2 Arrested on Claims of Fraud Against Mattel
Two businessmen accused of defrauding Mattel out of nearly $4 million have been arrested on federal mail fraud charges.
A former vice president of Hawthorne-based Mattel and a Century City businessman hired to collect accounts receivable for the toy company were picked up by law enforcement officers two days apart. Both men had been missing since federal investigators began checking into the scheme in 1984.
On Monday, FBI agents arrested Stanley R. Medved in Boston. Medved served as vice president and accounting controller for Mattel’s electronics division until early 1984.
Police in Monte Carlo arrested Neil G. Van Luven on Friday, according to Assistant U.S. Atty. Gary Feess. Van Luven was president and controlling shareholder of Accounts Receivable Consultants Inc., a Century City firm hired by Medved to help collect money owed Mattel’s electronics division.
Details Disclosed
Details of their alleged scheme were revealed in documents unsealed Tuesday in Los Angeles federal court.
According to a federal complaint, Medved hired Van Luven’s company in 1983 to help collect money owed Mattel. Between Oct. 24, 1983, and mid-February, 1984, the complaint alleges that Van Luven collected $4 million but returned only $503,000 to Mattel.
“ARC paid Medved a kickback of at least $972,000 over the period from Nov. 11, 1983, to Feb. 3, 1984,” the complaint said. “Medved laundered these proceeds through offshore corporations and foreign bank accounts,” according to the complaint.
Spencer Boise, a Mattel spokesman, said Medved left Mattel in early 1984. He said the electronics division, which manufactured video games, was sold to a former manager and a group of private investors for $20 million cash in February, 1984.
He said he was aware of the Medved case, but it would be “inappropriate” for the company to comment on Medved’s arrest.
According to an affidavit written by FBI special agent Richard D. Beach, Medved and his wife controlled a Panama corporation called Davetta Associates S.A.
“The total of all checks payable to Davetta was $972,461.98,” according to Beach’s affidavit. Beach traced other checks written by Medved and Van Luven that were deposited in bank accounts in New York, Beverly Hills, Geneva and the Grand Cayman Islands.
Both men will be returned to Los Angeles to face trial.
