Financial adviser and radio personality R. G. Reynolds has failed to repay $5.7 million to about 400 investors whom he bilked in two investment schemes, according to a motion filed Wednesday in federal court by the Securities and Exchange Commission.
The SEC motion asks U.S. District Judge A. Andrew Hauk to hold Reynolds in civil contempt for not producing the funds.
Reynolds last December was found to have violated civil securities laws for enticing investors into schemes involving, among other things, a Kern County gold mine. A judge ordered him to repay investors $5.7 million, including interest.
"As of this day, he has not paid anyone," said Sandra Harris, an attorney who serves as branch chief for the SEC's Los Angeles regional office. "His attorney has stated that he does not have any funds."
Jenny Scovis, Reynolds' attorney, was in court and could not be reached for comment, an associate in her Thousand Oaks office said. In a February, 1990, letter to a court-appointed disbursing agent, Scovis wrote that Reynolds does not "have any funds."
Reynolds, chairman of a Laguna Niguel firm, Flow Ventures Ltd., was out of town and could not be reached for comment late Wednesday, according to a receptionist. A man who identified himself as a Flow Ventures employee declined to describe the firm's business but said, "It is a legitimate company."
In April, 1987, federal agents raided Reynolds' Burbank office and served warrants on 11 other locations, seizing records and rare coins. In April, 1988, the SEC filed a formal complaint against Richard (R. G.) Reynolds alleging he was operating an unregistered investment company and was an unregistered broker-dealer.
In December, 1989, Judge Hauk ruled in the SEC's favor, agreeing that Reynolds violated securities laws.
Based on information collected in the raid, Hauk established the amount Reynolds must pay back to investors. The judge ordered the funds to be placed in an interest-bearing account while Reynolds is appealing his securities fraud conviction.
Reynolds continues to give investment advice on a weeknight talk show on radio station KORG-AM in Anaheim. A spokeswoman for the station said Reynolds buys the air time for the one-hour show, which is broadcast between 6 and 7 p.m. Monday through Thursday.
"He's not an employee of the station," said Carol Bennett, a spokeswoman for the station. "He's an independent contractor. We don't know anything about his business."
Bennett said she did not know how to reach Reynolds or the broker who buys his air time. She said the station charges about $200 an hour for its broadcast time.
Reynolds, who legally changed his name from Richard Fernando Gonzales in 1980, according to Florida court records, was stripped of his state insurance license in 1983. A year earlier, he had left his native Florida and moved to Burbank after filing for personal bankruptcy.
On his radio show and during seminars, Reynolds touted various investment programs. One, called the Moreland gold program, involved the sale of ore from a Kern County gold mine.
The gold mining operation was set up by William Moreland, a Reynolds associate. In 1986, the state Department of Corporations ordered the gold mine investment operation shut down. The SEC's Harris said Moreland filed for bankruptcy after he was ordered to repay investors $300,000 a month.
A hearing on the SEC's contempt motion has been scheduled for Sept. 24.