Ex-Bank President Held in $3-Million Fraud on Elderly

A federal indictment against a former San Fernando Valley bank president and civic leader accused of bilking elderly investors of about $3 million was unsealed Thursday after the 74-year-old man’s arrest in West Germany.

The man, O. Monroe Marlowe, was taken into custody Wednesday by Frankfurt police at the request of the U.S. attorney’s office and Postal Service inspectors in Los Angeles, Assistant U.S. Atty. David A. Katz said.

Marlowe’s arrest ended his 10-month flight through seven nations during which he was almost captured twice, in Australia and Singapore, Katz said. He was apprehended when he went to the Frankfurt airport to meet his daughter, who was visiting from Oregon.

$5,000 to $105,000 Lost

A federal grand jury returned the 30-count indictment April 16, accusing Marlowe of inducing about 50 investors, most of them elderly couples, to put $5,000 to $105,000 into what turned out to be phony real-estate loans.

Marlowe allegedly employed a “Ponzi” scheme, making high interest payments to early investors with the money of later investors until he eventually left with the bulk of the money.

A Van Nuys resident for 26 years before he fled the country last September, Marlowe was founding president and chairman of Valley State Bank in Encino in 1978, remaining in those posts until 1981. He co-founded the First Citizens Bank of Sherman Oaks in 1986.

The indictment says that Marlowe was administrator of the First Baptist Church in Van Nuys during the 1960s and the early 1970s, a board member of the Greater Los Angeles Sunday School Convention and active in Faith Evangelical Church in Chatsworth.

He was acting as a broker for his three Van Nuys firms, California Financial Management Services, Private Ledger Financial Services and Monroe Marlowe Investments, when he sought the investments, Katz said.

Story of Rich Borrowers

According to the indictment, investors were told that high-interest, short-term loans were being made to wealthy borrowers who had pledged their expensive homes in Malibu, Brentwood, Beverly Hills and Pacific Palisades as collateral. In fact, there were no borrowers or loans and Marlowe kept the investors’ money for his own use, the indictment alleges.

All business was conducted by mail and the investors were not given the addresses of the homes or copies of loan papers, Katz said. The victims asked few questions because they trusted Marlowe, many having been referred to him by a relative, pastor or close friend, the federal prosecutor said.

Harold Sletten, 62, of Northridge, a retired engineer, said Marlowe was recommended to him by a friend active in the Lutheran Brotherhood. Sletten said he and his wife gave Marlowe “a considerable amount” because of Marlowe’s banking experience and church affiliation.

“I was led to believe he was very conservative and reliable,” Sletten said. “He used that as a facade.”

Appeased Early Investors

Katz said Marlowe kept the investment program going from 1981 until he left the country, appeasing early investors by making some interest payments to them.

“He lulled them along as long as possible,” Katz said. “Then, he began to dodge their calls and make up excuses.”

Last August, a group of investors became suspicious and began to investigate Marlowe’s loan program. They found other investors, held a meeting and hired an auditor to confront Marlowe, Katz said. Authorities learned of the situation, and Marlowe left the country with his wife, he said.

“We think there may be other victims out there who haven’t come forward,” Katz said.

The Marlowes first went to Eugene, Ore., where their daughter lives, Katz said. Authorities then traced them to Canada, Australia, Singapore, France, Portugal and Spain before West Germany.

Authorities monitored Marlowe’s daughter’s activities, hoping she would lead them to him, Katz said. “He was very clever,” the prosecutor said.

Authorities are seeking extradition of Marlowe from West Germany, a process that could take up to six months, Katz said.

If convicted of the 30 counts of mail fraud charged in the indictment, Marlowe would face up to five years in prison and a $250,000 fine. He also could be required to make restitution to his victims, Katz said.