Bail Is Denied for S&L; Fraud Suspect Michael E. Parker

A federal judge here denied bail Wednesday to Michael E. Parker because the Newport Beach businessman indicted last week on charges of defrauding Columbia Savings & Loan is considered a flight risk.

U.S. District Judge Robert M. Takasugi declined to release Parker, former president of Parker North America Corp., from jail after hearing testimony from several former employees about alleged plans that the executive had made to flee abroad.

Tom Holliday, Parker’s attorney, said he was “disappointed in the court’s ruling, and we look forward to trying this matter.” Trial is scheduled for April 23.

Parker, 43, pleaded not guilty Monday to 46 counts of racketeering, money-laundering, paying and receiving kickbacks, bank and tax fraud, and tax evasion.

Prosecutors allege that Parker, PNA’s former president, sold $166 million in equipment-leasing deals to Columbia, even though many of the leases were phony or inflated. Columbia, which was seeking tax shelters, paid $31 million to PNA between 1983 and 1987. Parker, 43, is suspected of misappropriating more than $11 million of that.

He allegedly paid more than $1.5 million in kickbacks to Columbia’s former director of financial planning, Jeffrey S. Worthy. Free on $200,000 bond, Worthy allegedly recommended approval of the lease transactions in exchange for bribes from April, 1985, to 1987.

Worthy, 33, of Downey, also has pleaded not guilty to the charges.

On Wednesday, the former chief financial officer of another company that Parker founded--Parker Automotive Corp. in Costa Mesa--testified that Parker said last summer that he was interested in starting some companies overseas because he might have to leave the country.

Eric McAfee quoted Parker as saying that a prison sentence of more than five years “was an unacceptable term, and it was much more attractive to go somewhere else and have enough money to live there.”

McAfee testified that Parker had mentioned some interest in obtaining an Irish passport and said that he had invested in jewelry and art because they were easily exchanged for cash without being traceable. Parker also mentioned trying to build a “pile of cash (in Europe) he could use in the event he got into trouble.”

McAfee added, however, that Parker had said 40 or 50 times subsequently that he intended to remain in the United States and fight the charges against him.

McAfee and former PNA president Bryan Bonas testified that either Parker or his wife, Cindy, had threatened them. Bonas said he was so concerned that he moved his family.

But Judge Takasugi said he didn’t think either threat was serious. “The court is not impressed with what were characterized as threats,” Takasugi said.