Couple Plead Innocent in Alleged Investment Scam

A Lancaster couple accused of bilking about 5,000 investors out of as much as $30 million pleaded innocent Monday to grand theft, forgery and securities violations.

David and Karen Missman, owners of Missman-Kaplan Associates Ltd., a bankrupt real estate investment company in the San Fernando Valley, turned themselves in to authorities for arraignment Monday.

Los Angeles Superior Court Judge David Milton set a preliminary hearing date of Dec. 12 for the couple, who face a 118-count criminal complaint. The couple were released on $25,000 bail.

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

Many of the investors were schoolteachers, 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 home and expensive cars, investigators said.

Because the couple’s companies were forced by creditors into involuntary bankruptcy proceedings, 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 for the victims, he said.