Woman Testifies Against ‘Dear Friend’ : Claims Accountant’s Suggested Investments Cost Her $500,000
A Cypress woman who trusted her tax accountant enough to include him in her will--and appoint him guardian of her dog--testified against him Friday in federal court, claiming that she lost about $500,000 in investments he arranged.
Nancy Stovall was a key prosecution witness in the government’s mail fraud case against two Orange County businessmen on trial in Los Angeles. The investments were arranged through several firms known as the Questar Cos.
Sid Binder and Daniel Edward Leffler are charged with defrauding dozens of primarily Orange County investors of more than $1.2 million, according to an indictment filed June 6. The defendants allegedly made fraudulent statements when they sold undeveloped land in the Antelope Valley and San Bernardino County to investors “at inflated prices,” the indictment said.
The defendants allegedly told investors that some land had water and streets, when it did not, according to the indictment. If convicted on all 16 counts, Binder, 58, and Leffler, 46, each face 80 years in prison and $16,000 in fines. Both men have pleaded not guilty to all the charges.
A third business associate, Harry Stone, pleaded guilty to two counts of mail fraud before the trial began last month.
“We considered him (Binder) such a dear friend, we were going to leave him money,” Stovall told the jury. She said she even named Binder guardian of her dog “Toy,” in case she died. Stovall, a Los Angeles investment firm employee, testified that she purchased two parcels of land near Victorville from Binder because he told her that the land was worth $600,000. She later sold both parcels for $50,000.
In an interview, she said that losing so much money by investing in Binder’s real estate deals and a money-losing fishing fleet “changed our . . . life . . . . I can’t believe what happened.”
Binder lives in South Laguna and still has a tax-preparation business, according to his attorney, Michael Kenney.
“If the investor is successful, everyone pats him on the back,” Kenney said in a courtroom interview. “This is just a situation where three out of four new businesses fold in the first year and unfortunately this is what happened here.”
Kenney said the $1.2-million loss alleged by the government covers the cash spent by investors for down payments on various parcels of land. He said the losses might be “four to five times more, if you count the paper,” referring to the loan documents traditionally included in a real estate deal.
According to the indictment, Binder, Leffler and Stone sold undeveloped land and limited-partnership investments through several companies from the late 1970s through 1981. The companies were Questar Marketing International Inc., La Englatoria Limited Corp., San Vicente Limited Corp., Tiburon Limited Corp. and Kog Inc.
The U.S. Postal Inspection Service decided to prosecute the case after the Orange County district attorney’s office declined, according to court records.
