Theft Case : Real Estate Promoter Gets Prison Term

Orange County real estate promoter William Campbell was sentenced Wednesday to four years in state prison for stealing $1.5 million from three real estate partnerships and defaulting on a $150,000 loan from the defunct Capistrano National Bank.

Campbell, 53, who pleaded guilty to four counts of grand theft last September, was immediately taken into custody to begin serving his sentence at the state prison in Chino.

Wednesday’s sentencing came after six postponements and a change of judges that delayed the hearing for three months.

In ordering Campbell to prison, Superior Court Judge Francisco Briseno rejected arguments by Campbell’s attorney that a downturn in the real estate market and mistakes by employees created the problems that caused huge losses at Campbell’s Vista Investment Properties Inc.

The Orange real estate company packaged and sold millions of dollars worth of real estate limited partnerships. Campbell controlled dozens of partnerships holding property in California, Texas and Hawaii. County prosecutors said hundreds of investors, mainly Orange County residents, purchased interests in the partnerships.

Deputy Dist. Atty. Connie Ferris, who argued the case against Campbell, said at the original sentencing hearing in February that the charges represented only “the tip of the iceberg.” The district attorney’s office, she said, “just didn’t have the resources” to investigate other possible crimes.

No Appeal Planned

Investors in the three Orange County partnerships that Campbell admitted draining of funds lost about $1.5 million when the promoter diverted the partners’ funds for his personal use, according to Ferris.

In addition to diverting partnership funds, Ferris said, Campbell failed to repay a $150,000 loan he obtained from Capistrano National three years ago. Campbell got the loan by using trust deeds for property held by various partnerships as collateral. An attorney for the bank, which was declared insolvent last month by federal bank regulators, said Campbell owes about $280,000, including interest.

Campbell’s attorney, Dominic Rubalcava, said Wednesday that he does not plan to appeal the sentence. “I think at this point, we’ll take a deep sigh and let a little bit of the dust clear,” he said.

Prosecutor Ferris said she was pleased with the sentence. “I think it’s a fine sentence, considering that he does have a clean background,” said Ferris, referring to the fact that Campbell had no prior arrests.

Ferris, who asked Briseno for the four-year sentence, said that under California law, Campbell must serve about two years before being considered for parole.

“It is really what we wanted,” said Phyllis Leeper, an investor who helped Ferris investigate some of Campbell’s partnerships. “I’m happy. This is what we worked for.”

Leeper, who has replaced Campbell as the general, or controlling, partner in several partnerships in which she and her husband had invested, has devoted nearly all of her time in the last three years to the Campbell case. She was among 15 or so investors who attended Wednesday’s hearing.

Campbell’s attorney said that Campbell and his family had invested $418,000 of their own money in various Vista partnerships, including $100,000 invested by Campbell’s mother. “Campbell has no personal resources. He’s being evicted from his home,” Rubalcava said in an interview after the hearing.

Because the sentencing was delayed six times over several months and was shifted from one judge to another, Rubalcava said Campbell felt like he was “going before a firing squad” six different times.

The county’s case against Campbell began about three years ago after an angry investor reported Campbell to the Orange Police Department’s fraud division.

“Four years is not bad for a white-collar crime,” said George Johnson, who investigated Campbell’s business operations when he was an Orange fraud detective. “It’s what the case deserved.”

Johnson, now a private investigator, spent about two years piecing together evidence for the county’s case. A key factor in the prosecution’s case was a 60-foot-long flow chart prepared by Johnson. The chart traced checks in and out of Campbell’s bank accounts.