Encino Realtor Arrested in Forgery of 2 Trust Deeds on Burbank Home

Encino realtor Edie D. Kelly, on probation for a forgery conviction, was arrested again Wednesday on suspicion of forgery and grand theft, police said.

Kelly was arrested at her office at about 10 a.m. for allegedly forging two trust deeds on the Burbank home of her ex-boyfriend’s mother, said Los Angeles Police Department Detective Russell Pungrchar. Trust deeds are IOUs secured by real estate. They can be traded or sold as investments, and are often arranged by real estate brokers.

Pungrchar said Kelly, 52, forged a trust deed for $35,500 on the home of Eileen Rackstraw in July, 1985. The trust deed was purchased by Edward Schneier, a Burbank pharmacist. But rather than giving the money to the property owner, who never knew of the deal, Kelly kept the cash, Pungrchar said.

Schneier was repaid with interest, but last September, Pungrchar said, Kelly sold Schneier yet another trust deed on the same home, this time for $66,666. The detective said this trust deed also was forged, that the property owner never got this money either, and that Kelly repaid Schneier recently after learning that police were investigating.

Pungrchar said Rackstraw learned that a trust deed had been sold and her home encumbered only because, in compliance with a new law, Schneier notified her in February that payment was coming due.

Pungrchar added that Schneier had no idea the trust deeds were forged, and that no investor would knowingly accept a forged trust deed because only a legitimate one secures his investment.

Kelly was sentenced in January to 10 days in jail and five years probation for forging a trust deed in 1984 on commercial property at 16614 Ventura Blvd. in Encino. In that case, investors Karen and Einar Anderson bought a trust deed for $45,000 that turned out to be forged, again without the knowledge of the property owner.

Kelly is also cooperating in a “significant” federal tax and fraud investigation, federal officials have said. Other sources say the probe focuses on a fraudulent investment scheme that may have bilked San Fernando Valley investors.

Kelly’s cooperation was disclosed by Special Attorney Edwin J. Gale, who heads the Los Angeles strike force of the U.S. Justice Department’s Organized Crime and Racketeering Section. Gale said Kelly was a victim of the scheme.

Kelly has had severe financial problems on and off for years. In 1982 she filed for bankruptcy, listing assets of $83,000 and liabilities of $1.85 million. She is still being sued for fraud, among other things, by the Andersons and by Mary B. Rabellino, who owned the property at 16614 Ventura Blvd.

Pungrchar said Kelly was released on $6,000 bail Wednesday after being charged with two counts of forgery and one count of grand theft.

Despite her criminal record, her bankruptcy, and the lawsuits accusing her of fraud, Kelly has retained her real estate license. The San Fernando Valley Board of Realtors, which says it enforces ethics standards, has not moved against her.

The state Department of Real Estate took action last month. Citing her forgery as “a crime involving moral turpitude,” the department on March 6 filed a formal accusation against her. The proceedings that must occur before a possible license revocation will take at least until the end of September, or possibly much longer, said department attorney Marilyn Mosher.