6 Fraud Suits Filed Against Del Mar Investment Firm
A Del Mar, Calif., investment firm forced into receivership last July was hit with six last-minute securities fraud lawsuits this week. The suits were filed Monday in Orange County Superior Court against American Principals Holdings Inc., Private Ledger Financial Services, Crown Life Insurance Co. of Toronto, Canada, and 16 other related companies and individuals.
Plaintiffs in the lawsuits, filed on the last day before the statute of limitations ran out, include Lloyds Bank of California and California Federal Savings & Loan Assn., among about a dozen individuals and institutions. Lloyds and California Federal served as trustees for certain investors.
Starting in 1980, American Principals Holdings and a group of its subsidiaries and related companies raised and managed more than $70 million from about 3,000 investors, according to court records. American Principals served as general partner in about 80 limited partnerships involving tax shelters, including real estate syndications, wind power and horse breeding.
In April, 1984, the firm announced an internal investigation into “financial and operating irregularities,” and its two top executives resigned. The company also admitted that it had filed “factually incorrect” tax returns and had improperly borrowed from the partnership funds.
On June 15, in response to a lawsuit filed by the Securities and Exchange Commission, a federal court judge placed the company in receivership.
“It’s a horrible mess,” said David Weinfeld, a Santa Ana attorney who filed the lawsuits against American Principals and the related companies. Weinfeld said he filed the actions to protect his clients’ “available remedies.”
Weinfeld said details of his clients’ claims against American Principals and the other defendants will be filed after the receiver completes a review of the various companies’ records. The receiver, Ashley S. Orr, a former Los Angeles attorney now living in San Diego, has been reviewing books and records for nearly a year.
Neither Orr nor Tom Scheuneman, American Principals’ general counsel, could be reached for comment Tuesday.
Spokeswomen for Lloyds and California Federal said they were not aware of the suits and would have no comment.
