Racketeering Suit Dismissed; Named Bank, 16 Defendants

A federal judge has dismissed a civil racketeering suit against the Bank of San Pedro and 16 other defendants that alleged they conspired to bankrupt a local businessman who was trying to market a pollution-reducing fuel additive.

Steven Richman, the bank’s attorney, said the decision handed down Monday by U.S. District Court Judge William Rea clears the bank and prohibits any rehearing in federal court for the other defendants.

Richman said the bank was named in the suit only because one of the defendants was a director. “There were no allegations of wrongdoing against the bank,” he said.

The suit, filed in February, alleged that James Birakos, former media liaison for the South Coast Air Quality Management District; Steven Podesta, a former Bank of San Pedro director, and others waged a three-year campaign of questionable business tactics, including check forgery and the use of spies to infiltrate a business owned by Richard Skaggs of San Pedro.

The judge granted the bank’s motion to dismiss the case, saying that there was no issue of fact involving the bank that could be decided at trial. But the ruling did not address factual issues involving other defendants and does not bar a suit in a state court against them on the same issues.

Skaggs’ attorney, Raymond Mulligan of Irvine, did not contest the bank’s motion and said he plans to refile the case against all defendants except the bank in a state court in several weeks. “We feel we would have a cleaner and better shot at prevailing by pursuing a state action,” he said.

He added that the federal case had been hurt when two witnesses who had been expected to bolster the racketeering claims decided not to testify.

Birakos said Thursday that he intends to bring a defamation suit against Skaggs because of the lawsuit. “It was a cheap publicity stunt and nothing beyond that,” he said. “It is absolutely unbearable and unethical, and we are preparing litigation to right this awful deed.”

The dispute stems from Skaggs’ efforts to market and distribute a fuel additive intended to reduce pollution. In 1987 he formed a company called Renergy International Inc., which Birakos still heads.

Renergy was financed by Podesta, a major shareholder, with a $75,000 loan from the bank.

Skaggs alleged that he was forced out of Renergy by the defendants and that when he tried to market the fuel additive under the name of his own company, Omstar Products, his former partners interfered, forcing Omstar into bankruptcy last year.

The suit also alleged that Birakos forged Skaggs’ signature on a $3,000 check made out to Birakos and that Podesta ordered a teller at the Bank of San Pedro to cash it.

Birakos said there was no forgery and that Skaggs authorized him to sign the check.

Once the two sides became competitors, the suit alleged, Birakos, Podesta and others affiliated with Renergy sent spies pretending to be potential customers to Omstar offices.

Birakos said it was Skaggs who engaged in such tactics, once posing as a Renergy employee and instructing the post office to send Renergy mail to Omstar.

Richman, attorney for the bank, said he had filed a motion for summary judgment and that Skaggs decided not to contest it.