Judge Left Bench to Make More Money, but Now He’s Filing Bankruptcy Petition

A former Orange County Municipal Court judge who quit the bench six years ago to make more money as a lawyer has filed for bankruptcy, listing 25 lawsuits against him as part of debts that total more than $4.3 million.

Paul G. Mast of Newport Beach is asking the U.S. Bankruptcy Court in Santa Ana to liquidate his assets, which he listed as $536,800, to pay a host of creditors.

One of the suits the bankruptcy petition will halt is a $10-million class action claiming that Mast and a bail bonding company were paid more than $2 million for their services with money Mast’s client stole in an investment scam.

Santa Ana lawyer Spencer R. Alter, who represents about 125 investors and who filed the class action, said Thursday that pursuing the suit would be “fruitless.”

No Comment

“The bonding company has been liquidated and Mast is bankrupt,” Alter said.

Mast, 52, refused to comment. His lawyer, Andrew P. Katnik of Santa Ana, could not be reached for comment.

In January, 1979, after 13 years as a judge, Mast left the bench, saying, “The prime consideration leading to my decision to retire is money.” He said his $47,497 annual salary at that time was “at best, inadequate.”

Recognizing that it would take time to build a law practice, he also said, “I will be one of the finest attorneys in the county and, as such, expect to make far more than we earn as judges.”

As a judge, the outspoken Mast once ordered the arrest of the county’s chief administrative officer because he did not like a new door that was cut in a courthouse hallway and once declared the state abortion law unconstitutional, freeing a Laguna Beach physician accused under that law of illegal operations.

When he was a lawyer, one of Mast’s major cases was the defense of Ralph W. McDonald, who was accused of being the mastermind behind the largest investment fraud scheme in Orange County history. McDonald was convicted in 1983 of 27 felony counts and sentenced to eight years in prison.

Investors Lost $6 Million

Through his Golden Eagle Investment Co. of El Toro, McDonald bilked more than 1,000 investors out of about $6 million. Trial evidence showed that new investors’ money was used to pay off earlier investors.

According to the Superior Court suit that Alter filed last year for James E. Qualls of Los Angeles on behalf of all investors, McDonald turned over more than $2 million in assets to Mast and $40,000 to Surety Insurance Co. for a bail bond.

Among the assets turned over to Mast, the suit claims, were 22 groups of jewelry and a variety of sports and luxury cars, including an Aston Martin, a Rolls-Royce and a Lamborghini.

While investors may have no recourse against Mast, they still have claims on $830,000 in cash and personal property that Orange County sheriff’s deputies seized in arresting McDonald. The Internal Revenue Service has been seeking the money as taxes McDonald owes, but a U.S. District Court judge ruled two months ago that the money should go to the investors. The IRS has filed a notice of appeal.

In recent months, Alter said, Mast has been trying to convince him that pursuing the suit would force him into bankruptcy or leave the plaintiffs with a judgment Mast could not pay. As part of the persuasion, Alter said, Mast turned over “stacks of stuff showing he’s in financial trouble.”

Alter quoted notices and letters stating that Mast sold the Aston Martin for about $65,000 and the Rolls-Royce for about $90,000 and that the jewelry, once valued at $401,000, was appraised at only $35,000.

Property in Foreclosure

Alter said he figures that about half of Mast’s money went into real estate.

The bankruptcy petition lists three avocado groves in Fallbrook in San Diego County. The parcels, totaling about 30 acres, are in foreclosure under the weight of seven trust deeds for nearly $550,000 plus another trust deed for $180,200 held by his former wife, Renee Mast of Orange.

Mast, who lives in a Newport Beach condominium, also has interests in real estate in Orange and Yorba Linda, according to the bankruptcy petition, which was filed last Friday.