Bank Fraud Inquiry May Block Project : Moorpark: Officials want proof that a developer can buy land owned by a financier whose assets have been seized by the state.

The investigation of an alleged bank fraud scheme involving financier Olen B. Phillips has endangered plans by a Westlake Village developer to build an exclusive housing project in Moorpark.

Moorpark City Council members have demanded that the developer, Paul Bollinger, provide legal proof that he will be able to buy two parcels from Phillips to build a 518-acre housing and recreational project in the northern part of the city.

But Bollinger’s right to purchase the land has been jeopardized by the seizure of Phillips’ assets, including his landholdings, while the courts determine who holds the deeds, a court-appointed attorney said Thursday.

“There’s danger that the deal could fall through” if the bank loan Bollinger has secured cannot be held until the legal disputes are settled, attorney Richard Weissman said.

Weissman, who was appointed to audit Phillips’ holdings, said “it will take time” to determine who has title to the land. Before the land was seized, Bollinger had planned to buy it for about $3 million, he said.

The assets of Phillips, a Thousand Oaks real estate financier, were seized last month by the state Department of Corporations in a criminal investigation that involved the defunct Westlake Thrift & Loan.

Among the 11 businesses and 48 limited partnerships and investment groups Phillips holds is West Oaks, the company that owns two parcels Bollinger hopes to buy.

Although Phillips has access to a bank account, he is barred from selling off his other assets. He and his attorneys are scheduled to appear in court May 11 to attempt to release all of the businessman’s holdings.

Moorpark officials say they want no part of the project while it is still the subject of a legal dispute.

One Moorpark city councilman said Thursday that Bollinger’s claim to the land “is precarious, at best.”

“It’s not his property, and before we continue to spend public tax money, council time and staff time, I think we ought to find out who owns the property and what the status is,” Councilman Scott Montgomery said.

Bollinger told City Council members Wednesday night that the property has not been taken over by the state and that he is close to buying it.

Asked repeatedly by council members if he had legal rights to the land, he replied, “The property is not encumbered.”

Bollinger has proposed building 101 houses on lots of two to five acres in a rural hillside area between Grimes and Walnut Canyon roads.

The project has been tied up by legal and planning concerns for two months. Bollinger’s original proposal to build 159 houses was rejected by the council in February.

The project would be the fanciest in the city. It would be behind gates and include a golf course, a tennis club and an equestrian center. The developer already has approval from the city to build 27 houses.

Legal questions aside, Moorpark officials said, they were concerned because access to the golf course and other recreational facilities would be open to non-residents only on payment of a fee.

“The so-called public benefit is not really there,” Councilwoman Eloise Brown said.

The council is to take up the proposal again on May 2.