Man Pleads Guilty to $1.3-Million Embezzlement : Crimes: The owner of a financial services firm admits operating a bogus tax shelter operation. He faces up to nine years in prison.

A Newbury Park financial consultant pleaded guilty Friday to embezzling more than $1.3 million from customers who invested money in a bogus tax shelter program he operated as part of his business.

Harry Allan Saunders, owner of Allan Saunders Financial Services, pleaded guilty to seven counts of felony grand theft by embezzlement during his arraignment hearing in Ventura County Municipal Court, Deputy Dist. Atty. Charles R. Roberts Sr. said.

The 45-year-old Simi Valley resident, who is free on $5,000 bail, was ordered to appear in Ventura County Superior Court on April 19 for sentencing. Saunders faces a maximum sentence of nine years in prison.

His attorney, Russell Nadel, said Saunders “regrets very deeply the harm he has caused his victims and his family. He hopes and prays that he will be able to make restitution to all of his victims. That is his goal in life.”

Saunders admitted his crimes to investigators with the district attorney’s office in October. But Roberts said no charges could be filed until he could provide the necessary evidence to prove Saunders’ guilt.

Roberts said Saunders decided to come forward because he had received pressure from an investor to return her money.

Between June 4, 1981, and last October, Saunders collected $2 million from clients who had invested in phony long-term tax shelter programs, Roberts said.

During the time he operated the scheme, the prosecutor said, Saunders provided clients with bogus written reports on the status of their investments, which ranged from $20,000 to $645,000.

Occasionally, Roberts said, investors would receive what Saunders said represented a return on their investments.

Roberts estimated the total loss to investors at more than $1.3 million.

Nadel said his client had used all the money on “poor business practices,” but did not elaborate.

“No, he hasn’t been living lavishly, and no he doesn’t have a Swiss bank account,” the attorney said.

Some of Saunders’ victims said he had prepared their tax returns for years and that is why they had trusted him with their money.

“I never got suspicious,” Thousand Oaks resident Gerry Smyth, who lost $50,000 in a Saunders’ investment scheme, said in an interview earlier this week. “Live and learn, I guess.”

Smyth, along with six other victims defrauded by Saunders, said he learned of his predicament in November when he received a letter from Saunders stating that he had admitted to authorities that he had embezzled money from clients.

Nadel said Saunders will continue to operate his tax return business that he runs out of his Newbury Park office until his sentencing. Saunders’ tax return business is separate from his financial consulting business.

“In one way, I’d like to see him go out of business, and in another way I’d like to see him stay in business so I can get my money back,” Smyth said.

Nadel said his client plans to use some of the money he will make during the next few weeks to pay back his victims.