Gambling Debts and Legal Dispute Triggered Audit by Trustees : Finances: James (Tom) Ely’s assurances of economic well-being conflicted with statements made to a casino manager and a lawsuit seeking repayment.

The filing of charges Tuesday against James (Tom) Ely and his wife, Ingrid, culminate five months of controversy surrounding the 54-year-old trustee of the Ventura County Community College District.

Ely, an elected trustee since 1979, was charged with eight counts of embezzlement, 19 counts of making a false or fraudulent claim and two counts of conspiracy to commit grand theft. Ingrid Ely was charged with two counts of conspiracy to commit grand theft.

All along, Ely and his wife have maintained that they did nothing wrong. Ely has attacked The Times and other publications for printing “slanted” articles.

The trustee’s troubles came to light in March, when The Times quoted Nevada law enforcement officials who said that Ely owed $3,000 to the Edgewater Hotel and Casino in Laughlin, Nev., and that he had been sued the previous month by the Golden Nugget in Las Vegas. The suit claimed that Ely owed the Las Vegas casino more than $8,000 in gambling debts.

Ely, a retired insurance salesman who earns $400 a month as a trustee, at first denied having gambling debts or a gambling problem, saying he had paid the debt to the Laughlin casino in June, 1989. But Nevada police said that Ely did not pay the debt until after it was publicized in March, and that he paid only after being threatened with arrest.

Ely later acknowledged that he owed the Golden Nugget money for outstanding gambling debts. He said he was involved in a legal dispute over the amount he owed.

In light of the gambling allegations, and Ely’s admitted use of his district telephone to call Nevada casinos, the Board of Trustees voted March 17 to commission an audit of Ely’s travel expenses.

The audit found that in the previous three years, Ely had charged the district $8,400 in expenses that the auditors considered questionable.

Some of the expenses were for trips to community college conventions in Sacramento, Florida, Kentucky and Washington.

Nearly half of the expenses were for a car rented at district expense for Ely to use after his own vehicle was damaged in a collision in January, 1989. Ely said that the accident occurred while he was conducting district business and that officials of Moorpark College--one of the district’s three schools--offered to supply him with a car during the six months his car was being repaired.

The audit listed another $6,978 in claims submitted without proper documentation during the same three-year period. After receiving a copy of the audit, the district attorney’s office began its criminal investigation of Ely.

Ely denied owing the district any money, saying that the audit was flawed and that he had not violated district travel policy.

Moreover, Ely said the district owed him $600 for business-related calls that he had made from his home and car phone in the past three years.

Ely has denied having a gambling problem, but a Nevada law enforcement official told The Times that Ely had incurred a total of $40,000 in gambling debts at a number of Nevada casinos, including the obligations to the Golden Nugget and the Edgewater.

Ely denied having the debts, saying that he owed less than $20,000 in gambling obligations and that he was more than able to repay the money.

In addition to their Simi Valley house, Ely said, he and his wife, Ingrid, owned a half interest in a condominium in Hawaii and in late 1989 purchased a new Cadillac.

But Ely’s assurances about his economic well-being contrasted sharply with statements he made in legal documents and in letters addressed to Milton Frank, casino manager at the Golden Nugget.

In a letter dated Nov. 1, 1989, Ely wrote that he and his wife had both suffered back injuries in the January, 1989, car accident. He said he had paid more than $40,000 in medical expenses and damages because his insurance company refused to pay. As a result, “we have fallen behind in our obligations, in spite of doing all possible to simply meet living expenses,” Ely wrote.

He stated that he planned to pay the Golden Nugget with money he expected to receive from the insurance company.

In a letter dated July 31, 1989, Ely apologized to Frank for not being able to meet with him to discuss his gambling debts because of his wife’s back surgery. The letter also indicated that Ely was a frequent visitor to Las Vegas.

“I had planned on a trip to your casino, as is my monthly custom, on the last weekend,” Ely wrote. “My wife was rushed into emergency back surgery . . . and the trip was obviously impossible.”

Ely again referred to his financial troubles in the formal answer he filed April 3 to the Golden Nugget’s court complaint.

“The defendant prays that the court take judicial notice of the fact the defendant is indigent . . .” Ely wrote.

In the same document, Ely asserted that he went to the Golden Nugget to settle his debts but instead the casino lured him into more gambling. He said he was under heavy medication for injuries he suffered in the car accident.

“The plaintiffs,” Ely’s statement said, “induced the defendant to stay at their establishment by providing complimentary room, meals and large volumes of alcoholic beverages . . . causing, due to the medical condition, the defendant to be confronted with gaming at a time when the plaintiffs knew, or should have known, of the defendant’s mental state of mind and inability . . . to reasonably exercise good judgment.”

Ely said later that the letters he wrote to Frank accurately reflected his financial condition at the time they were written, but that he was no longer in financial trouble.

In mid-April, it was disclosed that the Elys were being sued by Simi Valley Bank for $17,500 in outstanding debts, which included unpaid credit card bills and personal loans. A judge later ordered Ely to repay the bank.

Ely admitted that he owed the bank money and had been unable to repay it because of the accident. “There is not anything that anybody can look at and say we’re morally corrupt because we’re suffering from economic hardship,” he said.

Ingrid Ely was drawn into the controversy on April 26, when the district attorney’s office announced that it was investigating whether she had charged the Moorpark College Alumni Assn. for trips that her husband also had charged to the district.

According to college district records, Ingrid Ely, president of the alumni association, charged about $2,100 to the organization’s account for trips that she took with her husband to community college conventions in 1988 and 1989. In February, she charged the alumni association $975 for a trip she took to a convention in Canada.

Ingrid Ely said her travel expenses were legitimate and had been approved by Moorpark College officials. She said most of the alumni association’s money came from membership dues, not public funds.

In June, Ely finished last in a field of five candidates vying for a county supervisor seat. He also became the subject of a recall campaign by a Simi Valley citizens group that wanted to remove him from his trustee post.

Members of Citizens to Recall James (Tom) Ely accused him of “fiscal irresponsibility and unprofessional conduct.” Trustee Greg Cole joined in the call for Ely’s resignation.

Vivienne Lewis, treasurer of the citizens group, said in a recent interview that it had collected about half of the 9,901 signatures of registered voters in the 4th District needed to force a recall election. The district includes Simi Valley, Moorpark and Somis.

The group has until Oct. 25 to gather the necessary signatures, county election officials said. If the group is successful, the Board of Trustees will be required to call a special election in the spring.