Van Nuys Man Pleads Guilty in $686,000 Fraud Case

A Van Nuys man, recently extradited from England where he was a defendant in a celebrated vice trial, admitted in federal court Wednesday that he bilked scores of companies out of more than $686,000.

Thomas Leonard Balla, 25, pleaded guilty to five counts of mail fraud before U.S. District Judge A. Wallace Tashima. Balla could be sentenced to up to five years in prison and fined $250,000 on each count.

Balla’s guilty plea brought a surprisingly quick end to a case that federal prosecutors had feared could drag on for years. While in London, Balla was accused of running a call-girl ring in the fashionable Mayfair district. U.S. prosecutors, anticipating that Balla would be convicted, did not expect to extradite him until Balla had completed a jail term overseas.

But to the surprise of prosecutors on both sides of the Atlantic, the vice trial collapsed last summer amid allegations that a high-priced prostitute was the mistress of a Scotland Yard detective.

British prosecutors, apparently believing that the publicity had compromised their case, dropped the charges against Balla and four other defendants, U.S. Atty. David A. Katz said.

British tabloids jumped on the story and in excited prose told of the “amazing double life” the detective had led with a “passionate Yemeni-born hooker” who reportedly earned more than $500 a night. Katz said U.S. prosecutors learned of the sensational news coverage from photocopies of news clippings that Balla brought with him when he was flown from England to Los Angeles on Nov. 22.

The charges against Balla in the United States stem from his involvement with a Long Beach retail store he purchased in 1984. Katz said Balla used the good credit rating of Knolls Vacuum & Sewing Center, a legitimate company, to order more than $1 million in electronic goods, food, clothing and exercise equipment.

Balla later set up a phony retail outlet in Oxnard to receive the merchandise, Katz said. The goods were trucked to two warehouses in Canoga Park where they were resold, Katz said. Few of the companies were paid for the merchandise, he said.

Balla was indicted on fraud charges June 4, 1986, but was never captured in the United States. He was arrested in London on vice charges Sept. 28, 1987.

On Wednesday, Katz and Postal Inspector J. Jill Crivelli presented Tashima a six-page report listing 209 companies that lost $686,768 to Balla. Another 61 companies lost unknown amounts in the scheme, Katz said.

Balla originally faced 15 counts of mail fraud but pleaded guilty to five counts in an agreement with prosecutors. Balla also agreed to make restitution to his victims, but how much money Balla has is unknown, Katz said.

The investigation will continue, Katz said.

“We think it’s obvious he was a front man for a group of people or a crime organization,” Katz said.

Balla, who is being held without bail at the Terminal Island federal prison, is scheduled to be sentenced March 13.