Banker Pleads Guilty in Loan Scheme That Cost Victims $2 Million

A Newport Beach investment banker pleaded guilty Monday to wire fraud in a scheme that netted $2 million from victims who thought they were paying application fees for large loans.

Achille Haddad, 42, president of Fincoll Inc., entered the plea before U.S. District Judge A. Andrew Hauk. He faces a maximum of five years in prison.

Haddad victimized a wide range of would-be borrowers, from the wealthy hoping to get more to a farmer near bankruptcy, prosecutors said.

The plea brings to three the number of defendants who have pleaded guilty to the scam, which prosecutors said victimized dozens of investors between 1982 and 1984. Another man has already served a prison sentence in the scheme, and another, long a fugitive, has been convicted of unrelated fraud charges in London.

Although Haddad was not the mastermind of the scheme, about $1 million in the application fees have been traced to him, according to William Sellers, a lawyer with the criminal division of the U.S. Department of Justice in Washington who handled the case.

Also Monday, William Johnson, 39, of Orange County pleaded guilty to knowing about the swindle and trying to conceal it. He faces a maximum of three years in prison at sentencing.

Haddad and confederates claimed to have a source of millions of dollars of funds available at interest rates far lower than those charged by United States banks, Sellers said. The source was variously identified as “offshore,” Panamanian or Arab.

Some potential borrowers were told that the loans could turn out to be “self-liquidating,” that is, no repayment would be necessary, according to Sellers.

But once the borrower put up a $50,000 to $60,000 loan application fee, it was converted to the use of Haddad and others, according to prosecutors.

“The victims were everybody from a farmer who couldn’t get money--he had been turned away by banks and couldn’t get it anywhere else--to those who wanted to get rich quick,” Sellers said.

Sellers said the plea agreement made sense because the government’s case was “largely circumstantial.”

Haddad’s firm, Fincoll, purported to be an international investment banking firm. Also allegedly involved was Resource Preservation Inc. of Tustin, which claimed to represent foreign trusts with money to lend at low rates.

In addition to Haddad and Johnson, Larry K. Thompson, 45, of Lubbock, Tex., has also pleaded guilty and faces a maximum of three years in prison.

The men whom Sellers called the masterminds are Wallace C. Kemper and Wesley Robinson, 41, of Kenwood, Ohio. Robinson has already served a four-year sentence in the investment scheme.

Kemper, who was a fugitive for years, was recently convicted of fraud in London, Sellers said.