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First Pension Co-Founder Looks Back, Accepts Some Blame : Profile: William E. Cooper also points to others in lengthy fraud. To make amends, he wants to help identify similar scams.

February 03, 1995|DEBORA VRANA | TIMES STAFF WRITER

LOS ANGELES — With an impish smile and a Boy Scout pin fastened to his tie, the William E. Cooper pictured in Bellflower High School's 1961 yearbook looked like the kind of guy who would guide an elderly woman across a busy street--not grow up to steal her life's savings.

But Thursday, Cooper, now 51, was sentenced to 10 years in a federal prison for defrauding thousands of mostly elderly clients of $136 million.

Along with two partners, Cooper operated First Pension Corp. in Irvine, one of Southern California's longest-running and most elaborate Ponzi schemes, cheating thousands of customers out of their retirement nest eggs by enticing them to invest in phony mortgages.

Along with his Bellflower High School classmate Robert E. Lindley, 51, of Laguna Niguel and Valerie Jensen, 47, of San Juan Capistrano, Cooper created a scheme that bilked clients out of $73.1 million in direct investments and $63 million in interest, federal prosecutors have said. Investors were persuaded to buy second trust deed mortgages, which the defendants have admitted were phony almost from the start.

During an interview with The Times last week to be published after sentencing, Cooper discussed the operation of his scheme and the extent of his wrongdoings.

"There has not been a day since 1983 that I haven't struggled with this," said Cooper, his voice choking. "There were many times we believed we could overcome it. But it was a race we couldn't catch up with. It's something you can't describe in terms of the anguish, the stress, the torment you have to live with every day."

Sitting in the 50th-floor conference room of his lawyer's downtown Los Angeles office, with a rainy day view of the Hollywood Hills and glimpse of the Griffith Observatory behind him, Cooper accepted some of the blame for what happened, but also sought to place blame for the fraud to other First Pension officials as well. He apologized to investors, and said that he wants make amends by offering his services to those who investigate fraud schemes throughout Southern California, such as the Securities and Exchange Commission.

From the former dairy fields of Bellflower, Cooper grew up to eventually hobnob with the likes of former Vice President Dan Quayle, former Gov. George Deukmejian and U.S. Congressman Christopher Cox.

Many of his high-powered friends, though he won't say who, have stuck by him in his dark hours, offering money and letters of support, Cooper said. Besides running his fraud scheme, Cooper was considered an expert campaign fund-raiser, who also found time to travel with his second wife to vacation homes in Maui and Deer Valley, Utah, from his $700,00 home in Villa Park.

Real estate was Cooper's love, the foundation for his fortunes. Cooper started in the mortgage business when he was only 18, moving on to work for a string of mortgage-related companies.

"I liked the business because it was fast-moving, a new transaction every day. There was lots of interaction with people and it was a very professional business," he said. "It was easy to master without a formal education."

He never went on to get a college degree, but after working at a series of firms, Cooper became a master architect who designed companies and limited partnerships all constructed on a foundation of elaborate lies.

Cooper went to such lengths to protect his scam that he hired an actress in 1990 to impersonate a state investigator--who gave his company a clean bill of health--in order to calm increasingly nervous employees, according to court documents.

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Cooper met his current and former wives in the mortgage business. He has an adult son, Travis, who lives in San Jose and is "still angry," at him, Cooper said. He and his second wife, Terri, owned a three-bedroom, English-style home in Villa Park's exclusive Sommerset neighborhood. Cooper said that he is now separated from Terri, who he maintains knew nothing of his fraudulent activities. They have a 5-year-old son, Padon.

Cooper said last week that he never wanted to steal anyone's money. What he really wanted to be was a builder and civic leader, like his late father, an aerospace worker who had time to run for Bellflower City Council, serve on that city's Planning Commission and still develop building projects on the side.

"There's a part of me that's a builder," Cooper said. "My father always had some project going on. We built some apartments and we built a ski boat. I liked that."

Ironically, Cooper did become a builder of sorts--constructing and planning a pyramid scheme in an attempt, he says now, to recoup money for investors.

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