Consultant Charged in Tax-Shelter Operation : Newbury Park: The D.A.’s investigators say the owner of a financial services firm embezzled more than $1.3 million from investors.

A Newbury Park financial consultant was charged Wednesday with embezzling more than $1.3 million from customers who invested in a bogus tax-shelter program that he allegedly operated for nine years.

Harry Allan Saunders was charged in Ventura County Municipal Court with seven counts of grand theft by embezzlement. Saunders turned himself in Tuesday, district attorney’s investigators said, after meeting with them to discuss their investigation of his business, Allan Saunders Financial Services.

The 45-year-old Simi Valley resident was released on $5,000 bail and is scheduled to be arraigned Friday in Municipal Court.

Saunders’ attorney, Russell Nadel, said Saunders, who was not present in Municipal Court, had no comment.

Saunders prepared tax returns and served as a financial adviser. He is suspected of collecting $2 million from clients who invested in phony long-term tax-shelter programs, Deputy Dist. Atty. Charles R. Roberts Sr. said. The felony complaint accuses Saunders of carrying out the scheme from June 4, 1981, to last Oct. 10.

Saunders provided customers with bogus written reports on the status of investments, which ranged from $20,000 to $645,000, Roberts said.

Occasionally, investors would receive what were alleged by Saunders to be returns on their investments, the prosecutor said.

Roberts, who estimated the total loss to investors at more than $1.3 million, refused to speculate on what happened to the money or on whether it could be recovered. He also declined to comment on how the district attorney’s office became aware of Saunders’ investment scheme, saying only that the office’s investigation began in October.

Thousand Oaks resident Gerry Smyth, 53, one of seven prosecution witnesses named in the complaint, said he invested $50,000 in 1989 in a tax-shelter plan offered by Saunders. Smyth said he trusted Saunders because he had been his accountant for 10 years.

Smyth said a friend, also a prosecution witness, had previously invested $50,000 in a tax-shelter plan with Saunders, and had received all of his money back, plus a 20% return on his investment.

“Based on that, I thought, ‘Gee, that’s a pretty good deal. That’s as good as gold,’ ” Smyth said.

So, Smyth said, he agreed to join in a property-partnership deal when Saunders approached him. He said he was told that his $50,000 investment would be combined with money from other investors and used to purchase property in Camarillo. He said the friend invested $250,000 in the same venture.

Smyth said Saunders had told him that a number of Ventura County judges, attorneys and even a prominent Oxnard developer had invested in the property partnership.

“I thought that was the best investment I ever made,” Smyth said. “I was really sucked in by it.”

Smyth said the only documentation that he received about the transaction was a letter from Saunders stating that his $50,000 had been invested in the partnership deal.

“It was stupid,” Smyth said. “I should have started questioning him right off the bat because there was no deed to sign. I didn’t have anything except a written letter from the man, which doesn’t mean anything. I trusted him because he was my tax accountant.”

Smyth said he found out about the alleged fraud in November when he received a letter from Saunders. In the letter, Saunders explained that he had told district attorney’s investigators that he had embezzled money from clients, Smyth said.

“He said he was really sorry and that he planned to spend the rest of his life paying us back,” Smyth said. “It just blew my mind that he would do that.”

Roberts said he could not comment on Smyth’s account of any letter from Saunders.

Smyth, who owns a janitorial company, said the $50,000 he lost “wasn’t my life savings, (but it) was a good chunk of my retirement.”

He said he doesn’t expect to get much, if any, of the money back. He said he considers himself fortunate that he did not invest more with Saunders.

If convicted on all seven counts of grand theft, Saunders could receive a maximum of nine years in prison, Roberts said.