The three owners of Treasure Island Foods Inc., who have accused each other of coupon redemption fraud, embezzlement and other crimes in the operation of the upscale grocery chain, are under investigation by a federal grand jury in Chicago, sources said Tuesday.
The three partners-Frank Kamberos, his brother Christ and William Allen-were informed in a letter sent last month by Assistant U.S. Atty. Robert Rivkin that a federal grand jury has been impaneled to investigate operations at the seven-store chain.
Specific aspects of the grand jury investigation remained unclear. But since January 1990, Allen and the two brothers have filed nearly a half dozen state and federal suits in which each side has accused the other of looting store coffers of millions of dollars since 1980 through several vividly spelled-out illegal schemes.
Rivkin declined to comment. Neither the Kamberos brothers nor their attorney, William Kunkle, could be reached for comment.
Allen, the voluble part-time impresario viewed as the marketing genius behind Treasure Island`s dramatic sales successes in the last 20 years, said he had not been contacted by federal agents.
”I can say flatly that I haven`t received any communications from the U.S. attorney`s office regarding any breaking of the law. If my partners have, I wish them the best of luck,” said Allen.
Jack Carriglio, one of several attorneys representing Allen in the feud that broke into the public domain in February 1990, also said he had not been contacted by authorities.
”We have received no inquiries from the federal government or any grand jury, and I don`t know the extent of any contact with the Kamberos brothers or their lawyers,” he said.
The origin of the fallout between the two sides remains murky. However, in February 1990, the Kamberos brothers filed a federal racketeering suit-and an amended suit-claiming that Allen and Thomas J. Piwko, a former Treasure Island auditor, stole millions after secretly gaining control of the corporation`s check-writing machinery.
The majority partners contended that Piwko used the stolen funds to enrich his personal life, while Allen used his share to underwrite the Gold Star Sardine Bar, a well-known cabaret that Allen owns on North Lake Shore Drive. The suit seeks millions in damages.
Allen replied with a counterclaim, asking a federal judge to dissolve the corporation because the brothers, over 11 years, regularly stole huge sums of money from store cash registers.
Allen claimed that the Kamberos brothers illegally pocketed $5.5 million by fradulently redeeming coupons they had clipped from daily newspapers.
The suit charged that the Kamberoses covertly sold the inventory of unprofitable stores that had been shuttered and double-billed Treasure Island through a food importing company in which they held a secret interest.
Allen charged that about $1 million in diverted funds was used by the brothers to pay private club fees, underwrite personal travel, renovate buildings and garages they owned and allow family members to grocery shop for free.
