Hidden Hills Man Charged With Investment Scheme

A San Fernando Valley businessman was arrested late Wednesday night by Los Angeles County Sheriff’s deputies for allegedly running an investment scheme in which he collected more than $400,000 from people who thought they were investing in electricity-generating wind machines near Palm Springs.

Philip Gardner, 60, of Hidden Hills, was charged by the Los Angeles County District Attorney’s Office with seven counts of grand theft and 21 counts of violating state securities laws.

Deputy District Atty. Kirk Newkirk said Gardner allegedly collected money from seven investors, telling them he would use it to invest in wind turbines in the San Gorgonio Pass that would generate electricity for sale and also provide investors with tax write-offs.

Newkirk claimed that Gardner may have started to buy machines, but never intended to spend the money the way he told investors he would. Newkirk said the money appears to have been used by Gardner for such uses as paying his employees.

Allegations Denied

Gardner’s lawyer, Stanley I. Greenberg, denied the prosecutor’s allegations. He said the wind machines were leased and secured by a note and deed of trust.

“There was no intent to defraud anyone,” Greenberg said.

Greenberg said Gardner was freed Thursday after posting $100,000 bail. Gardner is scheduled to be arraigned Aug. 4 in Calabasas Municipal Court.

The windmill operation is one of several Gardner investment companies, most of which have operated in the past out of offices in Encino. Other investment programs have included a Nevada gold mine, an experimental helicopter and land in Palmdale, according to state Department of Corporations officials familiar with his operations.

Previous Problems

Gardner has had problems with authorities before over his investment programs. In 1985, the state Department of Corporations ordered Gardner and three companies he operated--Searchlight Goldmining, Regency Quad Fund and Continental Business Management--to stop selling securities without state approval.

In 1973, Gardner settled a lawsuit filed against him by the Securities and Exchange Commission by agreeing to not violate securities laws. The SEC had alleged that a Century City company he headed, Prudential Investment, formerly TSI Financial, had failed to disclose markups and commissions taken by the firm in selling real estate partnerships and that it used misleading appraisals to misrepresent the value of property sold to investors.