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Attorney Found Guilty of Swindling Westside Hotels


A San Diego attorney was found guilty Tuesday of swindling four Westside hotels out of more than $55,000 in a scam in which his company helped two alleged Boston organized crime figures avoid paying extravagant hotel bills, the Los Angeles district attorney's office reported.

Fred Henry Arm, 55, was convicted in Van Nuys Superior Court of six counts of defrauding an innkeeper, said Sandy Gibbons, spokeswoman for the district attorney. He also was convicted of one count of grand theft for stealing $36,000 from the Border Steel company of Los Angeles, she said.

Arm, who faces a maximum of six years in prison, is scheduled to be sentenced Feb. 11 by Superior Court Judge Michael Hoff. Arm was taken into custody Tuesday after his bail was increased from $75,000 to $250,000, Gibbons said.

Arm, president of La Jolla Fidelity Trust in La Jolla, sent letters of credit in 1990 to the Regent Beverly Wilshire Hotel, the Beverly Hilton Hotel, Loew's Santa Monica Beach Hotel and the Radisson Bel-Air Sunset Hotel on behalf of Frank Salemme Sr. and Frank Salemme Jr. of Boston, Gibbons said.

Both Salemmes allegedly have ties to the Boston Mafia, Gibbons said. The elder Salemme once served a 15-year prison sentence for blowing up the car of a Massachusetts attorney who represented a Mafia informant, she said.

The Salemmes then rented rooms at the hotels in April, 1990, and ran up more than $55,000 in bills for rooms, food, items from hotel shops and other expenses, Gibbons said. The bills were then sent to La Jolla Fidelity Trust.

"He contacted the hotels in advance and arranged for the bills to be sent to La Jolla Fidelity Trust," Gibbons said. "The bills were never paid."

The elder Salemme was acquitted of fraud charges last year in connection with the hotel bills, and the younger Salemme is expected to be tried on fraud charges this spring, Gibbons said.

In the Border Steel case, Arm was convicted of illegally keeping more than $36,000 in fees for bond work he was supposed to perform but did not complete, Gibbons said.

La Jolla Fidelity Trust is under investigation by several government agencies, including the state Department of Insurance and the State Banking Department, she said.

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