THOUSAND OAKS : Bank Fraud Figure Gets 4-Year Sentence

A Riverside businessman involved in what officials have called the biggest bank fraud scheme in Ventura County history was sentenced Monday to four years in a federal prison and fined $50,000.

Walter Vladovich, the central figure in a scheme in which $4 million in loans from Westlake Thrift and Loan was channeled into a Riverside company, Leader Video, will be eligible for parole in about a year, Assistant U.S. Atty. David C. Scheper said.

According to federal sources, the FBI’s two-year investigation into the Vladovich case and into the demise of Westlake Thrift has turned to the thrift’s now defunct parent company, United Community Bank of Thousand Oaks, which the state closed in December because of a lack of funds.

Targets of the FBI’s probe into possible bank fraud include United Community’s former chairman, Phil Chase of Thousand Oaks, and board member Olen B. Phillips of Westlake Village. Phillips, an airline pilot, is also being investigated by state and Ventura County officials for alleged fraud in real estate transactions.

In March, Vladovich, who set out in the mid-1980s to build the largest chain of video stores in the nation, pleaded guilty to nine counts of conspiracy, unlawful payment of bribes and bank fraud in connection with the Westlake scheme. He could have faced up to 45 years in prison and $2.25 million in fines.

According to federal sources, Vladovich and members of his sales staff processed more than 800 phony loans that were eventually funneled into his would-be video empire. The loan packages were submitted to the thrift on behalf of people who supposedly were trying to open video rental businesses.

One source told The Times that initially, Vladovich tried to recruit people to apply for the loans, including California Highway Patrol officers. But the patrol officers asked too many questions, the source said, and many of the loans eventually went to fictitious people.

Steven Smith, the former president of the defunct thrift, was sentenced in April to two years in a federal prison and fined $20,000 for his role in the scheme.

According to Scheper, Smith became involved in early 1987 when he discovered the thrift had already approved more than $2 million in bogus loans to Vladovich.

Instead of “blowing the whistle” on the scheme, Scheper said, Smith went along with Vladovich’s plan and approved another $2 million in phony loans, apparently in the hope that a successful Vladovich would eventually repay the bank. Instead, the scheme contributed to the thrift’s failure.