Developer Guilty of Fraud in Land Sale, Jury Decides

Encino developer Jerry Y. Oren was convicted by a Los Angeles federal court jury Wednesday of using a fake letter to inflate the price of a Santa Monica Mountains land parcel he sold to the National Park Service.

The U.S. District Court jury deliberated less than two hours before convicting Oren of scheming to cheat the government in the 1985 sale of 336 oak-covered acres in Agoura’s Cheeseboro Canyon.

The developer, who turned 52 on Wednesday, was convicted of one count of wire fraud and one count of making a false statement in a matter within the Park Service’s jurisdiction. He is to be sentenced Sept. 14 by Judge Harry L. Hupp and faces a maximum penalty of 10 years in prison and $11,000 in fines.

Radoslav L. Sutnar, a consultant to Oren in the transaction, pleaded no contest May 7 to felony wire fraud for his role in the scheme and is to be sentenced July 27.

The case revolved around a fictitious letter that prosecutors charged that Oren used to inflate the appraised value of his property before its sale.

In the letter, a New York real estate agent told Oren that Union Pacific had offered $9.3 million for the developer’s Agoura acreage.

In court, appraiser Thomas W. Erickson said he had set his $8.4-million appraisal based on the purported Union Pacific offer.

A Union Pacific vice president testified that no offer was ever made.

An earlier appraisal had put the land’s value at $5.8 million.

The tract was sold by Oren to the San Francisco-based Trust for Public Land, which was acting as intermediary for the Park Service, in January, 1985, for $7.5 million. The Trust promptly resold it to the Park Service for $8 million for inclusion in the Santa Monica Mountains National Recreation Area.

Each Blames the Other

In court, Oren and Sutnar each blamed the other for initiating the fake letter plan.

Oren also said he did not know the letter was fictitious when he repeatedly assured Erickson that the document was valid at a time when the appraiser was in the process of determining the land’s value.

Sutnar, on the other hand, testified that Oren and New York real estate broker Moishe Ziv worked out terms of the Union Pacific offer in an Encino-to-New York telephone conversation that he monitored on a speaker phone.

He quoted Oren as saying, “Moishe, make it look good.”

Sutnar said that at Oren’s direction, he took notes of the conversation.

Copied ‘Exactly’

Those notes, which he mailed to Ziv, subsequently were copied “exactly” in the text of the fake Union Pacific letter, Sutnar said.

A wire fraud charge against Ziv was dropped in April, when prosecutors said they could not prove that Ziv knew that the letter was to be used illegally.

Sutnar also testified that after the letter arrived at Oren’s Encino office, Oren ordered him to backdate it so that it would coincide with the earliest date on which he had told Trust officials that he had a rival offer.

Oren acknowledged that the letter was backdated in his office, but insisted that he was guilty only of a “very serious error” in allowing Sutnar to alter the document.

“Rad Sutnar walked into my office and said he wanted to change the date,” Oren said. “I had an argument with him and told him not to do it. I was busy and finally said, ‘Oh, go ahead.’ ”

Explains Intent

Oren said he did not think that backdating the letter would affect the purchase price.

To buttress the charge that Oren was responsible for the letter, Assistant U. S. Atty. Ralph F. Hirschmann introduced hotel and telephone records showing that Oren flew to New York and talked by telephone from his hotel room to Ziv’s office at about the time secretary Susan Diller said she typed the Union Pacific offer letter.

Hirschmann contended that if Sutnar had executed the fake letter scheme on his own, “Oren would have discovered it immediately. . . . There is no way Mr. Sutnar could have been some kind of rogue elephant doing this on his own.”