3 Orange County Men Among 7 Indicted in Nationwide Loan Fraud Case

LOS ANGELES — The president of a Newport Beach investment banking firm has been indicted along with six others in an alleged loan and investment fraud scheme that may have duped businessmen and farmers throughout the country out of as much as $2 million, federal officials said Thursday.

Concluding a two-year FBI investigation, a federal grand jury handed down a 29-count indictment that named three Orange County businessmen for their roles in a scheme that purportedly solicited large fees from potential loan applicants with the promise of multimillion-dollar commissions.

In fact, principals in the worldwide network of banks and trust companies involved in the solicitations converted applicants’ loan fees to their own use and never delivered on their promises, federal prosecutors alleged.

Named in the indictment were principals of Fincoll Inc., purportedly an international investment banking firm headquartered in Newport Beach; Resource Preservation Inc. of Tustin, which allegedly claimed to represent a number of foreign trusts with money to lend at below-market interest rates, and other banks and trust firms in Ohio, the West Indies, Panama and Texas.

Between 1982 and 1984, according to the indictment, officials of the companies sought out prospective borrowers around the country through newspaper ads for loans at below-market interest rates.

“The borrowers were told that for a fee of $50,000 to $60,000, they could become part of an international arbitrage transaction that would give them a direct commission of $1 million to $10 million,” the U.S. attorney’s office said in its announcement.

The defendants allegedly told borrowers that they could obtain promissory notes from leading American banks and AAA-rated bonds that would be used as collateral for the transactions. To enhance their credibility, they used a Panamanian corporation that purportedly had billions of dollars to lend at low interest rates and a Carribbean bank doing business in London that supposedly accepted deposits of borrowers’ fees, federal prosecutors said.

Advance fees obtained through the solicitations were laundered through various corporate accounts in the United States and London and eventually turned over to the principals in the scheme, the government contended.

Named as defendants were Achille Haddad, 41, of Newport Beach, president of Fincoll; David M. Novick, 40, of Huntington Beach, president of Resource Preservation Inc.; William Johnson, 38, also of Orange County, vice president of RPI; H. Wesley Robinson, 40, of Kenwood, Ohio; Marshall Nichols, 46, of Scottsdale, Ariz.; Larry K. Thompson, 44, of Lubbock, Tex., and Wallace C. Kemper Jr., 54, an American citizen living in London.