State and local authorities are investigating an alleged multimillion-dollar investment swindle whose victims include members of the Friars Club.
The probe of Univest Home Loan Inc., a Gardena-based firm that uses funds of private investors to finance real estate loans, was triggered by complaints from some clients that their money was stolen.
Targets of the investigation include Univest officials Ruth Yonemoto and Joel Burakoff--a former Friars board member who allegedly used his position with the prominent social club to recruit some victims, say attorneys involved in the case.
On Friday, the state attorney general's office went to court in Los Angeles to seek a restraining order and appointment of a receiver to prevent dissipation of Univest's assets and destruction of key documents. Superior Court Judge Diane Wayne scheduled a hearing on the application for Wednesday.
The state Department of Real Estate has filed an administrative complaint against company President Yonemoto seeking to revoke her real estate broker's license in connection with the case.
The matter also has been referred to the Los Angeles County district attorney for criminal investigation, said Don Tamura, head of the agency's real estate fraud unit.
"We have received various complaints concerning Univest . . . and we're certainly looking into it," Tamura said.
Yonemoto could not be reached for comment. But her attorney, Cornell Price, said, "she personally doesn't feel she's done anything wrong." Yonemoto, Price said, blames Univest's problems on Burakoff.
Burakoff, who is said to be under a doctor's care, could not be reached Friday and his attorney declined comment.
Authorities said they do not know the amount of missing funds, but private lawyers involved in the case said losses total millions of dollars.
Attorney Stanley H. Green said he represents seven or eight investors who lost between $100,000 and $500,000 apiece--in most cases, their life savings. "All these people were [Burakoff's] very close friends," Green said. "He was at their weddings, their birthday parties."
Green said he believes 50 to 100 investors "have been badly defrauded."
The alleged victims include singer Tony Martin and his spouse, famed dancer and actress Cyd Charisse, as well as Irwin Schaeffer, a North Hollywood businessman and president of the Friars Club, whose members include prominent entertainers.
"There's a tremendous amount of money that's unaccounted for," said Schaeffer's attorney Edward G. Lewis. "I can tell you Mr. Schaeffer has lost over $1 million by himself."
Lewis described Burakoff as a "very nice, warm, likable guy [who] ingratiated himself to a lot of people." To Schaeffer, Burakoff "was a confidante, was a friend, and he feels deeply betrayed," Lewis said.
Burakoff is listed in county voting records as a resident of Woodland Hills. Court papers identify him as treasurer and chairman of Univest.
Lewis, a Friars Club vice president, said Burakoff recently resigned from the club's board of directors as a result of the allegations.
"This is a tremendous disaster for us," he said.
According to Department of Real Estate papers filed in Los Angeles Superior Court Friday, an audit examination conducted between April and July shows that Univest negotiates about $3.6 million worth of loans per year, and currently services about 600 loans with monthly collections of $900,000.
The audit found more than $340,000 was missing from trust accounts maintained by the firm, due to unauthorized disbursements and transfers to Burakoff's personal account. Univest uses money from private lenders to finance high-interest real estate loans. According to officials and lawyers for alleged victims, Univest in some instances failed to give loan payoffs to investors--instead continuing to send monthly payments as if the loans were still outstanding.
In other cases, they said, the loans that investors thought they were funding were nonexistent, and monthly payments were mailed to them to give the illusion the loans were real.
"Statements from investors and the [Department of Real Estate] audit reveal that on numerous occasions the defendants diverted money paid by borrowers for payment on loans for their own use," according to a memorandum filed Friday by Deputy Atty. Gen. David S. Chaney.
"This diversion was in some cases accomplished by forging the investors' signatures and by providing erroneous and misleading information to the investor," Chaney said.
The memo continued: "On other occasions, the defendants would obtain money from investors for investment trust deeds secured by real property. However, instead of acquiring the trust deeds, the defendants would deceive investors and use the money for their own use."
Univest is a company that has seen controversy before.
A former principal of the firm--Kevin S. Merritt--faces 18 felony counts of grand theft and filing forged documents. The charges stem from real estate transactions mostly with low-income homeowners.
The case against Merritt was filed by the Los Angeles district attorney's office more than four years ago. But allegations of prosecutorial misconduct have delayed the trial.
Merritt was thought to have left Univest years ago, but the real estate audit--citing a statement by Yonemoto--said Merritt remains a partner in Univest with a 45% stake. Merritt's lawyer Donald Marks said he was unfamiliar with the document and declined comment.