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Developer Sirotin, Wife Charged With Theft

August 03, 1986|MARK ARAX | Times Staff Writer

Former Pasadena developer Stanley Sirotin and his wife have been charged with five counts of grand theft for allegedly embezzling $3.7 million from 34 investors through an intricate scheme that employed European bank accounts, offshore corporations and an embellished past that helped to lure victims.

Deputy Dist. Atty. Timothy Browne, who filed the charges Wednesday, said that his office will initiate extradition proceedings to bring Sirotin, 62, and his wife, Alice Beryl, back from England, where they have resided on a country estate since April, 1984.

In their wake, the Sirotins left one retail project that was bankrupt, two others that were in financial trouble and dozens of investors who had gone to court charging that the developer had defrauded them out of millions of dollars.

Browne cautioned that it could take years before the Sirotins might be brought back for trial because they could appeal extradition through Britain's House of Lords. If found guilty, Sirotin could be sentenced to nine years in prison while his wife faces a maximum term of seven years and eight months.

Sirotin has an unlisted telephone number in England and could not be reached for comment.

Two-Year Investigation

The charges against Sirotin, once one of the city's premier developers, and his wife resulted from a two-year joint investigation by the state Department of Corporations and the major fraud division of the Los Angeles County district attorney's office.

Browne said in an interview that the investigation is continuing and may yield additional charges against the couple.

"Because of the extremely convoluted business transactions, we don't have a full accounting of what the Sirotins did," Browne said. "There are other business entities involved, and money flying all over the place. I want to hold off on predicting any more charges. We have to see what turns up."

The Sirotins were charged as co-defendants with five counts of grand theft. In addition, Sirotin was charged with two counts of violating the state's corporation codes for failing to register a partnership agreement.

Six of the counts grow out of the developer's role in forming the limited partnership Lake Avenue Associates, which from 1980 to 1984 developed The Commons, a three-story, 75,000-square-foot retail complex in downtown Pasadena designed to hold small specialty shops on the ground floor and offices on the second and third levels.

The seventh count is related to a second investment group, Lake Avenue Commons. Sirotin was listed as a general partner and his wife as a limited partner in the two groups. Browne said that much of the money was embezzled through checks written and signed by Sirotin's wife or checks written to her.

In a 1980 solicitation letter for The Commons, Browne said, Sirotin told potential investors that he had obtained an $8.5-million construction loan from Bank of America, engaged the services of a well-known general contractor and presold all of the office space at an average price of $150 per square foot.

Dozens of investors eventually bought into the project, only to discover later that neither a construction loan nor a contractor had been secured and Sirotin had not sold a single office space, Browne said.

He said that the Sirotins, using a maze of Panamanian corporations and Swiss, French, English and local bank accounts, diverted large sums of money from the project for personal and business uses.

Took $10,000 From Account

Even after Sirotin wrote investors in February, 1984, that the project was in financial trouble and the partnership was filing for bankruptcy to preserve its assets, his wife took $10,000 from the partnership's bank account, Browne said.

A few days later, the couple left for England with Sirotin asserting that he was broke and in ill health and was traveling to Britain to obtain heart treatment not available in the United States.

"Using bankruptcy proceedings to go behind the backs of investors and steal money was just one in a long list of ruses used by the Sirotins," Browne said in an interview.

The Commons was one of three financially troubled downtown Pasadena development projects headed by Sirotin. Each has left behind a string of angry investors and creditors. Apart from the criminal case, 10 civil suits have been filed against the Sirotins on behalf of 70 investors and creditors.

The suits, now moving through the courts, seek a total of about $134.4 million for alleged acts of fraud, racketeering and nonpayment of fees. Judgments totaling more than $5.5 million already have been awarded in eight other suits against Sirotin, most of them brought by creditors for nonpayment of fees. But almost none of the investors has recovered a penny.

Last year, a London law firm representing Weston-Lusk, the general contractor for all three of Sirotin's developments, obtained a court order freezing European bank accounts belonging to him.

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