Local News in Brief : 2 More Plead Guilty in ‘Boiler Room’ Scam

Two of three remaining defendants accused of participating in a $35-million “boiler room” telephone sales fraud have pleaded guilty or agreed to plead guilty to charges stemming from the scheme, a federal prosecutor said Tuesday.

The pleas will make AIDS victim Sheldon Block of Malibu, the alleged mastermind, the only one of 24 defendants who has not pleaded guilty in the mail-fraud and racketeering ring, which drew in money through San Fernando Valley post office boxes, Assistant U.S. Atty. David Katz said.

Douglas Parsons, 25, of Gardena, pleaded guilty Monday to one count of using a fictitious name, and U.S. District Judge William J. Rea set sentencing for Dec. 15. Parsons could receive up to five years in prison, Katz said.

Chester Hultberg, 39, of El Cajon agreed on Monday to plead guilty Oct. 15 to one count of tax evasion, Katz said. The charges carry a maximum sentence of five years in prison, a $100,000 fine and tax penalties, Katz said.

Both men worked at Park Distributing Inc., Block’s Venice-based company, which allegedly sold overpriced and often undelivered office supplies through a telephone “boiler room” operation.

Block, 36, who is charged with 75 counts of mail fraud and one count of racketeering, was declared mentally incompetent and ordered into federal custody last Wednesday by U.S. District Judge A. Andrew Hauk.

But Judge Alfred Goodwin of the U.S. 9th District Court of Appeals on Friday granted an emergency stay ordering authorities not to send Block to Missouri for four months of diagnostic tests until a three-judge appeals court panel can consider the issues.