Parker Stock Trading Suspended After FBI Posts Guards at Firm
The National Assn. of Securities Dealers on Tuesday suspended trading in the stock of Costa Mesa’s Parker Automotive Corp., a day after FBI agents posted armed guards at the company’s doors and pored over its financial records.
Officials halted over-the-counter trading in the company’s stock at 9:34 a.m. pending a news announcement. However, the company issued no announcement and officials did not return phone calls. The stock was trading at $7.75 when trading was suspended, unchanged for the day.
The FBI agents were accompanied by accountants and lawyers armed with a federal court order and representing creditors of Parker North America Corp. Both Parker Automotive and a leasing firm, PNA, were founded by Michael E. Parker.
The creditors contend in court filings that they were defrauded by PNA and Parker. They recently alleged in court documents that Parker took money from the now bankrupt PNA and improperly funneled it into Parker Automotive.
Parker, a high-living Newport Beach resident, is under investigation by the FBI and Internal Revenue Service. A civil lawsuit filed earlier this year by Columbia Savings & Loan alleged that Parker defrauded it of $13 million and paid kickbacks to a thrift official.
Parker did not return phone calls Monday or Tuesday, but previously denied any wrongdoing.
PNA, which filed for Chapter 11 bankruptcy in March, 1989, raised money from investors to buy banking equipment and then leased it to financial institutions. A bankruptcy court examiner recently found that money given PNA to invest wound up in the personal bank accounts of Parker, members of his family, his business associates and at an imported car dealership and a Lake Tahoe area casino.
PNA made up fake investment deals to mislead the company’s biggest investor, Columbia Savings, the troubled Beverly Hills thrift, the examiner said in an official report to the U.S. Bankruptcy Court.
Up to this point, the legal problems of PNA and Parker have not been linked directly to Parker Automotive, which makes equipment for cleaning auto engines and recently completed a $5.3-million private stock offering.
But the publicly traded Parker Automotive says in public documents that it borrowed $800,000 from PNA that has not been repaid and got another $130,000 worth of free services each year.
Timothy L. Strader, president and chief operating officer of Parker Automotive, did not return several calls. He took over those jobs from Parker in September after The Times revealed in August that Parker was under FBI investigation.
FBI officials declined comment.
Parker Automotive’s plush offices in a Costa Mesa industrial park buzzed Monday as lawyers and accountants for the creditors scuttled in and out and armed guards talked to each other on walkie-talkies.
Some of the creditors are financial institutions that say they were never paid after agreeing to sell banking equipment to PNA and then lease it back. The creditors recently asked a bankruptcy court judge for permission to sue Parker, Parker Automotive, Parker’s wife, ex-wife and father. The bankruptcy examiner found that those people and more got millions of dollars from Columbia Savings that PNA was supposed to have invested in bank equipment.
In their request, filed in bankruptcy court in Santa Ana, the creditors said they needed to move quickly because Columbia Savings had already filed suit earlier this year to recover the money it says Parker embezzled. They were defrauded too, say the creditors in court papers, and Columbia Savings’ claim shouldn’t have precedence over theirs.
They also need to move quickly, the creditors said, because Parker was allegedly “dissipating and squandering” his money on “maintaining an exorbitant and extravagant lifestyle.”
Parker is a flamboyant entrepreneur who spent lavishly on imported cars, a stylish Newport Beach home and political contributions to the Republican Party.
