$7-Million Investment Diverted, Examiner Says : Business: Bankruptcy court report says Parker North American Corp. turned funds from Columbia S&L; into cashier’s checks to Parker’s chairman, his family and his associates, among others.
A report filed Tuesday in U.S. Bankruptcy Court here concludes that more than $7 million that a Beverly Hills thrift gave Parker North American Corp. to invest ended up instead as cashier’s checks made out to former Chairman Michael E. Parker, his family and business associates, and to a Lake Tahoe casino and a Newport Beach auto dealership.
Columbia Savings & Loan Assn. of Beverly Hills gave the money to Parker North American to invest in equipment leasing deals. But the examiner’s report concludes that the thrift was misled by Parker North American into investing in fictitious deals.
Parker, 42, is a prominent Newport Beach businessman and was chairman of Parker North American until the day before it filed for bankruptcy in March, 1989. Parker North American leased equipment such as automated teller machines to banks and savings and loans.
Parker is now chairman of Parker Automotive Corp. in Costa Mesa, a publicly held manufacturer of engine-cleaning products.
Parker North American is the subject of several lawsuits alleging fraud and is also under investigation by the FBI and the Internal Revenue Service. The FBI has questioned Parker and at least one of his business associates.
Parker did not return phone calls Tuesday. In earlier interviews, however, he has denied any wrongdoing.
The bankruptcy examiner, accountant Robert Poyourow of Los Angeles, said Tuesday that his report stops short of concluding the Columbia money was transferred wrongfully to bank accounts outside Parker North American. It will take more research to determine if any wrongdoing occurred, he said.
A bankruptcy court hearing is scheduled Oct. 18 to discuss the report and determine whether the judge will ask Poyourow to continue the investigation.
Poyourow examined 10 leases involving 17 transactions between 1984 and 1988. The FBI has seized those and other documents, according to court records.
Of the 17 transactions, Poyourow’s report says, documents showed the value of 11 “were inflated” and the investments were worth less than Columbia was led to believe. Six of the transactions were “fictitious in that they did not exist or were never consummated” by Parker.
In two instances, Parker had leased different equipment from what it had told Columbia. And, in one case, the same investment had been sold not only to Columbia but to another investor as well, the report says.
Columbia was declared insolvent and new management installed by federal regulators this year for reasons unrelated to the Parker North American investments. The thrift invested $31 million with Parker North American, and now alleges in a suit in federal court in Los Angeles that the company stole at least $13 million of that amount.
Parker won’t comment directly on the suit. But he has suggested that Columbia, which is being sued by the federal government for allegedly squandering funds, is trying to shift blame for its own troubles onto him.
Almost $4 million of the Columbia money went to Parker from whoever took the Columbia checks to local banks and converted them to cashier’s checks. At least 11 of them were made out to Parker and dozens more checks were made out to other people, the report said.
Brian W. Fink of Orange, a former Parker North American vice president, got 11 checks totaling $850,000. Fink could not be reached for comment.
Ten checks totaling $1.4 million went to Jeffrey S. Worthy of Downey, the former Columbia vice president who oversaw the thrift’s investments in Parker North American. Worthy couldn’t be reached for comment, but he denied in an earlier interview that the payments were kickbacks from Parker to look the other way on the lease deals. Worthy said Parker paid him for business deals unrelated to Columbia.
The examiner’s report also found that:
* Gilbert Fuentes, Worthy’s former boss at Columbia as chief financial officer, got one check for $200,000 in 1986. Fuentes, who left Columbia in late 1985, could not be reached for comment.
* Harrah’s Tahoe casino in Lake Tahoe received a $100,000 cashier’s check in 1986 endorsed by Parker, the report says. Fink also signed over one of his $50,000 checks to the casino in 1985.
* William E. Parker of Irvine, Michael Parker’s father and a former employee of Parker North American, got two checks totaling $494,000 in 1985 and 1986.
* Cindy S. Juranek, Parker’s wife, received a check for $79,308 in 1986. Karen M. Parker, Parker’s ex-wife, got a $100,000 check in 1987 a few months after Michael Parker married Juranek. William and Karen Parker could not be reached.
* A check for $46,000 went to Beach Imports, a Newport Beach imported auto dealership, in 1985.
