to operate in the proposed new town, which he called "an Eastern Shore Columbia."
Toneman, the indictment alleged, defrauded Dr. John F. Philips, of Fairfax, Va., a dentist, out of $32,500; Frederick P. Babcock, a retired Silver Spring executive, out of $25,000; and Dr. Joseph T. Inglefield of Falls Church, Dr. Frank A. Camp, and Dr. Anthony Jean-Jacques of Columbia, out of $7,500 each, between April 27 and Sept. 15, 1976.
In a case first disclosed by The Washington Post on Nov. 18, Toneman sold to Philips and Babcock rights - which had been previously sold to at least one other investor - to operate a cable television operation, and to Philips and the three physicians rights to operate a hospital in the new town.
The five were the latest in a long line of doctors, lawyers, businessmen, architects, policemen and firemen lured into Toneman's grandiose scheme to build a new town, called Patone Village, during the last five years.
Many of those involved told The Post that some had dumped their savings into the project, others quit their jobs to go to work with Toneman, while others still worked months and even years on the project without ever being paid and one man lost his home and business.
Toneman's former associates claimed in interviews that he sold the "big idea," playing on the gullibility of others, and their desire to get in on "the idea of a lifetime."
Toneman billed his project as "the greatest development in housing since man left the cave." In addition to 60,000 homes, selling for as little as $31,500 each, the billion-dollar new town would feature the "world's largest shopping center," a plush yacht club, a model hospital called "the Inglefield Medical Center - named after one of the investing doctors - and a police force larger than that of Washington D.C.
Patone Village, advertised as "a revolution in living," would be financed by Arab oil money, Toneman claimed. It would be located near Ocean City in rural Worcester County because, Toneman said in one pamphlet. 'It's farsighted officials extended all possible help to deliver this exemplary housing within the reach of everyone."
But no Arab oil money, no land, no new town, or any involvement by local officials in Worcester County ever materialized.
Toneman himself had no recognizable assets or line of credit. According to former associates, he lived almost hand-to-mouth and dressed modestly. "He peddled the blue sky with a rope holding up his pants," said one self-described former friend.
A grey-haired man in his early 60s, Toneman worked out of his apartment in White Oak Towers, 11700 Columbia Pike, Silver Spring. He began contacting the potential investors last spring.
Camp, a chest surgeon, said in an interview that the new town was presented to him "as a sure thing . . . Initially I thought it (construction of the project) would start last summer" he added. "Then it kept being delayed one month, then another."
But most of the investors refused to be critical of Toneman and none appeared before the grand jury yesterday. The only testimony heard by the panel was from investigators in the major fraud division of the county state's attorney office.
"Personally, I hope it all turns out right for Mr. Toneman," said Babcock, who invested $25,000 in the project. "I don't think he's a scoundrel. I understand the project is about ready to get off the ground again."