ANAHEIM — By most accounts, it was a rowdy night at the old Dal Rae restaurant as players for the Comanches flag football team and their sponsors ate and drank their way through a boisterous meal.
During that December, 1986, evening, the adult players intimidated other customers, confronted armed guards and kicked down an office door as a hulking 6-foot-3, 230-pound Gerald J. Garner directed some of the action.
Garner, though, was no football coach. He was a banker--chairman of American Commerce National Bank in Anaheim, a team sponsor. He also was a director of the company that owned the Fullerton restaurant, now called the Del Rae, and had been trying all month to seize physical control from the company's president.
Garner's interests in the Dal Rae and other restaurants are among a number of insider deals now under scrutiny by banking regulators who closed American Commerce on April 30.
The federal takeover was the nation's first-ever closing of a well-financed, seemingly healthy bank. The Office of the Comptroller of the Currency alleged that insider abuses and other violations of banking laws were so pervasive that it no longer could trust Garner or the bank's "weak, abusive and self-serving" officers and directors.
In more than a dozen lawsuits, affidavits and interviews with former associates, Garner's reputation as a charitable executive and well-known Orange County fund-raiser is tarnished by assertions that he bullied his staff, manipulated bank accounts and ran roughshod over quiescent bank directors and inexperienced business associates.
Though magnanimous at times, Garner also would stoop to petty retribution. He caused one employee who left the bank to be fired from a new job, and he tried to bad-mouth other workers who left, said other Orange County bankers.
Garner even took a former teller to small claims court over a $1,000 discrepancy at her teller station.
He lost the case.
"This man is a menace," said Dr. Donald J. Daniel, a former American Commerce board member. The physician clashed with Garner in 1987 and said he lived in such fear of the onetime New York lawyer that he carried a .38-caliber handgun for several years.
The doctor alleges that Garner once threatened him by saying that he had represented organized crime figures in New York and still knew them.
Last year, Garner was disbarred in New York for lying to banking regulators about previous disciplinary action against him, including a 1984 suspension from practicing law for using false names of adoptive parents in notarized legal documents.
The 56-year-old founder of American Commerce, a one-branch bank, would not agree to be interviewed for this story or comment about accusations by bank regulators, former employees and associates or the civil lawsuits filed against him.
Shareholders like Santa Ana lawyer Frank P. Barbaro can't believe that someone as hard-working and diligent as Garner was involved in so much litigation and could face such drastic action by the federal government.
"The newsletters we were getting from the bank were glowing," he said. "The bank was doing good things too, like sponsoring youth events and programs for the elderly and minority groups."
Among Garner's business relationships under federal scrutiny is his chairmanship of Coast Plaza Doctors Hospital in Norwalk, where two American Commerce directors and a major bank shareholder are physicians. His wife, Joan, and his brothers, Danny and Harvey, also recently took staff positions at the hospital.
While Garner's philanthropy has been much publicized, his banking and litigation woes have escaped media attention.
Several lawsuits involve restaurant and real estate deals in which Garner found partners to organize and run operations or buy into existing companies. The suits allege that he then would wrest away control, sometimes accusing his new partners of theft and mismanagement.
Typically, regulators said, the comptroller's office never knew that Garner or other directors had stakes in the restaurants or that the bank's loans to these companies were benefiting insiders.
Three Garner-controlled restaurants were the Dal Rae, Uncle Gee'z in Fullerton and Maloney's Fine Dining in Yorba Linda. All went bankrupt.
At the Dal Rae, Garner arranged a $250,000 loan in 1985 to help Alfred H. Stuetzle buy the restaurant out of bankruptcy. But Stuetzle had to give up 51% of the ownership to five shareholders picked by Garner.
Two restaurant shareholders were also bank directors--Garner's wife and Santa Ana lawyer Duffern H. Helsing--and one was a close Garner associate at Coast Plaza hospital, Dr. Sheldon S. Zinberg. Stuetzle was president and manager, but Garner was chief executive and one of the directors, according to court records. The Garner shareholders received $500 a month in director's fees.
