Dealer Indicted in Sale of Stolen Warner Cartoon Cels : Animation: Artwork of Bugs Bunny, Daffy Duck and other characters was stolen from studio storage in 1988 and later turned up in shops.

A Studio City man has been indicted for allegedly selling cartoon cels--paintings of Bugs Bunny, Daffy Duck and other characters used in cartoon production--that were reported stolen from Warner Bros. and ended up in the hands of dealers across the country, authorities said Wednesday.

Billy W. Carmen, 31, faces three counts of interstate transportation of stolen property and could face a maximum of 30 years in prison and $750,000 in fines if convicted, according to the federal indictment handed down Tuesday in U.S. District Court in Los Angeles.

Assistant U.S. Atty. Melinda Haag said Carmen, a dealer, sold cartoon cels that had come from a cache of “tens of thousands” of cels worth more than $1 million that disappeared from a Warner Bros. storage office in Burbank in 1988.

Most of the cels have not been recovered, but Burbank police and federal investigators found several in the hands of dealers in New York, Virginia and Los Angeles, Haag said.

“We asked them where they got them and they said Mr. Carmen,” Haag said.

Carmen is well known among Los Angeles animated-art collectors and dealers through his Toluca Lake company, Anima’Zing Source. He denied stealing the cels Wednesday, saying that he found them in a trash dumpster outside the office building where Warner Bros. stored them.

Carmen declined further comment and his attorney, John D. Vandevelde, refused to discuss the specific charges because he had not seen the indictment.

“Mr. Carmen has been in this business a long time and has not had problems of this sort before,” Vandevelde said. “He will vigorously defend himself.”

Federal authorities said the wide scope of the theft investigation leading to Carmen’s indictment is believed to be a first in the area of cartoon cels.

The one-dimensional, brightly colored paintings on acetate were largely considered valueless for much of the 80-year history of animation. But increasing numbers of collectors of animated art have created a market for cels--so-called because in the early days of animation they were made on celluloid.

Haag declined to discuss how Carmen allegedly came into possession of the stolen cels. She said that in 1988 he operated a business called The Toluca Lake Chocolate Factory in the same building where Warner Bros. had its storage facility, in the 3600 block of West Olive Street.

Carmen moved his business out of the building in April, 1988, at the same time Warner Bros. officials discovered that tens of thousands of cels were missing from storage boxes, Haag said. Warner officials checked their inventory after Burbank police received an anonymous letter about the thefts.

On Feb. 24 1989, investigators searched the homes of Carmen and an associate and seized more than 1,000 Warner Bros. cels--featuring such characters as Bugs Bunny, Foghorn Leghorn, Yosemite Sam and Daffy Duck.

Under Tuesday’s indictment, Carmen remains free but must appear for arraignment in federal court on Oct. 1, Haag said.

In 1989, Carmen and his attorney told The Times that he was being investigated because the increased value and interest in animation cels had led producers of the artwork to reconsider past decisions not to keep them.

In an interview, Carmen said: “It’s really strange how they want to start screaming something’s stolen. If digging something out of a garbage dumpster is stealing, then, hell, I’m guilty.”