6 Indicted in Beverly Hills ‘Boiler Room’ Fraud Case

Six Southern Californians have been indicted by a federal grand jury on charges of running a Beverly Hills-based “boiler room” operation that bilked hundreds of victims out of diamonds, stocks, bonds and cash, the U.S. attorney’s office said Wednesday.

Assistant U.S. Atty. William F. Fahey estimated that the eight victims covered in the indictment lost “at least $300,000,” with the possible total loss much higher. One 77-year-old woman lost $150,000--most of her life savings--when she sent in her jewelry, cash and negotiable bonds.

Four of the six defendants named in a 25-count indictment, returned Feb. 6, were arrested Wednesday by FBI agents. They are Steve Angelica, 35, of Los Angeles; Stephan Small, 27, of Sherman Oaks; Robert McCallum, 41 of Agoura, and Leslie Small, 23, of Los Angeles. Two others, Bruce Kaufman, 31, and Jerry Owens, both of Los Angeles, are fugitives.

The indictment said Angelica and Stephan Small set up Kimberly International Gem Corp. in June, 1982, and hired salesmen they provided with “canned sales pitches.”

Potential customers were allegedly told that Kimberly would buy their diamonds and send back the proceeds. After customers sent in their valuables, according to the indictment, the items were sold and the proceeds never reached customers.