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Highflying Financier Held in Ponzi Probe

The Region

Courts: Laguna Niguel man, 78, allegedly pocketed $17 million in fees for loans that were never made.

January 29, 2002|MONTE MORIN | TIMES STAFF WRITER

Richard A. Parker, a 78-year-old Laguna Niguel financier who once offered to fund construction of the world's tallest skyscraper, has been arrested by federal authorities and accused of pocketing more than $17 million in a worldwide Ponzi scheme.

An 18-month investigation into allegedly fraudulent practices at Parker's Laguna Hills firm culminated late last week in an FBI raid. Agents arrested Parker because they feared he was preparing to flee, according to court documents.

In papers filed Monday at federal court in Santa Ana, authorities charged Parker with using false promises of a loan to fraudulently obtain $100,000 from International AirFinance Ltd., a firm that had hoped to borrow $400 million from Morgan, Weinstein & Co., which Parker operates with his son, Richard Parker II.

Concerns that the elder Parker might flee prompted FBI agents to arrest him last week.

Despite investigators' belief that Parker is a flight risk, a federal magistrate set his bail at $250,000. Parker has yet to post the $25,000 bond required for release.

If he does, he will be prohibited from soliciting funds while free on bail.

He was ordered to appear in federal court in Los Angeles next month to answer to the charges.

Neither Parker nor his attorney, James Henderson, would comment on the government's allegations.

Morgan, Weinstein has described itself as one of the nation's most successful loan brokers, a firm that has provided loans for hotels, casinos, racetracks and office buildings worldwide.

Increasingly, however, former clients have complained about their dealings with the firm, and in a civil fraud case that Morgan, Weinstein lost in July, a $30-million judgment was entered against the company.

In federal court papers filed in Santa Ana, FBI investigators say Parker pocketed at least $17 million in hefty retainers he demanded from loan clients.

Although Parker's firm promised that the retainers would be refunded if loans failed to materialize, investigators said this rarely occurred.

In the few cases when the retainers were refunded, Parker and others did so by using retainer fees paid by other victimized clients, documents allege.

In flashy brochures that promised funding for multimillion-dollar ventures, Parker said he controlled more than $30 million in assets in Asia as a source of loan funds.

But federal investigators say $22 million of that consisted of fraudulent Japanese bonds and checks, and $10 million allegedly in a Singapore bank has turned out to be "a nonexistent, or phantom account," authorities said.

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