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Orange County Digest

Local News in Brief : Santa Ana : Loan Broker Charged in $5.7-Million Check Case

February 09, 1988

A Santa Ana loan broker has been charged with trying to pass more than $5.7 million in fraudulent, counterfeit or stolen commercial checks in the last four years.

Richard R. Harris, 59, faces a 22-count federal indictment, Assistant U.S. Atty. Leslie A. Swain said.

Prosecutors alleged that Harris persuaded would-be borrowers that he could arrange loans; that in most cases the loaned money came from stolen checks that banks refused to honor and that Harris began passing bad checks five years ago.

Prosecutors said Harris would agree on a loan total, then deposit checks far exceeding the deal and make even more money by charging loan-origination fees.

In 1984, Harris purported to arrange a $65,000 home loan for a couple but deposited $125,000 on their behalf, the indictment said. When the borrowers asked why, Harris told them that he thought that they could use the extra money to expand the business, prosecutors said.

In 1985, Harris arranged a $500,000 loan for a marine salvage operation off the coast of Central America, prosecutors said.

When $1.5 million was deposited, Harris said he thought that the borrower "could use the extra money," the indictment said.

Swain said most of the bad checks were quickly identified by financial institutions before money could be drawn from the proceeds, but about $950,000 was lost.

Neither Harris nor his lawyer could be reached for comment.

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