Pair Convicted in Credit Scheme Stole Millions From Merchants

A San Fernando Valley businessman and an associate were convicted Friday in federal court of running a scheme that bilked merchants out of more than $8 million through manipulation of bogus credit and planned bankruptcies.

George Scordel, 54, who has home addresses in Woodland Hills and Pasadena, was convicted on 45 counts of conspiracy, mail and wire fraud, interstate transportation of stolen goods, obstruction of justice and perjury.

Scordel, portrayed in the two-month trial as the leader of a fraud scheme that led to more than 60 charges against 22 people, was acquitted of two counts. Jurors deadlocked on six others after a week of deliberation.

Laslo Pollack, 59, of Los Angeles, an Israeli citizen, was convicted on five counts of conspiracy, mail and wire fraud and interstate transportation of stolen property. Jurors deadlocked on seven other charges against him.

Acquitted of 13 Counts

Natore Nahrstedt, 40, a Culver City accountant, was acquitted of all 13 counts against her, including charges of conspiracy, mail and wire fraud and interstate transportation of stolen property.

Scordel set up at least nine corporations in Hollywood and the Valley between 1981 and 1986. Prosecutors said Scordel, who served several prison terms in the 1960s for writing bad checks, remained in the background and hired more than a dozen people, including his own son and Pollack, to “front” for him as the owners.

The firms ordered goods, ranging from paper bags and gold jewelry to microwave ovens, from manufacturers and wholesalers, operating as much as possible on credit.

Sometimes suppliers were given false credit information, prosecutors said. Sometimes, Scordel’s employees funneled money into bank accounts--leaving it there just long enough for a credit check and removing it again--to make the corporations appear solvent when merchants checked his financial status.

Nahrstedt was accused of preparing fake financial statements to use in the scheme, but she argued successfully that she composed them unwittingly, using false data given to her by Scordel.

Once the companies had the merchandise, they sold it cheaply for immediate cash or hid it in warehouses in Van Nuys or Chatsworth to conceal it from creditors, testified Scordel’s son, Steve Scordel, 25, of Van Nuys.

Bankruptcy ‘Bust-Out’

Suppliers who granted generous credit received more orders. Those who refused to increase credit limits were not paid. When the companies had exhausted all the credit they could obtain and suppliers were threatening legal action, the younger Scordel said, they would declare bankruptcy, a scheme called a “bust-out” by federal investigators.

The younger Scordel, a witness for the prosecution, said his father got him involved in 1981, at age 19. His father told him that, although what they were doing was illegal, “the chances of getting any jail time are very slim and would probably only be a year,” the son testified.

The son eventually served 19 months in jail for writing bad checks in connection with the scheme and for violating probation terms.

The younger Scordel said he also remained hidden from suppliers in the subsequent companies they formed so he would not be recognized by those who had lost money when the earlier firms collapsed.

Prosecutors said suppliers lost almost $15 million in the scheme, but the charges brought covered only about $8 million worth of goods.

Once federal investigators began looking into their activities, Scordel persuaded several people to lie or tailor their testimony before a grand jury, which led to the charges of obstruction of justice and pressuring witnesses to testify falsely.

Thirteen people, including the younger Scordel, pleaded guilty. Four are fugitives.

Two attorneys face a separate trial on obstruction-of-justice charges for allegedly advising figures in the case to lie to a grand jury.

Pollack and Scordel face sentencing April 18.