Ex-County Man Goes on Trial for Alleged $21-Million Swindle

After a year on the run, former Orange County financier Gerald Ramos faced a jury Tuesday on charges that he helped mastermind a real estate swindle that left more than 20 East Coast financial institutions $21 million poorer.

Ramos and confederates, most from Orange County, lured investors with promises of a housing development and the construction of a hotel in time to cash in on the 1984 Olympics, prosecutors have alleged.

They allegedly bought grossly inflated real estate appraisals, secured worthless bonds guaranteeing repayment of the loans, and masqueraded as experienced and capable developers, according to Guy N. Ormes, special assistant U.S. attorney and a deputy district attorney Orange County.

Those were the fraudulent elements that went into what Ormes described as “cranked” deals.

‘Watch Where Money Went’

Ormes conceded to jurors that the case was complex, but urged them to “watch where the money went” in following the government’s case.

Ramos, 38, a former resident of Orange, is charged with 33 counts of wire fraud and one count of transportation of stolen property. If convicted, he could face a maximum sentence of 170 years in prison.

He disappeared shortly before he was indicted, along with eight others. He was arrested in Spain last year and in January returned to California to stand trial.

Seven of Ramos’ co-defendants have been convicted, either after trial or guilty pleas. One was acquitted and the third, John Hayden, was indicted earlier this year.

In the trial, expected to last three weeks, four of Ramos’ alleged confederates--including his former partner, John Chodak, 43, of Laguna Hills--are expected to testify against him.

Ramos and Chodak found a 440-acre tract near Chatsworth and arranged to buy it for about $1 million, according to the indictment. They paid an appraiser from Huntington Beach $10,000 to prepare an appraisal fixing the value of the property at $18 million.

The project ballooned to include more property near Newhall, the value of which was allegedly inflated as well.

Ramos and Chodak then got a financial guarantee bond--essentially a promise to pay in the event of default--from Glacier General Assurance Co., run by Hayden. The bond, which appeared to virtually eliminate the risk for investors, was a key element in the swindle, Ormes alleged.

Through Bruce Furst, 34, of Laguna Hills, the group arranged for financing through the Eastern banks and savings and loans.

Rugged, Inaccessible Land

But the Chatsworth property was rugged and inaccessible and a housing project there was impossible, according to Ormes. And it was impossible to build a hotel on the Newhall land within nine months as promised, the prosecutor said.

“The defendants represented they could and would repay the loans. They never did,” Ormes told jurors. “There was never any developing done on either of the properties, and there were no repayments.”

Instead, the principals split the “profit,” prosecutors alleged. Ramos got $3 million, including $750,000 which he tried to transfer to an Atlantic City casino, Ormes said. Chodak received $3 million, Furst $4 million, Hayden $3 million, and other brokers, appraisers and participants about $3.8 million, according to Ormes.

Ramos is represented by Paul E. Potter. U.S. District Judge Harry L. Hupp adjourned the trial Tuesday after Ormes finished his opening statement.