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Investors 'Didn't Have Slightest Inkling' of Trouble at Firm

May 14, 1994|JOHN O'DELL | TIMES STAFF WRITER

First Pension Corp. investors expressed shock Friday on learning that their retirement funds were frozen at best and very likely lost to fraud and theft.

Retired aerospace engineer Irvin Starr, 64, started worrying two weeks ago when he was unable to reach First Pension affiliate Vestcorp by telephone from his home in Hercules, north of Berkeley.

When he called, Starr said, a tape-recorded message told him to punch in a password. "That was a bad sign, because they'd never demanded a password before," said Starr, who invested $80,000 through Vestcorp.

Word of the Securities and Exchange Commission's allegations that First Pension was operating as a pyramid scheme shocked him: "I'm an experienced investor, and I didn't have the slightest inkling that something was wrong."

Neither did Jose Hernandez, who invested more than $100,000 with the company. He saw the first sign of trouble two weeks ago, when First Pension declared bankruptcy.

Hernandez, 70, was preparing for a back-yard barbecue at his home in La Palma when word of the SEC allegations broke Friday. "These people, I don't know where the nerve comes from," he said. "I hope the law will take care of them."

While many said money they placed with First Pension didn't represent their life savings, others, including Glendale resident John Keeler, say they may have lost everything.

About three years ago, the 67-year-old former insurance company inspector put his savings into four different First Pension investment pools. In January, he received his most recent dividend check and was told that the value of the accounts was $5,750.

His only other retirement income, Keller said, is $1,000 a month from Social Security. "I jumped around between jobs so much that I never had a chance to build up any equity" in a retirement fund, he said.

Times staff writers Dean Takahashi, Chris Woodyard and Greg Johnson in Orange County contributed to this report.

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