D.A. Says 36 Clients Victimized : Consultant Held in $4.5-Million Theft

A $300-an-hour financial consultant who once likened himself in a newspaper interview to a modern-day crusader fighting for the financial welfare of Southern California physicians is being accused by the Los Angeles County district attorney’s office of stealing $4.5 million from 36 of his clients.

Stephen Harrison Henry, 42, founder of the Mid-Wilshire District investment firm of Henry-Evans & Pierce Co., is scheduled to be arraigned Wednesday in Los Angeles Municipal Court on 36 counts of felony grand theft. Henry, arrested Saturday morning at his La Canada Flintridge home, was being held in jail Monday on $750,000 bail.

A spokeswoman for the firm, now called Evans & Pierce, said Henry left the business in October. Henry’s lawyer, George Oakes, could not be reached for comment.

Deputy Dist. Atty. Frederick G. Stewart said nearly all the 36 clients Henry allegedly bilked are doctors and dentists who invested more than $100,000 each--including one doctor who invested $678,700 and another who lost $438,000. Cynthia Allison, a newscaster with KABC-TV, also invested $100,000, Stewart said.

Stewart said Henry told clients he was setting up pension trust accounts, educational trusts and retirement plans with their money.

Burton McCullough, a lawyer who represents the 36 creditors, said Henry asked clients for money to invest in certificates of deposit that he claimed carried yields 2% to 3% higher than certificates of deposit offered by major banks.

Instead, investigators allege that Henry used the money he collected from May, 1982, to July, 1986, to fund gambling sprees at Las Vegas casinos and then concealed his actions by giving clients false explanations of the status of their investments.

The district attorney’s office began investigating Henry in October, 1986, after some clients became suspicious of his explanations.

Henry, a hulking, bearded man who is 6 foot, 7 inches tall and weighs 280 pounds, was the subject of a June 25, 1985, newspaper profile in USA Today in which he characterized himself and his firm as crusaders for physicians who get into financial trouble.

“We think it’s really good for them to grow up and take responsibility themselves,” Henry said in the article. “We have just one goal for our clients . . . to get them as independent of medicine as they can so they can play doctor because they enjoy it, not because they need it financially.”

McCullough said Henry owns a 1984 Rolls-Royce Silver Spur and a 1983 Mercedes-Benz 380SE, wears Piaget watches, owns a 33-foot yacht. In addition to his La Canada Flintridge home, McCullough said, Henry owns homes in Lake Arrowhead, Palm Springs and a marina in Oxnard, and is part-owner of a $140,000 condominium in Maui.

“He lived the high life. That’s an understatement,” McCullough said.

In a settlement that Henry has agreed to, his assets will be liquidated to repay clients, but, McCullough said, “We’ll be lucky if we get 10 cents on the dollar.”

According to the USA Today article, Henry founded the Wilshire Boulevard firm with Phillip Evans, a systems analyst, in 1971, and in 1985, Richard Pierce, a former hospital administrator, became the third partner. They initially charged $22 an hour but later charged $300 an hour, the article said.

If convicted, Henry faces a maximum sentence of 10 years in prison, Stewart said.