2 Travel Promoters Sent to Jail for Withdrawing Frozen Funds

Two Santa Ana travel promoters, accused of defrauding nearly 100 customers of their vacation money, were found to be in contempt of court and sentenced to five days in jail Wednesday after a judge found they had withdrawn funds from bank accounts frozen by court order.

Prosecutors have charged that tour operators Hugh Powell and Kim Emond enriched themselves by defrauding customers of more than $100,000 paid for ocean cruises and Hawaiian vacations.

On Wednesday, an Orange County Superior Court judge found the men in contempt of court for violating a March order freezing their assets and requiring them to make restitution to their victims.

According to prosecutors, Powell, who faces criminal embezzlement charges on an unrelated matter, and Emond violated state law by using payments from customers for their salaries and general overhead, instead of placing them in a trust fund whose sole purpose was to pay for travel reservations.

Civil Suits Filed

While some customers did get the tours they paid for, Orange County Deputy Dist. Atty. Wendy Brough said that many others arrived at their destinations only to find that their accommodations had not been arranged.

These customers had to pay for their hotel rooms on the spot, despite already having paid Powell and Emond for their reservations, prosecutors said.

Orange County prosecutors, along with the state attorney general’s office, first filed civil suits against the men last year, when they were calling their business Grand Prix International. Powell is president of the enterprise; Emond is vice president.

In March, 1987, the two, along with Hugh Powell’s wife, Sonja Powell, were ordered to set up a trust fund to make restitution to their victims, Deputy Atty. Gen. Jerry Smilowitz said.

But according to Smilowitz, instead they paid their victims back by opening a new travel agency, ITM-Intramark, and defrauding a new group of would-be vacationers.

“We have a violation of the first injunction and a whole new group of victims, along with the old group of victims,” Smilowitz said.

Prosecutors said there were as many as 100 victims in all, each of whom paid an estimated $1,500 to the travel firm.

A court order obtained in March of this year once again required that a trust fund be established that could be used only for payment of travel expenses and restitution for victims, Smilowitz said.

To ensure that no money went unaccounted for, the defendants were required to make all their withdrawals by check.

Cash Withdrawn

But within a week of the order, prosecutors said, Hugh Powell and Emond had opened a new account at a bank in Orange, and withdrew $1,700 in cash.

Brough said a bank executive who had become suspicious of the pair alerted authorities after discovering the injunction that prevented the cash withdrawals. Prosecutors then returned to court seeking the contempt order against the two men.

On Wednesday, Judge William F. McDonald found Powell and Emond in contempt and sentenced them to five days in jail. They were taken into custody immediately after the hearing in Santa Ana.

The defendants, however, are permitted to stay in the travel business, and Brough said they still were operating in Santa Ana. She advised potential tourists to steer clear of Powell and Emond’s firm.

“We have had many problems with travel promotion schemes, and this is one we’ve had the most problems with,” Brough said.

The pair’s attorney, Richard Augustine, did not return telephone calls Wednesday, and there was no answer at ITM’s office in Santa Ana.