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College Finds Itself Snared in Heat-Pump Saga

September 22, 1988|DENISE HAMILTON | Times Staff Writer

A month after police charged a Ventura businessman with 47 felony counts in connection with marketing what he touted as an energy-saving heat pump, Ventura College installed one of his devices in its swimming pool.

A company run by Dennis M. Lee donated the electrical pump to the school in July and claimed it would heat the pool more cheaply than gas, college officials say. But last week, concerned about the controversy over Lee's business and skeptical about the heat pump's effectiveness, the college disconnected it.

"We had a feeling that there was not a savings derived," said George Lanning, vice president of administrative services at Ventura College. He added that the school is still assessing the pump's performance as a supplement to its gas heater.

Preliminary Hearing

The college's involvement is the latest twist in the convoluted saga of Lee, who claims he will soon show followers how to produce household and industrial electricity at no operating cost. A preliminary hearing scheduled to begin next Monday in Ventura County Municipal Court is expected to shed more light on Lee's claims.

The pump first came to the school's attention via Wayne Phelps, a business teacher for 23 years at Ventura College and an investor in Lee's company. Phelps declined to elaborate on his business relationship with Lee.

Phelps blamed the pump's less-than-successful trial on Lee's business problems. The disintegration of the company left it without technicians to adjust the equipment, Phelps said.

Free Installation

Lanning said he agreed to the free installation at Phelps' urging and despite his knowledge of Lee's arrest.

"My reaction was, if it's something they're willing to donate and it's saving money, why shouldn't we try it?" Lanning said this week.

Then, several weeks ago, Lanning said he received a call from an Oregon man who wanted a full report on the "huge savings" that Ventura College supposedly had reaped after installing the heat pump. The man, a potential investor in Lee's business, also wanted to fly to Ventura with colleagues to inspect the pump, Lanning said.

Lanning said he told the man that the college was merely testing the equipment and had not yet noticed any savings. He also called Lee's organization, then known as Conserve Financial Services, and complained about what he called false representations. He said a heat-pump installer at the firm insisted that no such representations had been made.

The Ventura County district attorney's office alleged in a criminal complaint last June that Lee misrepresented the machine's energy-saving potential to investors and misappropriated more than $800,000 from 200 victims throughout the United States. The complaint charges Lee with nine counts of grand theft by fraudulent misrepresentation and 38 violations of California's seller-assisted marketing plan law.

Lee, who sits in Ventura County Jail on $750,000 bail awaiting next week's hearing, is a charismatic, 6-foot, 250-pound man who sports an evangelist's drawl and the fervor to accompany it. He plans to represent himself in court and compares his plight to that of Preston Tucker, the flamboyant businessman who stood up to Detroit with his newfangled car and survived repeated scrapes with the law.

"I am not a guilty man; I'm an innocent person," the 42-year-old Lee said in a recent interview. He also stands by his claims that "free electricity" is just a few months away if he can get out of jail and back to business.

Lee blames his troubles on a conspiracy between law enforcement and the big utility companies, which he says have joined forces to keep energy prices artificially high. In the videotapes he uses to recruit investors, Lee invokes God and patriotism and rails against the conglomerates that soak the public and defile the environment.

Lee has many devoted followers throughout the country. After his arrest in June, hundreds of supporters besieged the district attorney's office, the Sheriff's Department and local newspapers with telephone calls demanding an investigation and Lee's release.

But not everyone wants Dennis Lee back on the street.

News of Lee's arrest pleased Paula Selis, an assistant attorney general in Washington state.

"I'm really glad to hear they brought criminal charges against him. This guy has gotten around, and he's affected a lot of people and made a lot of money," said Selis, whose office in 1985 brought a civil action against Lee for violating Washington's consumer protection act.

"He was doing business dishonestly. He told people it would save 70% to 80% on their energy bills," Selis said.

Agreed to Judgment

Lee eventually agreed to a stipulated judgment of $31,000 but left the state without paying those fines, Selis added.

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