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Heirs, Fraud Victims Battle for Murdered Swindler's Money

October 25, 1987|JOHN SPANO | Times Staff Writer

More than $100,000 claimed on behalf of the heirs and fraud victims of slain entrepreneur Jimmy Lee Casino has been frozen by a state appellate court, setting the stage for a court battle in Santa Ana.

The decision ends a standoff between courts in Los Angeles and Orange counties over which should decide who is legally entitled to the money, which was placed in an account through a plea bargain that was never completed because of Casino's execution-style killing.

The 4th District Court of Appeal last week froze the funds and directed that ownership be determined in Orange County Superior Court. It also voided an earlier order awarding the money to Casino's estate rather than to his victims.

A frustrated Diane L. Vezzani, Casino's prosecutor, said the decision again leaves the key issue unresolved.

"I'm the one who has to tell these people they have to wait another year to get their money," said Vezzani, a Los Angeles County deputy district attorney.

The lawyer for Casino's estate, Mariellen Ross, agreed that the ruling leaves things "in limbo."

Casino, convicted of counterfeiting, mail fraud and tax evasion, was a fast-talking swindler who ran the Mustang, a topless bar in Santa Ana.

In 1979, he sold 10 Orange and Los Angeles County investors on financing a chain of Cowboy Hotdog stands. He collected more than $900,000 from them and later was accused of misappropriating $755,000. An audit showed that Casino had spent only $173,000 of the investors' money on the ill-fated venture.

In a bid to avoid a five-year prison term, Casino agreed in early 1986 to pay back $412,500 to his victims by Jan. 27, 1987. Los Angeles Superior Court Judge Robert T. Altman made it clear that Casino would be jailed if he did not comply. By the end of 1986, Casino had paid $109,999.56 into the fund.

About 11:30 p.m. on New Year's Day, two men broke into his Buena Park condominium. They tied up his girlfriend, ransacked the home and shot Casino in the head with a small-caliber gun. The killing remains unsolved.

In March, Altman ordered Richard B. Dixon, then Los Angeles City Treasurer, to pay the $109,999.56 to the investors Casino had defrauded.

But lawyers for Casino's estate, arguing that the funds should go to his heirs, obtained an order from Orange County Superior Court Judge James L. Smith prohibiting Dixon from paying the money.

"Reasonable people (may) disagree, and I think the reasonable inference . . . is that reasonable judges can disagree," Smith said at the time.

Casino "died too quickly" to allow the victims to recover, lawyers for his estate argued in court documents.

Because Casino's guilty plea had not been formally accepted, he had not been sentenced. Estate administrator Stanley D. Daubenbis argued, therefore, that Casino was allowed "the opportunity to make restitution to the victims on a purely voluntary basis." It was an escrow account, and title to the funds should not pass to the victims because the full amount was never paid, he contended.

Casino's criminal attorney, Joe Dickerson of Santa Ana, agreed.

Money 'Didn't Change Hands'

"He was paying the money into the account," Dickerson said. "If he paid enough money, he'd get probation. If he didn't, he'd go to the slammer. It doesn't seem to me the money changed hands."

The appellate court rejected those arguments, siding with Los Angeles County prosecutors and lawyers for the city treasurer.

They argued that clear legal authority exists for disbursing the fund to Casino's victims. Even though the fund had not become part of a sentence or probation, it was a condition of Casino's guilty plea. Therefore, the money was being held for the benefit of the victims, they argued.

The appellate court wants "to maintain the status quo until there's a trial," said Ross.

For Vezzani, that means delay.

"It's really not fair to make them wait so long," Vezzani said. "Had henot been murdered, these people would have had their money last January, or at least a portion of it."

Insurance Policy

Since Casino's death, much has come to light about the flamboyant swindler.

He died less than 24 hours after a $100,000 insurance policy on his life went into effect, according to Vezzani. Two $100,000 policies are listed as assets in Casino's probate file. One, by John Hancock Mutual Life Insurance Co., is described as "subject to investigation with respect to the effective date."

It and the other policy, issued by Fireman's Fund Insurance Co., were payable to Shane Lee, Casino's 9-year-old daughter and the youngest of five children, according to court records.

Casino's former wife, Carol Ann Stockwell of Hacienda Heights, has sought $400 a week in family support payments from the estate. That was the amount Casino paid before his death, said Stockwell, who has been appointed the child's legal guardian.

While some investigators claimed that Casino was on the verge of financial collapse, court records are contradictory.

For instance, Casino's accountant said the Mustang generated $2.5 million a year, according to papers filed by the Orange County public administrator's office.

Casino owned two condominiums, in Buena Park and Huntington Beach.

When he died, he owned a $90,000 Rolls Royce and leased a Mercedes Benz.

But Casino was heavily in debt, according to claims against his estate.

He owed $279,000 to an investment firm in Paramount, $25,000 to American Merchant Bank of Newport Beach and $104,000 to First American Capital Bank of Laguna Beach.

Victims of Casino's hot dog scheme also were among claimants seeking money from his estate, including Don Barker of Brea, asking $24,000, and Garrett Skelly of Newport Beach, who wants $40,000.

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