Conduct Unbecoming

Bill Beachum, war hero and Disabled American Veterans honcho, had an out-of-control dream that may soon land him in jail. Question is, was he the only old soldier on a mission of greed?

By October of the following year, he was in jail. Police seized boxes of records. Check registers with double entries -- one set for public consumption, the other tracking the checks' real purposes. Computers from both home and office.

And his pretty green BMW.

David Hollenbach
David Hollenbach

Lemmons closed its doors in December 1999.

The pricey renovation wasn't even complete; employees had to patch the walls up, and there was a strip of silver duct tape in place of a threshold.

Then Bay and the other trustees found out they couldn't sell the place -- they didn't own it. Beachum had created a separate corporation, "DAV Chapter One Hall," and even though the regular chapter had made the down payment, he'd put the title in the Hall corporation's name.

Kessler discovered the second corporation by accident, during a database search, and notified the national organization.

But nobody notified the trustees or Pete Gullborg, the attorney for the local chapter.

"When I discovered that national had known and not told me, that was one of the singularly most exasperating moments," Gullborg says.

In time, the attorney did learn that the Hall corporation held title to Lemmons, but not before he started handling the sale of the restaurant. By then, several lawsuits had been filed, including two by fired restaurant chef David Lotz and architect Andrew Raimist. Had Gullborg known these actions were aimed at the now-dissolved Hall corporation, he could have simply filed a motion to dismiss.

But by the time he made his discovery, it was too late to counter the lawsuits without delaying the sale of the restaurant. So the chapter paid $50,000 to settle with Lotz and Raimist, using proceeds from the sale of Lemmons.

"We could have fought them," says Gullborg, "but it would have taken months, and our only potential buyer had given us a sell-by-this-date ultimatum. Besides, if another week had passed, there probably would have been another new lien."

The Hall corporation hit the news with Beachum's arrest in October 2001. Reporters called it a "shadow corporation." The sinister tone puzzled chapter members; back in 1998, their bylaws had been amended to establish three corporations: one for the chapter, one for the thrift stores and one, "Disabled American Veterans Chapter #1 Hall," for the restaurant. National gave Bay the impression of surprise when the Hall corporation surfaced, but the national judge advocate had signed off on the amendment the year before.

Nobody had asked to see the incorporation papers, though.

Beachum had played this like a lone hard-drinking cowboy. He was obsessed by his fantasy of a clubhouse for his men, and although he talked incessantly about his dream, he was never made accountable for its costs.

By the time he left, outsiders had a hard time even fathoming what he'd done, let alone why.

Bay squinted tired eyes at the registration his friend had filed with the Missouri secretary of state back in October 1997, scrawled in thick marker and listing only himself as registered agent -- no DAV attorney, no other officers. In the section stating the corporate mission, he'd written, "any legal purpose."

In 1998, Beachum stopped filing his annual financial reports.

But no one noticed until it was too late.

As the chapter's chief finance officer, Beachum wasn't used to much scrutiny. DAV's local accountants took what was given them. Kessler's forensic CPA, Charles J. Shields III, analyzed past audits and wrote:

"Certain workpapers are either missing or were never prepared, and ... even the workpapers that we inspected are not only illegible but don't sufficiently document the audit work that should have been performed."

By that point, Bay didn't even care. He wanted to close Lemmons and forget it ever happened.

But the investigator kept going.

Soon Bay was told that $12 million had run through the DAV bank account in six months of 1999, with no records available to explain the sudden swelling of both deposits and withdrawals. The June 1999 statement from Bank of America showed 21 "transfer from investment" deposits, averaging about $100,000 apiece. The total deposited that month -- and promptly withdrawn -- exceeded $2.2 million.

"Transfer from investment?" Bay reread aloud. "We have no investments."

Another day, a call came in about a water bill for a piece of property allegedly owned by the DAV. When an employee told Don King, who by then was investigating for the Missouri attorney general, she says he sighed heavily and murmured something about another piece of property they'd have to investigate.

The investigation went deep and stayed secret, but at the surface, loose talk and unproven rumors clung like chicken grease. A brothel upstairs at Lemmons. People snorting cocaine in the DAV parking lot. Real-estate deals swung all over the country. Everybody making money off everybody.

Sickened by possibilities that grew wilder by the day, Bay drove home and spent time with his Gelbviehs, soothed by the calm brown eyes that asked for no more than they needed.

When he came back to St. Louis, he saw panic in the patrician features of Ken Kooyman, the New Englander assigned by national to take over the thrift stores. Bay said Kooyman told him he was being followed by a guy with a skinny face and a gray beard, wearing sunglasses and a ball cap, driving a hunter-green Lexus with 795 written in the back window as a license plate. Someone was calling his home, too, urging him to back off. And his tires had been slashed.

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