Ex-City Official Hodges to Get New Fraud Trial

Former Westminster City Councilman Guinn (Gil) Hodges, who successfully appealed his 1983 conviction on federal loan fraud charges, will stand trial for a second time next month, a Los Angeles federal court judge ruled Wednesday.

U.S. District Judge David V. Kenyon set a Feb. 4 trial date. Hodges, 42, told Kenyon that he is indigent and needs a court-appointed attorney to represent him at the trial.

Hodges, who now works as a process server for a law firm, told reporters that he is innocent of the real estate loan fraud charges and was not aware of any crimes being committed. He said his only job in the real estate office was answering the phone for friends.

Hodges and four others were indicted on charges that they fraudulently obtained about $1.2 million in federally insured bank loans in 1981 and 1982. They allegedly used the money to buy seven Huntington Beach homes.

In 1983, the other defendants pleaded guilty, but Hodges went to trial and was convicted. He was sentenced to 18 months in prison, with all but three months of the sentence suspended, plus five years on probation and a $2,000 fine. He was allowed to remain free pending resolution of his appeal.

According to court records, the prosecution said the scheme was masterminded by Hodges’ brother Barclay in an attempt to launder profits from cocaine sales. Barclay was shot to death in 1982 in a cocktail lounge at John Wayne Airport.

Hodges, who had been a councilman since 1977, resigned by telephone minutes before his Sept. 28, 1983, sentence would have automatically removed him from office.

In September, 1985, the U.S. 9th Circuit Court of Appeals reversed his conviction, saying that although there was “legally sufficient evidence” to support the jury’s guilty verdict, Kenyon had erred by allowing the jury to hear prejudicial testimony implicating Hodges in an alleged extortion scheme.

Paula Johnson Fisher, one of those who pleaded guilty in the case, told the jury that Hodges demanded $5,000 in exchange for painting a “pretty picture” of her involvement in the loan case to FBI officials, according to the appeals court ruling. The appeals court ruled that her description of an incident that allegedly took place five months after the other crimes had been committed prejudiced the jury against Hodges.

Hodges’ attorney, Barry A. Bisson, said he doubted that the government could successfully retry the case because the only material witnesses have either been convicted of felonies or become government informers in other cases.

“There isn’t a witness that had anything material to say that is not tainted,” Bisson said in an interview Wednesday.

Bisson also said there are several procedural issues that might be raised by whoever represents Hodges. He said the delay between the time the appeals court ruled and the time Kenyon set a new trial may have violated Hodges’ right to a speedy trial.

Assistant U.S. Atty. Sharon McCaslin said she will retry the case “without the problematic evidence” and probably call the same witnesses who testified at the first trial. Kenyon scheduled a hearing for Friday to appoint an attorney for Hodges.

Hodges asked the judge to appoint Santa Ana attorney Roger Agajanian, but Agajanian is not on the list of lawyers who can be appointed for federal trial work. Kenyon said he would see what could be done.