AIDS Patient Found Fit for Trial on Fraud Counts

A Malibu AIDS victim accused of masterminding a multimillion-dollar illegal “boiler room” sales operation is mentally competent to stand trial on fraud charges, government doctors have concluded.

Sheldon L. Block, 36, of Malibu, shows no signs of mental impairment and is competent to stand trial or enter into a plea bargain with prosecutors, according to a report issued Monday by doctors at the federal prison hospital in Springfield, Mo.

Block’s attorney, Mark E. Beck, said he will meet with Assistant U.S. Atty. David A. Katz today to try to reach a plea-bargain agreement that would tentatively allow Block to remain free by acknowledging his guilt and forfeiting nearly $2 million in assets.

Beck last month expressed willingness to enter into such an agreement on Block’s behalf, but attorneys for both sides said a finding of mental competence was necessary first.

U.S. District Judge A. Andrew Hauk ordered the tests Sept. 24 after Beck asked him to drop or indefinitely postpone Block’s trial on 75 counts of mail fraud and one count of racketeering, which had been scheduled to begin Sept. 30. Beck contended that Block had brain damage and was incapable of withstanding the rigors of a trial.

Block was indicted in February on charges that he used a telephone “boiler room” operation to sell overpriced or never-to-be-delivered office equipment to businesses across the country. Block’s company, Venice-based Park Distributing Inc., used post office boxes in Sherman Oaks and Encino.

Beck, who earlier contended that being sent to the Missouri institution would constitute a “death sentence” for Block, said Block has had no major medical reverses but has lost weight there.

A medical report issued by doctors at the prison said Block weighed 152 pounds both on Oct. 14, shortly after his arrival, and on Nov. 3.

Block’s IQ is 120 and is not expected to deteriorate substantially before he undergoes trial, the report said.

Quoting from a prison hospital report, Katz said Block was asked by a prison psychiatrist about his plans. “He stated that he hoped to beat the system,” Katz quoted the report as saying.

Katz on Wednesday filed a motion asking the judge to order Block back from Missouri as soon as possible and to set a hearing on the hospital’s findings.