Jury Convicts 2 Businessmen in Real Estate Mail Fraud

Two Orange County businessmen accused of making fraudulent real estate deals have been convicted on 15 counts of mail fraud by a federal court jury after four days of deliberation.

Sidney Binder, 58, a tax accountant from South Laguna, and Daniel Leffler, 46, of Costa Mesa had been charged in a June 6 indictment with defrauding primarily Orange County investors of about $1 million by making false statements when they sold undeveloped land in the Antelope Valley and in San Bernardino County.

The two were partners in five defunct firms known as the Questar Companies. One witness testified during a five-week trial in U.S. District Court in Los Angeles that she lost $500,000 in Questar investments.

Jury members Tuesday could not reach a verdict on one count each of the 16-count indictments against Binder and Leffler. Each man now faces a maximum prison sentence of 75 years and fines of up to $15,000. A third partner, Harry Stone, pleaded guilty to two counts of mail fraud last month and is scheduled for sentencing Monday.

The inquiry into Questar’s activities was triggered unexpectedly in 1981 when Binder complained to a Tustin police officer about one of his partners.

“That started the ball rolling and opened up a can of worms,” said Ruth Dixon, the former Tustin police officer who works as a private investigator in Orange County.

About 400 people had invested about $6 million in various real estate deals arranged by the Questar Companies, Dixon said. After interviewing investors and reviewing the land transactions, Dixon said, she brought the case to the Orange County district attorney’s office for prosecution.

That office declined to take the case. But in August, 1983, Dixon said, the U.S. Postal Inspection Service accepted the case and ultimately brought it to the U.S. attorney’s office for prosecution.

“I am very pleased because I really feel justice has been done in this case,” said Assistant U.S. Atty. Sharon McCaslin, who handled the government’s case.

However, Binder’s attorney, Michael Kenney, said the fact that Binder went to the Tustin police “shows a lack of criminal intent on my client’s part.” Kenney said he plans to appeal the verdict and file motions for a new trial.

Binder declined to comment after the verdict was announced. Leffler, however, blamed his conviction on “lying witnesses.”

Leffler, who was responsible for checking the documentation on various real estate transactions, said investors gave the Questar Companies permission to use their names on the documents but later complained about the practice.

“Each investor got title to each and every parcel they wanted to buy,” said Raul Ayala, Leffler’s court-appointed attorney. “My client was going along with what he believed to be the standard policy in the real estate industry.”

Ayala said he was still discussing a possible appeal with Leffler.

“The overwhelming effect on the jury was a series of mistakes on the part of the defendants,” said Meredith Sidney, the jury foreman. He said it was “a very difficult, hard-fought case because of all the evidence and people involved.”

U.S. District Judge Richard A. Gadbois Jr. set a sentencing hearing for Jan. 6.