Records Detail Silberman’s Financial Woes

While Richard T. Silberman allegedly was pressing for a second money-laundering deal with federal agents who said they represented Colombian drug traffickers, the San Diego businessman was imploring friends and associates to help him sell his foundering gold mining company or raise the cash needed to save it, according to sources close to Silberman and the company.

Federal securities reports and state court records also show that Silberman’s company, Yuba Natural Resources, was deeply in debt and facing lawsuits from creditors and a $515,000 judgment from the federal government for dredging for gold on land it did not own.

Silberman and his wife, San Diego County Supervisor Susan Golding, have disposed of much of their extensive real estate holdings in recent years, according to disclosure reports filed with the county by Golding.

May Have Been Struggling

Together, the documents and interviews suggest that Silberman, who was commonly thought to be one of San Diego’s wealthier businessmen, may actually have been struggling to keep his financial affairs afloat in the period during which the FBI alleges he offered his services to conceal the source of hundreds of thousands of dollars in illicit funds.

“He was tenacious about this thing,” said a friend of Silberman’s about the businessman’s efforts to obtain help for his company. “He did not want to see this thing go sideways. I don’t think he wanted a failure. He was reaching out to anybody and anyone who could help him.”

In early December, Silberman, allegedly having already completed a $100,000 money-laundering transaction, asked an undercover FBI agent if he could “do another deal”--in the FBI’s words--before the end of the year, according to a federal affidavit. In a tape-recorded conversation, Silberman said he hoped that “by now you’re satisfied that it’s first class . . . and, uh, there’s a lot more potential if we got active,” the affidavit says.

Money From Drug Dealers

The affidavit said Silberman “pressed” the undercover agent to obtain more money to launder through his company before he left for the Orient on Dec. 15. He allegedly made the overtures even after being told repeatedly that the money was coming from Colombian drug dealers.

It was also in December that Silberman asked Alan Aiello, Rebecca Wood and Llewellyn C. Werner to join the company’s board of directors and help find someone to invest cash in the troubled firm or purchase the company, according to a source close to Silberman who asked not be identified.

Aiello, a former Bank of America executive, and Wood, an accountant, are associates of M. Larry Lawrence, who owns the Hotel del Coronado and is a longtime player in California Democratic politics and former member of the company’s board. Werner served in state government with Silberman under former Gov. Edmund G. Brown Jr. and is now a merchant banker in Los Angeles.

Deals Close to Completion

According to two sources who have dealt with the company, the new directors reportedly were close to completing several transactions that would have resulted in the sale of the company’s assets. The status of those deals in light of Silberman’s arrest Friday by the FBI is not known.

Aiello and Wood could not be reached for comment Thursday. Werner referred all inquiries to Los Angeles attorney Marshall Mintz, who was retained by Yuba Natural Resources after Silberman’s arrest. Mintz declined to comment.

In a statement Thursday, the company said it was not involved in any of the alleged transactions involving Silberman and announced that the three new directors, Aiello, Werner and Wood, would serve on a special audit committee to review the transactions.

There is no indication that any of the three new directors was aware of Silberman’s alleged relationship with drug dealers. Nor is it clear that the directors knew the depth of the financial problems besetting the company, which attempts to mine gold, aggregate, gravel and silica on 9,900 acres along the Yuba River, about 45 miles north of Sacramento.

Land Mined for Gold

The land is mined for gold by a partnership known as Yuba Placer Gold, which is jointly owned by Yuba Natural Resources and by Denver-based Bond International Gold, a unit of Australian magnate Alan Bond’s financial empire. (In a statement Thursday, Bond International said that “with respect to the allegations involving Mr. Silberman . . . no allegations of any kind have been made in any way seeking to connect Alan Bond or any Bond company with any alleged wrongdoings by Richard T. Silberman.”)

More than 4 million ounces of gold--including, Bond International said, 24,500 ounces in the 12 months ended June 30, 1988--have been extracted from the site since 1905 through a dredging process by which less than 0.01 of an ounce of gold is extracted from each cubic yard of ore dredged.

Yuba County public records and the company’s own public disclosures suggest that the property has been more a cash sinkhole than a mother lode. Yuba has lost millions under Silberman’s management, is virtually out of cash and is now embroiled in a variety of legal disputes with its neighbors, lenders, the federal government and the Yuba County tax collector.

Cited for Mineral Trespass

Last year, Yuba Natural Resources was cited for mineral trespass by the U. S. Department of the Interior’s Bureau of Land Management for mining 120 acres that belong to the government. Yuba agreed to pay the government $515,000 over five years, but, on April 1 of this year, it missed the first $130,000 installment, said Dean Swickard, the bureau’s area manager in Folsom.

“They welched on the first payment,” Swickard said. “I told (Yuba President) Peter Jensen on April 7 that they would have to pay up soon, or we’d have to take stronger steps.” Swickard declined to say what those steps might be but asserted that the department has the power to make arrests and to close all mining on the property.

The company also is in default on two loans secured by trust deeds on the property. Yuba missed a $12,722 payment to Western United Life Assurance Co. in October and a $20,345 payment to William Harvey in November, according to court records. Both have initiated foreclosure proceedings.

Yuba was sued on April 10 for $1.8 million in Yuba County Superior Court by a Sacramento company called U. S. Machinery, which leased Yuba silica mining and processing equipment in 1982. U. S. Machinery President Herbert Caplan said its equipment lease with Yuba expired in September, 1987, at which time Yuba was supposed to have returned the equipment or purchased it. Yuba has done neither, and U.S. Machinery is asking for $1.5 million in punitive damages and $300,000 in monetary damages, according to the company’s lawsuit.

In the suit, U. S. Machinery accuses Yuba of knowingly selling its equipment to a third party. “It’s like someone taking your car and turning around and selling it,” Caplan said in an interview.

Yuba is also delinquent on $12,000 in property taxes due in December, 1988, according to records on file at the Yuba County courthouse in Marysville, and has been sued by three neighbors who claim that they have been denied legal easements to the property, including the use of a road and the river for livestock watering.

Yuba Natural Resources lost a total of $6.5 million during the four fiscal years from 1984 through 1987 and would have lost money in 1988 had it not been for a $5-million sale of land and mineral rights, according to the company’s public financial reports. For the first nine months of the current fiscal year, Yuba is running a $2.6-million deficit.

As of Dec. 31, the company had $10.7 million in current liabilities but only $424,827 in assets, including just $95,000 in cash, calling into question Yuba’s ability to pay its bills. Yuba was due to pay off a $5-million loan to Bank of America on April 3.

As for Silberman’s personal holdings, he and Golding have disposed of most of their real estate over the last three years, according to financial disclosure statements filed by Golding. However, the broad dollar categories used on those reports--such as $10,001-$100,000--make it difficult to determine the precise value of those transactions.

In 1986, the couple sold a 3-year-old interest in a Sacramento property for more than $100,000, as well as a trust deed on a Hillcrest property, acquired in 1984, for less than $10,000, Golding’s reports show.

The following year, they sold their equity in another Hillcrest property, which Silberman had owned since 1976, for more than $100,000. Last year, they sold property on Juan and Mason streets in Old Town, again for more than $100,000.

As a result of the four transactions since 1986, the couple’s La Jolla home apparently is their only remaining property.

Few Knew Situation

But, if Silberman was experiencing financial difficulty, few in San Diego business or political circles were aware of it. Until his arrest last Friday, most people had no reason to question the “millionaire businessman” description that usually preceded Silberman’s name in newspaper stories. Even a newspaper columnist’s report in November that Silberman had reneged on a $100,000 pledge to Democratic presidential nominee Michael Dukakis raised few eyebrows.

“Like everyone else, I figured he probably had $20 million or so stashed in the bank,” said one politically prominent lawyer. “If anyone had suggested Dick Silberman had financial trouble, I and a lot of others would have said we’d love to have that kind of trouble.”

Golding could not be reached for comment Thursday.

Times staff writers Barry M. Horstman, Jenifer Warren and Ralph Frammolino contributed to this story.