Fraud Suspect From Van Nuys Jailed in London Call-Girl Case

A former Van Nuys man who fled the country to escape indictment on charges of masterminding a $1-million fraud scheme has been arrested and jailed in London on suspicion of running a call-girl ring in a fashionable section of that city, authorities said.

Deputy U.S. Atty. David Katz said federal prosecutors have begun extradition proceedings against Thomas Leonard Balla, who was arrested in England with James Foster, a former Calabasas resident, on Sept. 28.

Katz said Balla and Foster were charged with living off “immoral earnings” gained through what British authorities said was a call-girl ring involving more than 200 prostitutes in London’s Mayfair district. Balla, 25, and Foster, 41, were also charged with traveling under false passports and were being held without bail.

Balla traveled under a passport alias as Tom McFadden and Foster’s as Frank Shero.

Defense attorneys representing the men in England had asked a court to set bail in the case but withdrew the request Thursday after prosecutors presented information, supplied by U.S. authorities, concerning Balla’s indictment and Foster’s criminal record, Katz said.

Foster is not involved in the U.S. fraud case involving Balla. However, he was convicted of receiving stolen property and of grand theft in California in the late 1970s, Katz said.

Balla is accused of bilking more than 300 U.S. companies out of almost $1 million while operating a Long Beach vacuum cleaner company between October, 1984, and August, 1985, Katz said.

A 20-count indictment unsealed after Balla’s arrest said he purchased Knolls Vacuum and Sewing Center, a legitimate company, and used its favorable credit rating to order more than $1 million in electronic goods, food, clothing, toiletries and fitness equipment.

Balla set up a phony retail outlet in Oxnard to receive the merchandise and then trucked goods to two Canoga Park warehouses, where they were sold to other individuals, the indictment said.

“With the exception of a few token payments, the victim companies were never paid for the merchandise sold on credit to Knolls,” the indictment said.

Oxnard police, operating on a tip, arrested Balla in Van Nuys on Aug. 16, 1985, and confiscated about $300,000 in merchandise at the warehouses, Katz said. Balla was released on $100,000 bail about a week later, Katz said.

The Ventura County district attorney then dropped the charges and canceled his bail requirement to let federal prosecutors take up the case. But it was not until June 4, 1986, nine months after Balla’s arrest, that a federal grand jury returned an indictment. By then, Balla had left the country.