Former Orange County developer Harold E. Tobin was accused in a federal lawsuit Tuesday of selling unregistered securities and defrauding investors of nearly $5 million in a botched effort to build homes in Las Vegas.
The Securities and Exchange Commission charges in its civil action, filed in federal court in Los Angeles, that Tobin and his Huntington Beach company defrauded 90 mostly elderly investors in the real estate development he called Rancho Mirage.
The SEC action alleged that investors in 10 states put $4.95 million into Tobin Investment Corp. for the project in the four months before the company's collapse in February 1995.
The agency accuses Tobin of spending most of the investors' money on construction costs for other projects, on interest payments to previous investors and on undisclosed sales commissions and payments to his firm. The SEC wants the money returned to investors and wants an order enjoining Tobin from violating securities laws in the future.
The lawsuit focuses on the last of at least seven projects that were pending when Tobin ran out of money and shut operations. Investors have sued as well, alleging that Tobin and his former bankers and contractors conspired to swindle them out of $35 million on various developments.
Tobin, who now lives in the original Rancho Mirage outside Palm Springs, declined to comment on the SEC action. His attorney, Donald Segretti of Newport Beach, wasn't available, but he said previously that Tobin "got caught in the downturn in real estate" and did nothing intentionally wrong.
Even so, Segretti acknowledged that his client expects to be indicted on federal charges as well.
Tobin's wife, Carolyn, said in an interview earlier this year that her husband was more of an investor than a developer, and that he relied on three builders and some "bad advice."
"He's a naive, gullible guy," she said of the former USC fullback. "He's a very honest, trustworthy guy."