Masterful crime plan uncovered
Turning loot into guns laid on suspects in actress' disappearance
San Francisco Examiner - Jan. 23, 1981, p. A4


    The Nov. 9, 1980 disappearance of Valerie McDonald, a striking young artist and aspiring actress, prompted an investigation that has involved police, private investigators and government agents in two countries.
    As they searched for McDonald, the investigators found their attention drawn to the group of ex-convicts who managed the North Beach hotel where she lived.
    This article is one of a series The Examiner will present as the story develops.

By Larry Maatz

    Police have uncovered evidence of what they believe was a scheme by three ex-convicts to stage lucrative robberies, use the loot to purchase automatic weapons and ship them to Latin America, then trade the guns for cocaine to be smuggled back to this country.
    They also have evidence that these men had obtained such sensitive information about the transport of money by banks and other institutions that their robberies could have netted them millions of dollars.
    Law enforcement sources attribute the scheme to ex-convicts John Abbott, Phillip Thompson and Michael Hennessey, managers of the Tower Apartments in San Francisco, where aspiring actress Valerie McDonald disappeared.
    These alumni of the California prison system had, according to Department of Corrections sources, secured the cooperation of a prison guard who met Thompson while he was in prison.
    The guard, sources say, had already begun the paperwork for obtaining a federal license to deal in automatic weapons. And he had, according to federal law enforcement sources, been regularly at both the Tower Apartments here and at a Kensington home used by the ex-convicts.
    The gun carried by Abbott and used by Hennessey in a November shootout with officers of the Royal Canadian Mounted Police was traced to this guard. Hennessey was killed, a Mountie was wounded and Abbott was arrested in a shootout in Trail, British Columbia, near the small community of Rossland, where the two had rented a luxury apartment.
    One federal lawman involved in the investigation said he believes the guard's intended role was to convert the cash gained in the robberies into automatic weapons.
    "It works like this," he said. "You convert $100,000 here into automatic weapons. Those same weapons are worth $100,000 in South America, so you swap them there for cocaine. You've multiplied your buying power by 10 just by converting the cash into guns.
    "And after that? After that, you just have a routine drug transaction."
    At least one weapons transaction had been discussed in detail by the principals law enforcement officials have been informed. A $200,000 cache of M-16 automatic rifles, leftovers from the Vietnam war and currently in storage in Hong Kong, was to be obtained and shipped to South America.
    The guard's role in the intended Hong Kong transaction is unclear, as no license would be needed for foreign weapons deals, so long as the weapons were never physically brought into the United States.
    The guard has been questioned by authorities, but is facing no criminal charge.
    Indications of a sophisticated robbery scheme were uncovered in sketches, timetables and other notes found in the effects of the three men after the arrest of Abbott and death of Hennessey in Canada, and the arrest of Thompson in San Francisco.
    Police were particularly impressed with their research into the shipment of money by Hibernia Bank. Had the men staged a robbery at one point in the trail they had plotted, they said, the trio would have had access to anywhere from $3 million to $6 million.
    "Their preparation was extraordinarily detailed," said a source close to the investigation. "In the case of Hibernia, they knew the exact routes taken by their trucks when they made their Friday collections from the branch offices."
    Law enforcement and banking officials are troubled by the detailed nature of the information on the bank's money movements. "Some of the information found in those notes is known to only four or five persons within the bank," says one law enforcement source.
    Whatever plans these men may have had began to fall apart in mid-November.
    On Nov. 16, 1980, Highway Patrol officer Dallas Brake made a routine stop on a speeding van on Highway 101 near San Jose. The driver identified himself as John Gordon Abbott, 26, then leapt a chain link fence and escaped when the CHP officer determined that the van had been stolen.
    In the van were found documents traced to an October 21 robbery in Berkeley, as well as other papers linking the van to a home in Kensington, later determined to have been frequented by both Abbott and Thompson.
    Abbott, law enforcement sources theorize, then began his flight to Canada. A felon, Abbott was on work furlough from State Prison when he was stopped. A link to the stolen van would have automatically returned him to prison.
    His flight ended in the parking lot of a transmission repair shop in Trail on Nov. 26 with his arrest and Hennessey's death.
    Thompson, the object of increasing police interest because of the disappearance of McDonald, was arrested in San Francisco last week in a warehouse containing stolen property. He is free on bail after being arraigned in San Francisco Municipal Court on several charges last Monday.
    Thompson and his attorney, chief assistant public defender Peter Keane, appeared in court today to have a date set for a preliminary hearing. This, however, was postponed after Keane filed a motion asking the removal of the district attorney and substituting the state attorney general as prosecutor.