The Region : 2 Indicted in $1.9-Million Fraud Case

Two men were named in a 22-count federal indictment in Los Angeles Tuesday that alleged that they swindled more than 160 people out of $1.9 million in advance fees for purported loans offered at below market interest rates. Named in the indictment were William J. Sheehan, 37, of Manhattan Beach, and Dallas A. Phillips, 48, of Citrus Heights, Calif. Assistant U.S. Atty. James R. Asperger said the pair approached people, principally living in the Far West, between 1980 and 1982 with loan offers, with Sheehan allegedly claiming that he could secure up to $400 million from foreign investors. “The loans were to be repaid over a 15-year period at an interest rate of 10%, at a time when market rates were substantially higher,” Asperger said. But in order to obtain the low-interest loans, an advance fee had to be paid. Much of the fees were diverted to the two men’s personal use, and none of the promised loans were ever made, investigators added.