The Family Jewels

In life, Paul Kalmanovitz controlled every business decision related to his $500million brewery/real estate dynasty.He even made detailed plans forthe governance of his estateafter he died. So why is the Kalmanovitz fortune the center of two vituperative

Growing emotional, Alma recalled how Leon was forced into the Jewish ghetto after the Nazi invasion. Being of German descent, Alma and her sons, Karol and Pawel, were spared. But they would ride the streetcar past the ghetto twice a week and see Leon, standing on the edge of the encampment. One day, she said, he was not there. After the war, she learned he had died in Auschwitz.

In 1946, Alma said, Mr. Paul flew to Poland and accompanied her, Pawel, and Karol to the cemetery in Lodz, where they dug up the treasure. There, they struck an agreement: Fearing the Communists as much as they had the Nazis, the Kalmanovitz family would allow Mr. Paul to keep the jewels and redistribute them back to the relatives in Poland once it was safe to do so.

"I had the presence of mind to bring a cover, a suitcase, and we put the box in the suitcase," she said. "A lot of people were in the cemetery, and we were afraid of the Communist police. We were lucky that we got out of the cemetery."

Afterward, she said, the two boys took turns carrying the load to a horse-drawn taxi and then to Mr. Paul's hotel room.

"I was overjoyed," she said of Mr. Paul's successful trip back to the U.S. with the jewels. "I would never have gotten anything out of this in a Communist country." She never got anything out of it anyway, she and the other relatives say.

The trustees and their attorneys dismiss the story of the family jewels as pure hogwash. Racing down a courthouse hallway on his way to conduct direct examination of a witness, Michael Schwarz, an attorney for the trustees, gives a frank assessment of the plaintiffs' case: "It's utter bullshit."

California Deputy Attorney General Yeoryios Apallas, who joined the defense to protect the proceeds of the Kalmanovitz charitable trust, employed more florid tones to dismiss the claim filed by the Kalmanovitz relatives.

"The story of the buried treasure ... belongs more in an adventure book than in a courtroom," Apallas wrote in his opening brief to Judge Dufficy. "To accept any of the plaintiffs' elaborate, self-serving, and totally undocumented story requires the trier of fact to suspend disbelief, enter a world which only Indiana Jones calls home, and join him in search of the Kalmanovitz buried treasure."

Indeed, there are many holes in the plaintiffs' case. First off, insurance companies did not insure loose jewelry back in the 1940s. In fact, they are wary of doing it today. According to Robert L. Wilkinson, an insurance expert called to the stand by the defense, even if a company would have been bold enough to insure the treasure it would have insisted that the jewels be kept in a safe-deposit box in a bank.

Also, the defense sent Norman Naimark, the chair of the history department at Stanford, to Poland to conduct historical research, and he testified that he could find no references in any of the social registers or other historical documents to confirm that the Kalmanovitz family was wealthy enough to amass a million dollars in wealth, which in 1939 would have equaled one-thirtieth of all the gold in Poland.

But most damning is the fact that the plaintiffs can produce no objective documentary evidence that the jewels ever existed, that Paul and Lydia Kalmanovitz ever acknowledged receiving the jewels, or that there was any insurance payment.

Plaintiffs allege that Lydia wrote a letter to Alma in 1987 in which she promised to include a cash bequest in her will to cover the jewels. But, they are quick to add, Alma destroyed the letter.

The defense scoffs at the missing letter, asking why Alma saved all the scores of other letters Lydia Kalmanovitz sent her and destroyed this one.

Stanley Kalmanovitz doesn't think it's funny. "Have you ever lived under communism?" he asks me when I inquire about the letter. "Do you know what it's like to hide everything that is of value to you that the government could take?"

Countering the defense charge that the 1987 letter is a fiction, the plaintiffs produced a surprise witness, Lena Kowalik, a former cook at the Kalmanovitz household who said Lydia told her about the jewels. Kowalik, who quit her job and was denied when she asked for it back, is lying, according to defense lawyers.

To support the claim that there was an insurance payment after the 1948 robbery, Karl Kalmanovitz took the stand and said, simply, that Mr. Paul told him so when he visited his uncle in 1958.

"It's almost too cute how they always produce some convenient fiction whenever there is a hole in their story to fill," Schwarz says in a phone interview.

For weeks, Sharon Hegseth, Stanley Kalmanovitz's daughter, told me the story of the Waco-style raid on her house by process servers with a subpoena from the California Attorney General's Office. Each telling grew more dramatic. Men with bullhorns yelling, "Come out and no one will get hurt." Men crawling over her roof, banging on her windows and walls, blocking her driveway with their cars.

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