Accused Firm Asks Shift of Slum Case to Federal Court

A & B Loan Co., accused of racketeering in connection with financing some of Los Angeles’ worst slum buildings, filed a motion Wednesday to have the lawsuit against it and more than 130 other defendants moved from Superior Court to federal court.

Max Greenberg, an attorney for the Inglewood-based lending institution, and its co-owner, Alexander Spitzer, said a notice of removal was filed in U.S. District Court in Los Angeles. He declined to elaborate on why the motion was filed, saying only that it was an “appropriate step to take in the litigation.”

The lawsuit--in which A & B Loan Co., some of its officers and 137 other defendants have been accused of conspiring to siphon profits from 11 slum buildings--was filed last week in Los Angeles Superior Court by the city attorney’s office, the Legal Aid Foundation and a private law firm.

Variety of Charges

Among the 15 laws allegedly broken by the defendants is the federal Civil Racketeer Influenced and Corrupt Organizations Act (RICO). The suit contends that A & B, Highland Federal Savings & Loan, and a host of building owners were able to profit from and control the city’s worst slum buildings through fraud, racketeering and numerous civil violations.

Deputy City Atty. Stephanie Sautner said that Wednesday’s removal filing was expected “ . . . because RICO is traditionally a federal claim. . . . This is a tactic to try to split up the case, causing us more work.”

However, Greenberg contended that the violations of state law alleged in the suit could also be tried in federal court.

‘Not an End’

“In this case I think the state court matters will go over to federal court. . . . (The filing) is not an end to the state causes of action.”

The plaintiffs’ attorneys have not yet decided whether they will file a motion to have the case moved back to Superior Court.

“The merits of the case remain the same in Superior Court or federal court,” said attorney Barrett S. Litt.

The lawyer added that federal court officials still must rule on whether the case will be heard at that level.