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Retiree Pursues Businessman After Soured Real Estate Deal

September 01, 1985|JANE APPLEGATE | Times Staff Writer

Instead of enjoying his retirement days behind a golf club or fishing pole, James Harrison Smith, a dapper, retired Air Force lieutenant colonel, spends most of his time collecting information about a San Fernando Valley businessman named Donald Frederick Altenbernd.

Smith, 64, is not writing a biography.

He's trying to prove that Altenbernd is responsible for the $60,000 Smith lost in two limited real estate partnership investments six years ago. Smith, who lives in Alta Loma in San Bernardino County, says he hasn't seen his money or the deeds to the Humboldt County recreational land his partnership bought in 1979.

Dozens of Civil Lawsuits

Smith, who has filed a $1 million civil suit against Altenbernd, is not the only one pursuing the 59-year-old Northridge businessman. Altenbernd is named as defendant in dozens of civil lawsuits filed in Los Angeles and Orange County Superior Courts.

Public records show that he has failed to pay about a dozen court-ordered judgments against him.

The government has questioned his real estate transactions before. On Jan. 22, 1980, the state Department of Real Estate revoked Altenbernd's real estate broker's license. Earlier, a Superior Court judge issued a judgment in a civil case against Altenbernd and his D/A Development Co. Inc. for "obtaining secret profits, fraud and conspiracy to commit fraud" in connection with a real estate transaction.

Ten years earlier, Altenbernd's broker's license was suspended for 60 days by the state after clients filed complaints with state real estate officials.

Frequently Acts as Own Attorney

Former employees say Altenbernd's business dealings have angered dozens of people through the years. Still, those who know him describe Altenbernd as a handsome, charming and talented man who frequently acts as his own attorney.

In a 1979 biography contained in a real estate investment prospectus, Altenbernd described himself as "an independent developer of California, Arizona and Colorado properties." Today, Altenbernd says he serves as a consultant for Trans Gulf Inc., a Dallas-based oil company. No such company is listed in Dallas telephone directories, but it is a registered Texas corporation.

"I'm not liable for Smith's money," Altenbernd said in a recent interview. "I don't have his property."

Altenbernd said his deceased business partner, John S. Alexander, was responsible for Smith's money. Alexander was struck by a car and killed in December, 1979, shortly after he and Altenbernd collected $100,000 from Smith and four limited partners.

Unable to recover their money or deeds to their land in a place called Shelter Cove, Smith and his partners, including three Orange County couples, filed the $1 million lawsuit against Altenbernd in 1982. The suit is pending in Los Angeles Superior Court.

Altenbernd insists that he offered to turn over the disputed deeds to Smith's former attorney, Jette Anderson of Ontario.

However, Anderson said Altenbernd has never offered to turn over the Shelter Cove deeds or provide any information about the property.

After researching all Altenbernd's unresolved court cases and unpaid judgments, Anderson said she advised Smith that he might spend thousands of dollars in legal fees but probably would never see his money or land.

'I Have No Animosity'

Although he has been uncooperative with Smith, Altenbernd said he is now willing to help Smith in any way he can. "I have no animosity towards Smith," Altenbernd said. "I think he is a victim of bad advice and stupidity."

Bob Stephens, a former detective with the Newport Beach Police Department who recently returned to patrol duty, has been guiding Smith's efforts to untangle his ill-fated real estate investment. "Altenbernd is making a mockery of the legal system by hiding behind corporate veils," Stephens said, explaining that Altenbernd's business dealings were all handled through his several corporations.

For example, Altenbernd's I. R. Financial Corp. was co-general partner in Smith's real estate investments.

Stephens said he is frustrated because attorneys with Orange County's fraud unit rejected Smith's case, saying there were jurisdictional problems. Although Smith's money was collected in Newport Beach, it was allegedly diverted and spent in Los Angeles County and elsewhere. And, the untimely death of Alexander further clouded the liability in Smith's case, Stephens said.

"We took it as far as we could here," said Stephens, a stocky, blond man who has become close friends with Smith over the years they have worked together.

Sheriff's Investigation

Stephens recently arranged for Smith to meet with Los Angeles County sheriff's investigators, who agreed to listen to Smith's story and review his documents.

But Stephens and other fraud investigators say Smith's biggest problem is that overburdened local and state fraud units generally accept only the biggest, multimillion-dollar cases--not ones for $60,000.

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