Interview of Arthur B. Derham re Superior Training Services

FD-302 (REV. 3-10-82)

---

1

FEDERAL BUREAU OF INVESTIGATION

Date of transcription 09/26/89

---

ARTHUR B. DERHAM, 6250 East Foothill, Apache Junction, Arizona, telephone number (602) 982-0227, was interviewed at the Mesa Resident Agency. After being advised of the identity of the interviewing Agent and the purpose of the interview DERHAM provided the following information:

DERHAM advised that he was initially hired as a mechanic at $10.00 an hour for SUPERIOR TRAINING SERVICES (STS), Heavy Duty Equipment Shop, Heavy Duty Equipment Site, located at 6250 East Foothill, Apache Junction, Arizona. During the hiring process he was lead to believe that he would only be a mechanic until such time that he could assume the responsibilities of managing the Heavy Duty Equipment Shop. DERHAM stated that things turned out exactly as he was lead to believe during this hiring process. He stated that he was fired by STS in September, 1987, by one [REDACTED] for no apparent reason. DERHAM further advised that while employed by STS, he reported to one [REDACTED] DERHAM added that this [REDACTED]

---

DERHAM stated that as manager of the Heavy Duty Equipment Shop, he was responsible for insuring that the heavy duty equipment utilized in training students was maintained at a level capable of handling an excess of 100 students per month. DERHAM advised that the equipment which had to be maintained was not capable of training this many students within one month because it was very dilapidated and out of date. In many instances, the equipment would break down during the one month's training of students, and these student would be required to double up on the equipment which was currently working. DERHAM further stated that this type of situation was the common place rather than the exception due to the excessive wear and tear on the limited amount of equipment maintained at his site. Additionally, DERHAM stated that in many instances he was forced to handle up to as many as 300 students in a single month with the same worn out equipment. These overloaded classes led to students not receiving adequate training to even comprehend how the machinery actually operated.

DERHAM advised that student would generally arrive for a one month stay at his site in order to learn how to operate

---

Investigation on 09/14/89 at Mesa, Arizona File # PX 213A-31 213A-IP-28 - 96/ by SA [REDACTED] Date dictated 09/18/89

This document contains neither recommendations nor conclusions of the FBI. It is the property of the FBI and is loaned to your agency; it and its contents are not to be distributed outside your agency.

---

DB Cooper-33560

---

b6 b7C

FD-302a (Rev. 11-15-83)

213A-IP-28 PX 213A-31

Continuation of FD-302 of ARTHUR B. DERHAM ,On 09/14/89 ,Page 2

---

heavy duty equipment. This training on heavy duty equipment encompassed a four week program in which student would spend one week on a specific type of heavy duty equipment. They would begin the week by spending one day in the classroom and the remaining portion of the week with hands on the equipment. Thus, upon completion of the four week course, each student will have performed one week on one of four pieces of heavy duty equipment. This could be anything from a bulldozer to a grader. DERHAM advised that with this training regimen, students would never receive more than a total of eight hours per piece of equipment. He felt that this much training did not even qualify the student to be hired by any of the local heavy duty equipment operators within the Phoenix Metropolitan area.

---

DERHAM advised that student would generally receive a check for living expense costs for the first two weeks of their stay at the school. Subsequent to this, students would receive an additional check from STS for their living expenses during the next two weeks of their stay. DERHAM stated that once students received the second check, STS did not care whether the students departed the school or decided to stay and finish out their course of study while in the Phoenix area. He felt that once the second check was forwarded to the student, STS basically washed their hands of all responsibilities towards the students.

---

DERHAM advised that he and his staff were told that they were not to fraternize with the student attending the school at any time during their stay. Additionally, they were told that they were not even to speak to the student unless it was strictly course related. He found this to be quite embarrassing on numerous occasions, due to the many questions generated by the students attending the course. Even though DERHAM was not allowed to converse with the students openly, he was able to get the feeling from most of the student that they believed they would be gainfully employed upon completion of this course, at a wage of approximately $18.00 to $20.00 per hour, and they would have no difficulty in finding employment once they had completed the course. He did not know where the students had acquired this type of opinion, but he was sure that it was not acquired within the heavy duty equipment site here in Apache Junction. In DERHAM's opinion, most of the students that attended this course would not even be qualified to get any type of a job within the heavy duty equipment area upon completion of this course due to the very limited number of hours available to each student upon the machinery.

---

DB Cooper-33561

FD-302a (Rev. 11-15-83)

213A-IP-28 PX 213A-31

Continuation of FD-302 of ARTHUR B. DERHAM ,On 09/14/89 ,Page 3

---

DERHAM also advised that on occasion there would be Spanish speaking students in attendance at the course that could not truly receive adequate training due to the language difficulties caused by their unfamiliarity of the English language. DERHAM felt that this was odd, but did not question their attendance at this school, because he felt that they were trying to learn a skill.

DERHAM advised that examinations were given on a regular basis by the instructors of the heavy duty equipment, however, he did not feel that most of the students received enough training to pass any examination given without help from the instructors. DERHAM felt that approximately five out of 100 students would be capable of every learning how to operate the equipment. He truly questioned the recruitment policies of the individuals in Indianapolis, because of the numerous unqualified individuals that he encountered at his heavy duty equipment site shop. He felt that the recruiters must not have any type of knowledge regarding the operators of heavy duty equipment if these were the individuals that were being sent to learn in just a four week period.

DERHAM had no knowledge regarding the financing or enrollment policies of STS, however, he did get a feel from the students that they did not believe that they would have to repay any of the loans granted in order to gain enrollment into this school.

DERHAM advised that he really had no knowledge regarding STS property that was allegedly sold out of the back door of STS wherein cash generated with kicked back to STS employees, nor was DERHAM able to furnish any additional information regarding twelve current/former employees who were victims of a STS Employee Stock Option Plan (ESOP) fraud committed by STS. He advised that he is currently involved in civil litigation in order to regain funds which he had invested in the Stock Option Plan, but can not currently provide information regarding the other twelve due to the fact that most have moved out of the area.

---

DERHAM provided the names of one [redacted] [redacted] as a person whom may be able to provide additional information regarding STS activities. [redacted] currently resides at [redacted] Mesa, Arizona. Additionally, one [redacted] [redacted] as another individual who may be contacted and provide information regarding STS activities.

---

DB Cooper-33562

FD-302a (Rev. 11-15-83)

213A-IP-28 PX 213A-31

Continuation of FD-302 of ARTHUR B. DERHAM ,On 09/14/89 ,Page 4

---

DERHAM is described as follows:

Sex Male Race White Height 5'8" Weight 160 pounds Date of birth February 7, 1933 Social Security Account Number 327-26-6181 Hair Brown Eyes Blue

---

DB Cooper-33563