Mastermind of Fraud Scheme Gets Lecture and a 20-Year Term

A businessman whose son helped convict him of masterminding a multimillion-dollar white-collar crime ring was sentenced Monday to 20 years in federal prison by a judge who characterized him as an ungrateful immigrant.

George Scordel, 54, of Woodland Hills and Pasadena, was sentenced by U.S. District Judge Terry Hatter for running a scheme that used credit manipulation and planned bankruptcies to bilk merchants out of more than $8 million.

Scordel was convicted in March of 45 counts of conspiracy, mail and wire fraud, interstate transportation of stolen goods, obstruction of justice and perjury.

A key prosecution witness was his son, Steve Scordel, 25, of Panorama City. The younger Scordel was allowed to plead guilty to one count of conspiracy and sentenced to perform 1,000 hours of community service in return for his testimony.

Hatter told the elder Scordel that the United States had taken him in from his native Hungary in 1956, and he had repaid the country’s welcome with a life of crime that has led to repeated prison terms, countless victims and the ruined lives of many confederates he talked into joining him.

The judge noted that Scordel’s most recent crimes led to federal indictments against 22 people on more than 60 charges. Fifteen have been convicted, one was acquitted and four are fugitives.

The remaining two, attorneys Chester Brown and Fred Darvey, are scheduled to go on trial before Hatter on Thursday on charges they advised witnesses to lie to a federal grand jury to conceal Scordel’s role in the business scheme. They are charged with conspiracy to obstruct justice, obstruction of justice, subordination of perjury and perjury.

Served Prison Terms

Prosecutors said Scordel set up at least nine corporations in Hollywood and the San Fernando Valley between 1981 and 1986. Because he had served several prison terms in the 1960s and 1970s--for forgery, grand theft, bail jumping and interstate transportation of property obtained by fraud--Scordel remained in the background, they said.

The firms ordered merchandise ranging from paper bags and gold jewelry to microwave ovens from manufacturers and wholesalers. They operated as much as possible on credit, often obtained by giving false information or manipulating bank accounts to create a false picture of prosperity, prosecutors said.

Suppliers who granted more credit received more orders, authorities said. Those who refused to increase credit limits were not paid, they said.

The merchandise was sold cheaply for immediate cash or hidden in warehouses in Van Nuys or Chatsworth to conceal it from creditors, federal investigators testified. The firms then declared bankruptcy, a scheme prosecutors said is called a “bust-out.”

The number of companies who lost money “is incalculable,” said Assistant U.S. Atty. Thomas Hagemann, one of two prosecutors.

“There were literally thousands of companies from every state in the union, so many we couldn’t total them all. This city is littered with the victims of George Scordel.”

Steve Scordel testified that his father brought him into the scheme when he was 19, telling him that what they were doing was illegal but that even if they were caught, he would probably serve less than a year in jail.

In sentencing the younger Scordel, the judge said he took into account his cooperation with authorities and the 19 months he served on bad-check charges brought by the state in connection with the scheme.

The elder Scordel will be eligible for parole in seven years.