Couple Accused of $30-Million Fraud Plead Not Guilty

A Lancaster couple accused of bilking about 5,000 investors, many of them San Fernando Valley schoolteachers, out of as much as $30 million pleaded not guilty Monday to charges of grand theft, forgery and securities violations.

David and Karen Missman, owners of Missman-Kaplan Associates Ltd.--a bankrupt real estate investment company in the Valley--turned themselves in to court authorities for their arraignment Monday afternoon in Los Angeles Superior Court.

Judge David Milton set a preliminary trial date of Dec. 12 for the couple, who face a 118-count criminal complaint filed last week. The Missmans were released on $25,000 bail.

The couple and their attorney, Michael Nasatir refused to comment on the charges.

The Missmans are accused of working a “Ponzi” scheme since 1979 by offering a high rate of return on investments in two companies they owned, MKA Ltd. and S.C.S. Co., then using monies from new investors to pay off earlier ones.

Many of the investors were schoolteachers in the Valley, Deputy Dist. Atty. Robert Youngdahl said. Much of the business was generated through endorsements by satisfied investors who told friends and colleagues that dealings with the companies had proven to be prudent, he said. The Missmans also used former teachers as sales representatives or company officers.

One of them, Henry Springer, a former president of United Teachers-Los Angeles, provided authorities with sworn statements alleging that the Missmans used investor funds for extensive travel and to purchase a $1.3-million Chatsworth house, a Rolls-Royce, a Maserati and a Ferrari, investigators said. No charges have been filed against any employees of the Missmans, Youngdahl said.

Because the couple’s companies were forced by creditors into involuntary bankruptcy proceedings earlier this year, most of the recovered assests will go to creditors, Youngdahl said. Although the loss suffered by investors may reach $30 million, only $300,000 of the couple’s assets will be left to distribute among the victims, the prosecutor said.