Ray Emery Lamb, once the chief of Ventura County's largest real estate brokerage, surrendered to U.S. marshals Friday to answer charges of bankruptcy fraud.
Lamb, 50, of Thousand Oaks, appeared briefly before U.S. Magistrate Judge Stephen J. Hillman after a grand jury indicted him on charges that he hid his part ownership of a Pacoima coin-operated laundry from creditors, then sold it for a hefty profit.
Lamb is to be arraigned Monday morning on one count of concealment of assets and two counts of making false statements in bankruptcy documents. If convicted of the fraud charges, Lamb faces 27 to 33 months in a federal prison.
He left the U.S. Courthouse in Los Angeles without making comment, after promising to post $50,000 in real estate as bail. His attorney, Steven Powell, also declined to comment.
"This is a serious crime," said Assistant U.S. Atty. Leslie Swain after the hearing. "The asset that he concealed from the bankruptcy court and his creditors was sold for $725,000, and that's the kind of asset a bankruptcy trustee would want to see."
It was not the first allegation of trouble with Lamb's accounting practices.
The state Department of Real Estate revoked Lamb Realty's license in 1990 for negligence and improper supervision of its agents, and fined the agency and Lamb $42,500.
Investigators said the realty firm's agents had helped home buyers obtain loans for more than the homes were worth, with the buyers then pocketing the excess cash. There were no criminal charges in that case.
But at that point, the FBI began investigating possible bank fraud violations because Lamb had allegedly overstated the homes' selling prices to lenders so the excess amount of the loan could be used by buyers who lacked the necessary down payment to qualify for mortgages.
The FBI investigation is continuing, but Swain and FBI agent Theodore J. Bowler declined to comment Friday on its focus.
Meanwhile, FBI agents Wednesday seized some of Lamb's assets, including his 50% interest in a $225,000 note held by a Sacramento firm, his account at a Camarillo bank and his partnership interest in a Westlake limousine service called Director's Transportation Service.
The limo company will be allowed to continue operating while the government holds Lamb's share of it, Swain said.
All the assets will go through civil forfeiture proceedings. If a court finds his holdings were obtained with proceeds from a crime, they will be kept by the U.S. government, said Janet Hudson, chief of the U.S. attorney's Assets Forfeiture Section.
Ray Lamb filed for Chapter 11 bankruptcy in December 1991. His bankruptcy schedule eventually listed $14.9 million in debts and $16.2 million in assets, including an undeclared amount for the company's "goodwill," which represents the value of its business name and other intangibles related to earning power.
At the time, Lamb blamed the depressed real estate market and a Woodland Hills bank's decision to call in a $775,000 loan. A former business associate of Lamb's, who requested anonymity, said the bank refused to extend a rollover loan on which Lamb had been making all interest payments.
But according to court documents unsealed Friday, Lamb kept a hidden nest egg:
In 1987, he bought two coin-operated laundries, which were operated by a man named Stephen J. Semer, in exchange for a share of the business, according to an FBI affidavit. One of the laundries was sold in 1990 and the proceeds spent on improving the other, called La Fiesta Lavanderia in Pacoima
In 1991, Semer learned that Lamb was in financial trouble and that he could lose the laundry if Lamb filed for bankruptcy. Lamb and Semer created a sham transfer that deeded the business over to Semer, the affidavit says.
Several months later, Lamb's parents gave Semer a $250,000 loan to pay off Lamb's bank debt on the purchase--thus hiding the laundry business completely from Lamb's creditors, the FBI affidavit says.
He emerged from bankruptcy in 1994.
The men then sold the laundry business in September 1995, and Lamb walked away with checks totaling about $143,000.
Lamb also received a half-share in a $225,000 note from the rest of the sale proceeds that was to earn him approximately $1,530 a month until Sept. 1, 2001, when the rest of the note would be due and payable, the affidavit says.
The affidavit alleges that Lamb deposited the checks into a Great Western Bank account, from which he then withdrew the money he used to start his limousine service.
And as recently as August, Lamb accepted a $71,000 bank transfer from an offshore account in a Hong Kong bank, Swain alleged at the court appearance.
Meanwhile, the U.S. attorney's office has won convictions against five of Lamb's former employees on charges of mortgage fraud: