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U.S. Judge Orders D.A. to Return Papers Seized in Doerring Case

September 19, 1986|BILL RITTER | San Diego County Business Editor

SAN DIEGO — The complicated Doerring & Associates real estate case took a bizarre, Keystone Cops-type twist Thursday when the district attorney's office was ordered to return a carload of documents it had seized from the offices of the federally appointed Doerring liquidator.

U.S. District Judge Earl B. Gilliam, after a two-hour hearing Thursday morning, ordered the San Diego district attorney's office to return the Doerring books and records it had seized Wednesday or present evidence on why they shouldn't on Monday morning.

Doerring, once a large real estate investment firm that attracted more than $65 million from 800 well-heeled investors, is now being liquidated under the auspices of a federal court-appointed "disbursing agent."

A federal judge last year issued a restraining order prohibiting anyone from taking possession of Doerring property during the liquidation.

However, shortly before 2 p.m. on Wednesday, more than a dozen investigators from the district attorney's office, armed with a search warrant, entered Doerring's offices in downtown San Diego and seized the carload of books and records.

The disbursing agent and his attorneys--who claim they were supposed to be at a meeting with representatives of the district attorney to hear an update on the criminal investigation--were livid, and took their case to federal court Thursday morning.

"They ripped the place apart without (notifying) us," said Don McGrath, attorney for the court-appointed disbursing agent, Thomas Lennon.

Representatives of the district attorney's office removed "boxes and records we need to operate the business," said Lennon. "Basically, they shut us down, 10 months after I was appointed. Does that make any sense? The D.A.'s behavior is highly suspect; it borders on being irrational," he said.

Lennon said that his staff was not allowed to make or accept any phone calls during Wednesday's search.

Deputy Dist. Atty. Duane Shinnick said that his investigators searched the offices for Doerring business documents from 1984 and 1985.

Shinnick, who has been leading the monthslong Doerring criminal investigation, is cross-sworn as an assistant U.S. attorney, which means he can investigate and later prosecute the case, if applicable, under federal laws.

Tom McArdle, the district attorney's counsel, said he would present evidence Monday morning to justify his office's seizure of the Doerring documents.

Meanwhile, McGrath said in court documents filed Thursday that the raid not only violated a federal order but disrupted the liquidator's office and may have hurt "potential sales of assets."

The seizure also invaded the attorney/client privilege, he added.

Sought Documents

McGrath said that county officials asked for the documents several months ago, but that he "told them to give us a subpoena." McGrath said that he didn't want to spend Doerring estate funds without being under formal order but had told the district attorney's office that "we'll cooperate."

Spokesmen for the district attorney's office said Thursday that they interpreted McGrath's insistence on a subpoena or search warrant as an unwillingness to aid in their investigation.

"We didn't get cooperation," McArdle said.

Lennon said Thursday that he is in the process of selling Doerring's real estate interests. He predicted that Doerring investors will get most of their money back but that "it will just take time." Doerring attracted more than $65 million from 800 investors, including many prominent San Diegans. It also attracted money from several pension funds belonging to local companies.

The Securities & Exchange Commission last year sued several Doerring executives. They have since signed consent agreements that prohibit them from violating federal securities laws.

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