HUNTINGTON BEACH — A defunct investment firm accused of swindling elderly clients of $25 million in an oil-lease scam has been ordered to pay $122,197 to a Lakewood woman.
An arbitration panel for the National Assn. of Securities Dealers found that Huntington Beach-based Pacific Coast Financial Services Inc., its owners and a subsidiary defrauded Winifred Brown, an 80-year-old legally blind widow, of most of her savings.
The award is to be paid by Pacific, its Beacon Energy Inc. subsidiary and company principals Thomas Gans and Don Tullio Morandini, both of Long Beach.
Pacific Coast, the arbitration panel ruled, sold Brown $117,000 worth of high-risk Beacon oil leases it falsely claimed were backed by government-insured bonds. The arbitrators found that Gans and Morandini told the firm's sales agents to make that claim.
Neither executive nor their attorneys could be reached for comment.
Several Pacific Coast brokers settled separately with Brown before the arbitration and testified against Gans and Morandini, said Montgomery G. Griffin, Brown's attorney.
The ruling is the first in a series of legal actions being pursued against Pacific Coast, Gans and Morandini, who are listed as principals of the investment firm in its brochures.
In addition to the NASD action, the company and its principals have been sued twice in Orange County Superior Court by more than 100 disgruntled investors in San Diego. Both suits are pending.
Pacific Coast Securities closed its doors and surrendered its securities broker license in February, blaming its woes on that litigation and on probes by the Securities and Exchange Commission, NASD and the state Department of Corporations.
Lawsuits against Pacific Coast allege that its agents used high-pressure telephone sales pitches to sell mostly elderly clients investments in oil lease partnerships with "guaranteed" returns of 11% or more.
Brown invested a total of $117,000 in Pacific's Beacon partnerships between 1993 and March 1995 and had only received $26,223 in investment distributions by the time the funds dried up last year, Griffin said.
The arbitration award includes her $90,776 loss and almost $32,000 in costs and penalties.