Citing evidence of fraud, a Los Angeles Superior Court judge appointed a receiver Tuesday to take over all assets of Commercial Acceptance Corp., its top officers and a key associate.
The corporate assets are to be handled for the protection of some 400 retirement plans that invested an estimated $60 million in supposedly insured securities of the Los Angeles entity. The company, in turn, lent the money to other businesses. The state Department of Corporations recently alleged in a lawsuit that the bulk of the money went to individuals allied with the firm.
A statement by an Arizona man was sufficient itself to grant Department of Corporations attorney Melinda Brun's motion for a receivership, said Judge Jerry K. Fields, adding: "Not only that, the court probably will call the district attorney."
He did not elaborate on the comment, which raised the subject of a potential criminal investigation.
Dennis E. Wagner, of Glendale, Ariz., who also is a defendant in the state suit, had signed the statement that said he kicked back large sums of money and signed over a 75% interest in an Alaskan company to co-defendants. He said that was in return for millions of dollars in loans from Commercial Acceptance.
Among the people to whom he gave money or signed over property, Wagner said, were several principal defendants in the state's securities fraud suit: Barry F. Gray, David A. Facciani and John C. Ellsworth.
Declaration Called 'Distorted'
In naming Los Angeles attorney David Ray as receiver over the personal assets of the three individuals, as well as of various companies, Fields said there was "plenty of evidence that they have received assets" of Commercial Acceptance.
Earlier Tuesday, Ellsworth told The Times that Wagner informed him by telephone from Arizona on Monday night that the information in his signed declaration was "distorted." Ellsworth said he recorded the conversation, and issued a transcription. In it, Wagner said his declaration was incorrect because it was not "in depth."
Ellsworth said he intends to sue Stephen P. Webb, attorney for a creditors' committee of the firm's investors, who prepared and filed the Wagner statement.
Among other things, Wagner denied saying that Ellsworth had threatened him. Wagner, a former business associate of Ellsworth, also agreed that Ellsworth had not arranged any loans for him from Commercial Acceptance, according to the transcript.
Defense attorney Joann Deutch told the court Tuesday of the tape recording, saying Wagner "categorically denies the contents" of his declaration. Judge Fields exclaimed skeptically, "Come on."
He then refused Deutch's offer to play the tape, telling her, "Get Mr. Wagner here." Deutch, who represents Commercial Acceptance as well as Gray and Facciani, said Wagner was in Arizona.
The judge asked Deutch to explain the supposed insurance policies on the investors' promissory notes from Commercial Acceptance. She conceded that "it may turn out there is no insurance" but said if that were so her clients must have been "duped" by someone.
Fields set a hearing for Dec. 22 on the state's request for an injunction.
Ellsworth himself was not in Fields' court Tuesday. He and his lawyer were at a hearing in U.S. Bankruptcy Court involving a defunct firm that he formerly headed.