Radoslav L. Sutnar, a prominent figure in development issues in Los Angeles, pleaded no contest Thursday to a felony charge that he helped fraudulently inflate the value of property in the Santa Monica Mountains that was sold to the National Park Service for a record $8 million.
In changing his original plea of not guilty to no contest before U.S. District Judge Harry L. Hupp, Sutnar, 56, testified that he had helped falsify the date on a fictitious offer for the property that was used to increase the land's value.
"I had a feeling that perhaps it was not the cleanest thing that was happening . . . . " Sutnar said in court.
With Sutnar's change of plea, only one defendant, Encino real estate developer Jerry Y. Oren, remains to be tried in the case. A felony charge against a third defendant, Moshe Ziv, who was accused of writing the fictitious offer at Oren's request, was dropped April 30. Assistant U. S. Atty. Charles J. Stevens, who is prosecuting the case, said there was not enough evidence to prove Ziv knew that the offer was to be used to defraud someone.
In an indictment handed down March 12, federal prosecutors charged that Oren solicited a fabricated offer of $9.3 million to convince an appraiser that the land's value was much greater than the $5.8 million established in a previous appraisal.
The charges stemmed from a transaction in 1985 in which Oren sold a 336-acre tract of oak-dotted meadows in Cheeseboro Canyon, near Agoura Hills, to the Trust for Public Land, a nonprofit organization that purchases land for later resale to federal or local parks agencies.
The trust, which bought the land for $7.5 million, immediately resold it for $8 million to the Park Service for its Santa Monica Mountains National Recreational Area. The purchase was the most expensive ever made to expand the recreational area, a loose string of parks and trails between Griffith Park and Point Mugu State Park in Ventura County.
The complex, three-way deal could not have taken place without an appraisal confirming that the land was worth what the government was paying.
Valued at $5.8 Million
According to the indictment, the first appraisal commissioned by the trust set the value of the property at $5.8 million. That appraisal was never submitted to the Park Service because the trust had already signed an option to buy the property for $7.5 million and it needed an appraisal that at least matched the purchase price.
With the deal hanging in the balance, the trust, after hearing that Oren had another offer for the property, commissioned another appraisal, which took into account the competing $9.3-million offer that Oren had fabricated, according to the indictment. The second appraisal set the value at $8.4 million.
In the indictment, Oren, 51, a developer with dozens of holdings around Los Angeles, was charged with one count of wire fraud and one count of making a false statement in a matter within the jurisdiction of the National Park Service.
Ziv and Sutnar, 56, who was a consultant to Oren at the time, were each charged with one count of aiding and abetting Oren's wire fraud.
Confirming a chronology alleged in the indictment, Sutnar testified before Hupp that he was present at a meeting in which Oren and Ziv, who was speaking from New York and was heard by Sutnar over a speaker phone, arranged for Ziv to send a letter to Oren indicating that Ziv had a client interested in buying the Cheeseboro tract.
Soon after, a letter arrived in which $9.3 million was offered for the property.
When the fictitious offer arrived in the mail, Sutnar testified, "Oren was upset" that Ziv had not predated the letter.
The date had to be changed, Sutnar testified, to jibe with previous statements made by Oren to the trust indicating that the trust was not the only party interested in buying the land. Sutnar testified that he helped Oren change the date on the letter.
When asked by Hupp why he was admitting to the facts alleged in the indictment but not pleading guilty, Sutnar's attorney S. Myron Klarfeld explained that a lawsuit his client had filed against Oren might be jeopardized by a guilty plea.
Breach of Contract Alleged
The suit, filed one day after the property was sold to the Trust for Public Land in January, 1985, alleges that Oren reneged on a contract he had with Sutnar to pay him a fee of 10% of the $7.5 million--$750,000--upon the closing of the sale. The suit has yet to go to trial.
A guilty plea would jeopardize that suit, but a plea of no contest and any admissions connected with that plea cannot be used as evidence in a civil case, Klarfeld said.
Sutnar could face up to five years in prison and a $1,000 fine. If Sutnar cooperates with the prosecution in testimony at the impending trial of Oren, the Department of Justice will recommend that the court reduce his sentence, prosecutor Stevens said in court.
Stevens also said that no further charges will be brought against Sutnar related to the case. A sentencing date for Sutnar was set for June 29.
In 1985 and 1986, Sutnar was president of the Los Angeles County Countywide Citizen's Planning Council, a 50-member body that advises the Regional Planning Commission and Board of Supervisors on development issues.
Sutnar is on a leave of absence from the council. At a status conference after Sutnar's change of plea, Oren's attorney, Donald M. Re, was granted a delay of the trial date from May 26 to July 7. Ray recently replaced Oren's previous attorney, Burton Marks, who is ill.