(Here’s another page that is notes and not fully-formed. A book could definitely be written on Roethe. Maybe that book is the John Stone book, but I don’t think so.)
Leo W. Roethe was born in Fennimore on Oct. 27, 1914, to Edward and Bessie Roethe. He graduated from Union Free High School in Fennimore in June 1932 and the University of Wisconsin-Madison in 1937 with a Bachelor of Arts in journalism. He became editor of the Jefferson County Union in 1938.
In 1940, he was promoted to the advertising department of Hoard’s Dairyman Magazine, who also owned the newspaper.
In 1944, he headed the fund drive to build a new hospital for Fort Atkinson. He was on the board of directors for Fort Memorial Hospital for 25 years.
In 1946, he and Hugh Highsmith purchased the National Agricultural Supply Company (NASCO), a company serving vocational agriculture teachers with teaching aids. Highsmith sold his interest in NASCO to Leo in 1956. Leo took the company public in 1960. He served for 20 years as president before retiring. He was president of the Wisconsin Wildlife Federation for six years.
Leo was a charter member of Trinity Lutheran Church in Fort Atkinson. He was chairman of the fund drive to build the church in 1949. He served many years on the church council.
In 1969, he was selected outstanding conservationist in Wisconsin by the Shikar-Safari Club International. In 1973, he received the same honor from the Wisconsin Wildlife Federation.
Leo served as second district chairman of the Republican Party for Wisconsin from 1960 to 1964. In 1960, he was a Wisconsin delegate to the national Republican convention in Chicago.
Roethe was active in Boy Scouts and served for 25 years on the board of the Sinnisippi Council, formerly the Indian Trails Council, and was awarded the Silver Beaver award in 1961.
He served as president of the Fort Atkinson Rotary Club, the Chamber of Commerce, the American Cancer Society and the Fort Atkinson Conservation Club. Leo was a member of Billings Masonic Lodge 139 and the Madison Consistory and Zor Shrine.
In 1955, he formed Knob Hill Builders Co. and built many homes in Fort Atkinson, Cambridge, Janesville, Monroe and Lake Mills.
Roethe’s big game hunting expeditions started in 1959. Following the 1959 trip, Roethe became addicted to African safaris and from 1959 to 1973 was in Africa many times until he was badly wounded by a lion in 1973.
During the early 1950s, Roethe developed acres of tree farms in western Wisconsin. He also developed 40 acres behind his home in Fort with a man-made lake and 75,000 trees in 1949. During the years that he was president of the Fort Atkinson Wisconservation Club, he promoted the planting of thousands of trees in the Jefferson County area.
1971: Leo Jr died in a plane crash
May 1971: the SBA gave a loan to Roethe-connected company Professional Disposable Products. He owned 36% of the stock, though the majority owner was John P. Hobbins of Madison.
December 31, 1971: Roethe wrote to SBA director Richard Murray, a former NASCO vice president, seeking a loan for Metcalf Farms. In the letter, Roethe said he was looking to merge his company (Farm Corp of America) with the company owned by Richard A. Metcalf. They would focus on grain farming in Hawaii. The conversation continued for months, but no loan was made… mostly.
March 16, 1972: Roethe wrote to Assistant Secretary of Agriculture Richard Lyng, asking for faster action in a permit to use part of the Shoshone National Forest in Wyoming for a private ski resort run by his Big Mountain Country Inc. “We are afraid that if we wait another year and the elections are over that maybe the project might not look so rosy.” His request was denied. When pursuing this, he overstated the value of the Big Mountain stock.
July 31, 1972: Roethe and Earl Jordan became directors of Sorini Foods in Minnesota, which at the time had one restaurant run by Armand Sorini. In December, Roethe and Jordan sold the restaurant and on December 12 purchased Roethe’s World Wide Animal Kingdom museum of taxidermy under the Sorini umbrella for around $200,000. Six months later, they claimed its value at $320,000.
1973: mauled by a lion in Kenya. He claimed he was able to save his head by offering the lion his leg to bite.
January 1973: Roethe and John T. Stone formed Recreation International, a holding company to purchase farming and recreational operations from Hawaii to Kenya. The business was registered in Minnesota but headquartered in Madison. They soon took out loans of $7 million. Stone was an officer of Janeff Credit Corp in Madison, a consumer finance company, and had been since 1962. Early investors also included plastic surgeon John Hamacher and Madsion bar owner Edward Vanderwall.
Janeff sold some of its loan accounts to Algoma Bank, and more loans were taken out through Milwaukee’s James Rosenheimer, owner of the State Bank of Fredonia and the Bank of Jackson in Washington County. Rosenheimer had been the one to introduce Roethe and Stone. The Roethe/Stone group bought up ranches, ski resorts and more at Steamboat Springs, Colorado, large land holdings for tree farms, and a company that sponsored snowmobile races. They also bought up businesses owned by Roethe that had fallen into debt: Amasa Lumber in Michigan, African Ponderosa (a hunting lodge in Kenya), a Honduran timber plantation, Metcalf Farms and more. Metcalf, for example, had a $1.1 million unpaid mortgage.
The web of businesses and money is very complicated, but in simplest terms it appears the businessmen took bad businesses and put them under good businesses, then used the good businesses to get loans to finance the failing ones. In the process, loans were taken from one bank to pay off another, only making the problem worse.
May 1973: Murray and the SBA authorized a $350,000 loan for Metcalf Ag, a sister company to Metcalf Farms.
1973: In a Hail Mary to save the failing businesses, Roethe and NASCO employee Arthur W. Nesbitt (later company president) traveled to the Teamsters Central States Pension office in Chicago. Roethe was introduced to the Teamsters by attorney Joseph Balistrieri. Roethe received a $50,000 loan from the First Bank of Grantsburg and reported that the loan was to pay Balistrieri for his services.
June 26, 1973: Sorini Foods changes its name to Recreation International, despite documents showing the Recreation name was already being used by Roethe prior to this. The June 26 reorganization listed the following directors: Walter F. O’Connor, William H. Topp, William Brockner, Arthur N. Anders, L. Dickson Griffith, Robert M. Horne, Dr. John E. Hamacher, Dr. William Luetke, John Stone, Anthony Danna, Leo Roethe, ?? Quello, Earl Jordan, astronaut Jim Lovell and George E. Weast.
July 1973, loan money (not Teamsters) was obtained by John Stone and Walter O’Connor. Employee James Wichman overheard the conversation the day the money came in, and Stone was celebrating that he figured out a way to secure loans without having assets to back it up.
July 1973: Astronaut Jim Lovell was named vice president in charge of Recreation International’s Southwest division in Houston. Lovell later said, “That’s artistic license. There wasn’t any division at all that I know of.”
October 16, 1973: O’Connor resigned as president and sold his controlling stock in Algoma Bank.
January 1974: Roethe was again at the Teamsters pension fund office, this time with Richard Murray, former SBA director and president of the Bank of Fort Atkinson.
September 16, 1974: The Minnesota State Securities Commission suspended the registration of Recreation International, which was registered in Minnesota by Wisconsin businessmen Leo Roethe and John Stone. Bankers had filed more than 40 lawsuits against the businesses owned by Recreation.
September 21, 1974: Roethe left for Europe and was not back until October 20.
October 14, 1974: The Algoma State Bank sued Roethe in Dane County, seeking $1.9 million. The bank said Roethe had “guaranteed” repayment of this amount after loans were given to defunct businesses associated with Roethe. On October 20, through attorney Donald Smith, Roethe filed a reply denying all allegations. Judge William Sachjten set a date of November 1 for a hearing to decide if he would grant summary judgment. Smith was able to get at least one delay until late November because Roethe was in Europe.
December 24, 1974: The Small Business Administration (SBA) accused two loan officers in its Madison office of incompetence. They alleged that Donald Eck and Maxwell Freeman, under the leadership of Richard Murray, had made 46 improper loans. One was a $380,000 loan to Jonathan Pellegrin, a friend of Murray. Loans also went to Murray’s brother-in-law. A $315,000 loan was given to Richard Metcalf of Metcalf Ag, a business associated with Leo Roethe. Murray had also worked for Roethe before joining the SBA. The FBI said they would investigate the loans.
February 19, 1975: State agent Gary Hamblin made routine checks of taverns and residences related to Milwaukee hoodlums and saw nothing unusual. His report lists the usual targets, along with James Rosenheimer.
February 24ish, 1975: Algoma State Bank sued to get Janeff Credit Corp’ assets frozen and put in receivership. The bank claimed Janeff owed them $1.9 million and was affiliated with Leo Roethe.
Late February, early March 1975: John Stone pleaded no contest to 11 charges of state banking and securities laws.
March 3, 1975: Roethe met with his creditors and told them, “I’m trying to say to you fellows in a very nice way, that if you play ball with me, I will play ball with you. But if you push me into bankruptcy, I will leave all the money over in Europe. I will probably become a citizen of Liechtenstein and you guys will all sit.” Roethe later said these comments were “kind of a joke.” He told the creditors he had set up a company in Liechtenstein, the Peoples Economic Redevelopment Company, to negotiate $2-to-6 billion in loans between an Arab oil producer and the Mexican government, and if he was given “two weeks” his commission ($3.5 million) would pay his debts. He also said a London bank was handling the transaction, but declined to name the bank. He said he told of how to make these connections by a “Count Ranchella” who handled big investments in Europe, including for the Vatican. At some point, Ranchella was pushed out because Mexico didn’t like him, and a German banker named Dan Daniels stepped in. The Arabs were interested, allegedly, because their religion did not allow them to earn interest on money, so they had to invest it and if interest was gained on those investments by non-Arabs, no problem.
March 8, 1975, the Milwaukee Journal did a phone interview with Roethe while he was in Geneva, Switzerland. Talking about his proposed loan from Arab countries to Mexico, he said, “Mexico is going to become the leading country of North America when this is finished… This deal is the biggest financial deal ever done anywhere in the world. It’s possibly a much more ticklish international situation than even what Kissinger’s doing over in the Arab countries right now. I have an appointment with the top officials of the trustee banks in London this week. I’m hopeful that we’re going to be able to finish by the middle of this week.”
The Journal contacted the press secretary to Mexican President Luis Echeverria and were told, “I flatly deny that we are doing such a thing. I am now authorized to tell you that there is no truth in this.” The Journal called Roethe back and he said, “The Mexican government will never stand still for you publishing any rumors. I think it would be unhealthy for you to do so. I’m not threatening you, not myself. But I do know what the Mexican government does to people they don’t like.”
March 9, 1975: Roethe resigned as a director and officer of NASCO, though said he would stay a consultant for special projects.
April 30, 1975: By order of a judge, World Wide Animal Kingdom in Wisconsin Dells was padlocked and its trophies (taxidermy) were seized to be auctioned off to repay debts to Algoma State Bank.
May 5, 1975: State agent Neeb received a call from John Stone about James Rosenheimer. It was said that Rosenheimer had an associate named “Jeep,” real name JW, who operated a salvage yard. Rosenheimer was somehow connected to Leo Roethe, and when Roethe paid Balistrieri $50,000, Rosenheimer added more money into that payment. The link between Roethe, Rosenheimer and Balistrieri was believed to be Henry Nechy.
May 6, 1975: Leo W. Roethe testified that contrary to rumors, he had not paid $50,000 to influence the Teamsters into giving him a $10 million loan in 1973. Other sources had suggested Roethe withdrew $50,000 from the Bank of Fort Atkinson and paid it to Joseph Balistrieri to influence the Teamsters. Roethe further said the only attorney who represented him with the Teamsters was James Vance of Fort Atkinson, who was also affiliated with the bank. The newspaper noted this would suggest Vance represented two sides of a deal, which would be unlikely. Sources had suggested banker James Rosenheimer of Shorewood helped arrange the loan by talking with Frank Balistrieri, but Roethe denied this, too. Roethe was under investigation for his part in a Madison business – Recreation International Inc – that had borrowed $5 million from several banks and failed to pay it back.
May 28, 1975: Roethe listed his creditors for the bankruptcy court. He said he was $4.47 million in debt, including $2 million to the Algoma Bank. Another $1 million was owed to the Philadelphia National Bank. A variety of other debts included credit cards and large hotel bills.
May 30, 1975: The Algoma Bank had its charter revoked by the state. The FDIC was appointed receiver. This was the first bank failure in Wisconsin since 1947. (Assets were sold to a newly-created First State Bank of Algoma.)
Joseph Balistrieri testified at a John Doe hearing on August 13, 1975, concerning Leo W. Roethe’s attempts to secure a Teamsters loan for Recreation International. He was represented by attorney Nicholas Catania, while the state had Peter Peshek and Frederick Erhardt. Agent Alfred Suhr was also there. Catania expressed the opinion that the subpoena bringing Balistrieri there was not valid because it was served in Milwaukee County rather than Dane but did not want to file a formal objection as his client agreed to appear voluntarily. Balistrieri told the court, “I rendered services to Mr. Roethe in my professional capacity, and I have a legitimate belief that those services were as a lawyer and as an attorney.” When asked if he was paid a retainer, he said he could not answer because it violated attorney-client privilege. The judge said it did not, and Balistrieri then said, “In that case, I was paid no retainer fee by Mr. Roethe. I was retained either in late 1972 or early 1973 by him. I believe my services to him have been terminated; however, I cannot recall the specific date. I do recall that I had conversations in 1973 with Roethe regarding my professional services.” Balistrieri said he would testify if Roethe agreed to waive his privilege. The court asked him to prove any retainer and return at 1:30pm on August 27. This testimony was later called into question: Balistrieri claimed to be Roethe’s attorney to avoid testifying, but Roethe said at no point was Balistrieri ever his attorney but had in fact been representing the Teamsters in their discussions. “I never paid him anything, and I never hired him,” said Roethe. Frank Balistrieri was to be the next witness, with both his sons acting as attorney, but the court ordered him to return August 27 – the questions for Frank depended on the answers of Joseph.
August 14, 1975: Roethe was declared bankrupt, with debts of $7 million. He filed his “asset list” by the beginning of September, and it was scrutinized by the press. They pointed out that it did not include several of his stock holdings, and many of the stocks he did list were valued less than they were when he made a financial disclosure in 1973. Also absent was his extensive stamp collection, used as collateral in a January 1974 loan to trucking company owner Arthur Anders of Pennsylvania.
October 3, 1975: Although Roethe objected, bankruptcy judge Leonard Bessman authorized trustee David Walsh to inventory the contents of Roethe’s Fort Atkinson home. Roethe was believed to have taxidermy and valuable paintings. Roethe said he was still trying to find other ways of paying his debt and would be meeting people in New York soon who could help.
October 8, 1975: Frank Balistrieri was granted immunity to testify about Roethe at a John Doe hearing. At first those doing the questioning wanted only limited immunity, but the judge agreed with Joseph Balistrieri that immunity should not be “piecemeal.” Frank testified for approximately 30 minutes. Joe also testified the same day.
October 21, 1975: Leo Roethe testified at a bankruptcy hearing that he gave Joseph Balistrieri a $50,000 cashiers check drawn on the First Bank of Grantsburg as payment for connecting Roethe with the Teamsters pension fund. Balistrieri never cashed the check, however, as the Teamster loan never materialized. He said the Teamsters money would have been used to buy 800,000 shares of stock in Nasco International, a company he formerly owned. Attorney David Walsh, who was questioning Roethe, was very thorough and tried to ascertain where Roethe disposed of his valuable gun and taxidermy collections.
December 19, 1975: Roethe testified in bankruptcy court that he was the victim of a “rigged” deal. He had given John Stone power of attorney and expected him to transfer $350,000 in stock to the Algoma Bank as loan collateral, but Stone had transferred the full $2 million. When debts came due, he had no money. Roethe said he had also been negotiating a $2 billion loan for the Mexican government from an Arab oil producer and his commission would have been enough to pay off the debt, but the deal fell through. The Mexican government denied this ever happened. He said another billion-dollar loan involving another foreign country (not named) also fell through. Roethe said the deals fell through in part because the Mexican government did not like the Milwaukee Journal asking questions.
January 7, 1976: Roethe testified at the John Doe probe in Madison investigating Recreation International. The probe had now reached its 12th month.
Also January 7, 1976: The FDIC sued three people connected to Roethe involved in the downfall of the Algoma Bank. They asked for $20,000 from Robert Rauterberg, a former officer at Milwaukee’s Marine National Exchange Bank. They also sought $77,500 from Watertown businessmen Erich Zellmer and William Pankow.
February 25, 1976: Attorney Donald Smith said he was considering withdrawing from Roethe’s bankruptcy case. He was owed more than $50,000 and had not been paid yet.
April 12, 1976: When speaking with the FBI, Roethe falsely told them the US Forest Service had given him the authority to develop a recreation area in the Shoshone National Forest.
Mid-July 1976, John Stone’s book hit the market while he was in Sandstone prison. It was a 372-page memoir called, “Going for Broke, How I Built an Empire from Scratch and Lost $20 Million.” Reviews said it was “sad” and “irritating.”
October 8, 1976: The FDIC offered to drop its $2.2 million case against Roethe and settle for $50,000. (The article is very short and this makes no sense to me, so maybe I’m misunderstanding.)
October 10, 1976: 200 people bid on 100 animal trophies formerly belonging to Roethe. A polar bear, two zebras, lion, kangaroo, Indian sloth bear, cheetahs, a giraffe, some sheep, a gnu, many others. Over $40,000 was raised, including $2,900 from a moose and $2,500 for a Bengal tiger. “I’ve seen more than I ever want to of them,” said attorney James Cole, who was handling the sale for FDIC. “One of the guys calls them a whole house full of stiffs.”
November 2, 1976: Roethe was ordered to pay $28,516 in back taxes plus interest for unpaid taxes in 1970 and 1971.
January 28, 1977: Roethe pleaded no contest to six counts of filing false statements to get $1.6 million in loans. He told Judge Myron Gordon he had done nothing “morally wrong” but was pleading this way because the prosecution agreed to throw out six more counts if he did. Gordon said based on the documents filed, there was “strong evidence” of guilt and he set sentencing for April 4 – the maximum possible sentence was 13 years in prison and a $30,000 fine. A 40-page document filed by the prosecution showed Roethe routinely overvalued companies and made other false statements. He had, for example, told a bank he had sold timber land (owned by his business, Agricola Itzapan) to the son of the president of Honduras with a financial guarantee from the Honduran president. This could not be verified and Honduras denied it. He also claimed that various land he owned would increase in value because Curt Strand, president of Hilton Hotels, promised to built hotels there – a claim that never materialized.
November 3, 1977: Roethe’s Ponderosa Farms in Jefferson, Wisconsin (a subsidiary of Metcalf Farms) were sold at a foreclosure sale $672,500. The 985 acres went to K-T Farms of Lake Geneva.
Leo W. Roethe died Sept. 25, 2008, at age 93.