Investment Firms Tied to Fraud Defendant Told to Stop Banking

Three Costa Mesa investment firms associated with fraud defendant Achille Haddad have been barred by court order from further banking.

Orange County Superior Court Commissioner Julian Cimbaluk issued the order this week, effective through Aug. 26, against Central Trust Company, Central Trust Investment Bankers and Central Pacific Bancorp.

The firms were ordered to stop banking and using names that falsely imply they are registered with state officials.

Also subject to the order are Haddad and Sharon Jelovchan, identified as executive vice president of one of the firms.

The order was sought by state Superintendent of Banks Louis Carter.

Haddad already faces federal fraud charges in connection with the worldwide investment operations of another firm he heads, Fincoll Inc. of Newport Beach. He has pleaded not guilty to a 29-count indictment alleging investment and loan fraud. That case will go to trial Nov. 3 in U.S. District Court in Los Angeles.

According to the lawsuit filed by the state attorney general’s office, the firms engaged in “an overall scheme” to “fraudulently induce members of the public to enter into financial arrangements advantageous to the defendants.”

Jelovchan’s attorney, Robert S. Pike Jr., said the lawsuit does not allege fraud or wrongdoing. Pike insisted that the only question is the propriety of the name and whether it is confusing or misleading to the public.

Haddad did not oppose the order at a hearing this week, according to his attorney, Robert R. Helfand.

Haddad, listed as president of one of the firms in correspondence filed with the lawsuit, is no longer involved with any of the firms or with Jelovchan, Helfand said.

According to the lawsuit, all three firms have ignored a Feb. 8 warning by the superintendent of banks to stop operating under names that include the words “trust company” and “bank.”

A hearing on the state’s request for a preliminary injunction was scheduled for Aug. 26.