U.S. Jury Indicts Newport Couple for Fraud

Claiming to have broken one of Southern California’s largest frauds, U.S. Atty. Robert C. Bonner announced the indictment Wednesday of a Newport Beach couple who allegedly used fake documents to obtain fraudulent real estate loans totaling $70 million.

The federal grand jury indictment, Bonner said in Los Angeles, charges Robert A. Buceta and his wife, Patricia L. Thibault, both of Newport Beach, with 32 counts of mail and wire fraud and conspiracy.

Buceta and Thibault allegedly obtained loans through fraud in 1983 and 1984 from financial institutions in Stockton, San Diego, Newport Beach and Salt Lake City. Two of the firms are in receivership and a third is out of business, federal authorities said.

The defrauded institutions, according to the indictment, were State Savings of Stockton, now American Savings & Loan; Sun Savings & Loan, now in receivership in San Diego; State Savings & Loan Assn., now in receivership in Salt Lake City, and the defunct Sko-Fed Mortgage Corp. of Newport Beach.

The indictment alleges that Buceta bilked the institutions by engineering same-day purchases of the same properties at different prices. The transactions involved seven apartment buildings located in California, Colorado and Florida.

According to the indictment, Buceta would arrange the purchase of an apartment complex at one price, then buy it again at a higher price with borrowed money, profiting from the difference.

The indictment also charges Buceta and Thibault with preparing false tax returns and financial statements in an attempt to persuade the thrifts to loan money on the properties.

Sun S&L sued Buceta in 1985, claiming that he and others set up sham escrow accounts that artificially inflated property values supporting $12 million worth of loans. At the time, the Buceta loans were described as the largest of several blocks of problem loans at Sun.

Federal authorities declined to say if there was any relationship between the Buceta transactions and the collapse of three of the institutions.

Buceta could not be reached for comment, but his attorney, David R. Nissen, said he was “engaged in legitimate business enterprises.” Nissen said Buceta will plead not guilty.

“They are inflating this to make newspaper headlines,” Nissen said. The lending institutions “knew exactly what was happening all the time and were never misled,” Nissen claimed.

Condo Conversion Claims

Buceta allegedly obtained interim funding to buy the properties from Keystone Financial Corp., a now-defunct Newport Beach mortgage banker. At the same time, he allegedly obtained advance commitments from the financial institutions to purchase the notes from Keystone.

Buceta was able to arrange the deals in part by claiming that he intended to convert apartment complexes to higher-priced condominiums, but such work rarely took place, according to Assistant U.S. Atty. Patricia Collins.

According to the indictment, Buceta engineered nearly simultaneous purchases of the same apartment complexes. Each purchase was by Buceta, his wife, a confederate, or one of his firms: Capital Properties, Pacifica, Omni Plus or DCB partnership.

The second purchase price, based on the proposed condominium conversion, was invariably higher than the first, producing profits for Buceta, according to the indictment. In effect, the deals allowed Buceta to obtain loans for more than the initial purchase price, prosecutors alleged.

Some examples, according to the indictment:

- Capital Properties, one of Buceta’s firms, purchased the Rock Springs Apartments in Escondido in 1983 for $3,675,000. On the same day, Buceta bought the property from Capital Properties with a loan from Keystone for $6,435,000. State Savings in Stockton bought the loan from Keystone in a transaction reflecting the higher price.

- Pacifica, another Buceta firm, purchased the Woodhaven Greens apartments in Ft. Worth, Tex., for $12.3 million. On the same day, it sold the property to Buceta, Thibault, Capital and Omni for $21.1 million. State S&L in Salt Lake City later bought the note.

Collins declined comment on the amount of money actually lost by the four thrifts.

Bank Board Investigation

The Federal Home Loan Bank board, which insured at least two of the failed thrifts, has also investigated the Buceta loans, Collins said. In addition, Nissen said a civil lawsuit based in part on the Buceta loans is pending.

The alleged Buceta swindle is one of the largest in Southern California “based on the amount and number of financial institutions involved and the fact that the properties involved were located all over the country,” Collins said.

None of Buceta’s firms is still in operation, Nissen said. Buceta and Thibault have agreed to turn themselves over to federal authorities on Friday, he said.