7 Accused of Fraud in Securing Land Loans

Seven Southern California businessmen allegedly involved in a $21-million real estate loan fraud centering on land in Chatsworth and Newhall were indicted late Wednesday by a federal grand jury in Los Angeles.

The FBI arrested six defendants Thursday. An arrest warrant was issued for the seventh defendant, who is believed to be in Costa Rica.

The 35-count indictment accuses the men of setting up an elaborate scheme to defraud 21 financial institutions. The institutions are mostly small savings and loans in the East and Midwest from which the defendants allegedly borrowed $100,000 to $5.8 million from 1983 to 1984.

The indictment claims that the defendants told the banks that money they borrowed would be used to purchase and develop two tracts in Chatsworth and Newhall.

Those indicted were: John F. Hayden, 66, of Santa Ana; Marvin H. Weiss, 59, of West Covina; John W. (Skip) Chodak, 43, of Laguna Hills; Gerald R. Ramos, 37, of Orange; John R. Ward, 46, of Newport Beach; Bruce Furst, 33, of Laguna Hills, and Leo M. Peterson, 42, of Fountain Valley.

Defendant in Costa Rica

A warrant was issued for Ramos, who earlier this year spent four months in federal prison for refusing to cooperate with a grand jury investigating his real estate operations. Ramos is on vacation in Costa Rica, according to his attorney, Robert L. Kennedy.

The indictment stemmed from a continuing, joint investigation by the FBI, the U. S. attorney’s major frauds unit, the California attorney general’s special prosecution unit and the Orange County district attorney’s major frauds unit.

The indictment details an elaborate operation involving several companies working together to arrange the two multimillion-dollar real estate deals. The defendants borrowed $14 million for the Chatsworth project and $7 million for the Rivendale project in Newhall, according to the indictment.

From December, 1983, to February, 1984, the defendants obtained 32 separate loans, the indictment alleges.

Alleges Laundering of Funds

To obtain the loans, the defendants submitted fraudulent appraisals, false financial statements and provided worthless loan guarantees to the lenders, according to the indictment. Instead of using the money to develop the land, the defendants diverted the funds “by laundering the proceeds through shell companies, alter-ego identities and sub-escrows,” the indictment alleges.

The defendants told the banks they planned to build “expensive homes” on the Chatsworth property, according to the indictment, and a hotel on the Rivendale land to serve visitors to the 1984 Olympics.

Ramos and a partner purchased the Chatsworth property in 1984 for $1 million, then resold it to another partnership they controlled for about $14 million, according to the indictment.

The defendants told the banks the land was worth $18 million to $20 million, the indictment alleges.