Man in Huge Land Swindle Won’t Have to Pay Restitution

A Manhattan Beach financier sentenced to six months in prison for masterminding what may have been the largest land swindle in U.S. history, does not have to pay restitution to the thousands of investors bilked by the scheme, a federal appeals court ruled Wednesday.

Bernard Whitney, 67, and another man were accused of bilking an estimated 6,000 European investors of at least $50 million in cash and may have sold up to $500 million worth of desert land in Los Angeles, Kern and San Bernardino counties.

In an agreement with government prosecutors, Whitney, who faced 57 criminal charges, pleaded guilty to one count of conspiracy, wire fraud and mail fraud. During his sentencing, he was ordered by U.S. District Judge Richard A. Gadbois Jr. to repay the investors after his release from prison. Whitney appealed the restitution order to the 9th Circuit Court of Appeals, which reversed Gadbois.

“Whitney and the government did not enter into a plea agreement concerning restitution,” the appellate ruling said. “The indictment counts to which Whitney pleaded guilty did not state actual dollar losses sustained by the victims of his fraud. Therefore, (Gadbois) erred in imposing restitution as a probation condition.”

The other defendant, former Dutch journalist Rienke Kamer, 41, was sentenced to 16 months in federal prison.