Judge Asked to Revive Telink Fraud Case

Times Staff Writer

A special federal prosecutor has asked a judge to reverse his ruling and reinstate charges against 10 men accused of bid rigging, fraud and bribery in the award of a contract to an Anaheim-based telecommunications company for a $24.5-million San Diego County telephone system.

U.S. District Judge Earl Gilliam took the attorney’s arguments under advisement Friday and promised a ruling within a week.

The judge last month threw out indictments against two former county employees and eight telecommunications officials charged in the case involving a contract for Telink Inc. of Anaheim. Gilliam cited a recent U.S. Supreme Court ruling and a federal appellate court decision that restricts mail fraud prosecutions to those in which indictments specifically spell out money or property losses suffered by the victim--in this case, the county government.

But Lantz Lewis, an assistant district attorney assigned temporarily to the U.S. attorney’s office, argued Friday that subsequent federal court decisions have rendered the earlier appellate opinion “obsolete.” Lewis also said that under Gilliam’s ruling, federal law enforcement officials could “move only after the government has been fleeced” in order to prove that losses had been suffered.


The prosecutor argued that the federal mail fraud law was meant for prosecution of people who attempt unsuccessful scams against a governmental agency--as well as to punish those who profit by their crime.

“There is no requirement in the law that the scheme be successful,” Lewis said, calling the appellate court decision on which Gilliam based his dismissal an “illogical” interpretation of the high court’s ruling.

As evidence for his position, Lewis cited several recent federal court cases in which intangible losses were considered in convicting the schemers. San Diego County, while not losing money in the award and later recision of a contract for a sophisticated microwave communications system, lost the intangible value of competitive bidding for the system and the honest services of some county employees involved in the alleged scheme, Lewis argued.

But Christopher Schatz, representing the defendants in the case, said Lewis failed to address the cause for the judge’s earlier decision to throw out the indictments against the 10 men: the failure of the indictments to identify the “scheme” that allegedly was aimed at defrauding the county government. Schatz said the indictments also failed to detail other specifics essential for a mail fraud prosecution.


The Telink scandal, which San Diego County Dist. Atty. Edwin Miller called “the most massive fraud and public corruption scheme ever perpetrated against the county of San Diego,” became public in October, 1982, when law enforcement agents armed with search warrants seized documents from offices and homes of more than a dozen county and telecommunications industry officials.

The case involved a county bid award for a sophisticated microwave communications system to Telink, a company founded in 1974. Telink was acquired in about 1980 by Fort Lauderdale-based Burnup & Sims Inc. After irregularities in the bid process surfaced, business leaders called for a county grand jury investigation of the contract. The inquiry eventually expanded into a joint probe by federal and county authorities.

Resulted in Resignations

The investigation showed that the plot to rig the award process began in 1980, when Abraham Stein, former county chief of communications, proposed a plan to assure that one of the firms seeking the contract would be chosen in return for kickbacks and favors to those involved in the scheme.

The resulting federal indictments rocked county government, causing the resignations of half a dozen top county administrators. The indictments contained descriptions of the use of cocaine, prostitutes, money bribes and threats in the attempt to influence the contract award.

Ultimately, Telink and Burnup & Sims Inc. pleaded no contest to charges of fraud and racketeering and repaid the county $3.6 million for its losses, plus $1 million for costs of the prosecution.

The 10 men whose charges were dismissed by Gilliam last month are H. Larry Gonzales, former county director of general services; Stein, the alleged mastermind, who is now serving time for an unrelated crime; Don Woodaman and Michael Sage, former officials of the now-bankrupt Telecommunications Design Corp. of Orange; Jim Linder, former Telink chief of marketing; Bobby Hendrix, former Telink president; Robert Palmer, former manager of Telink’s San Diego office; and Robert Schreiber, Bernard Campbell and Henry Richter, former top officials at Telecomm Consultants Inc.

Prosecutors have already said they will take Gilliam’s dismissal of the charges to the U.S. 9th Circuit Court of Appeals if the judge does not reinstate the case.