Letter Revokes Texan’s Control of Parker Firm : Accusations: Newport businessman, himself under indictment, says he was not informed of fraud allegations against the man who took over his company after making it a loan of $3 million.

Michael E. Parker, a Newport Beach businessman charged with defrauding a Beverly Hills thrift, is trying to regain control of Parker Automotive Corp. from a Texas businessman who has been accused of defrauding Federal Express of millions of dollars.

Parker was arrested Feb. 27 after a federal indictment charged that he defrauded Columbia Savings & Loan of $11 million and bribed a thrift executive with $1.5 million to look the other way. Prosecutors said it was one of Southern California’s largest cases of thrift industry fraud.

Parker, 43, had been held without bail as a flight risk until Friday, when a federal judge released him on a $1-million bond guaranteed by Parker’s family.

The same day, Parker’s lawyer sent a letter to Texan Connie C. Armstrong Jr. revoking an agreement giving Armstrong control of Parker Automotive, a small manufacturer of engine-cleaning devices.

The flamboyant Armstrong, 36, agreed in February to bail out the troubled company with a $3-million loan that can be converted to stock.

George C. Rudolph, the Parker lawyer, said in his letter that during negotiations over the loan Armstrong had not disclosed the troubles that beset a San Francisco firm he owns, Hamilton Taft & Co.

Armstrong and Hamilton Taft have been sued by client Federal Express, which alleges that the firm diverted millions of dollars to Armstrong instead of sending it to the government for payment of Federal Express employees’ withholding taxes. Among the tax processing firm’s other clients were Sony Corp., Stanford University and the State Bar of California.

The lawsuit was the subject of a front-page Wall Street Journal article earlier this month.

In the letter to Armstrong, Rudolph also alleged that payments to Parker toward a promised $275,000-a-year consulting fee were stopped even before Parker went to jail. Nor, Rudolph said, had Parker been reimbursed for $83,000 in expenses he had incurred.

The letter also contended that Armstrong had been running the company into the ground since taking control Feb. 11 after a messy and apparently acrimonious negotiation.

As part of the agreement, Parker signed over voting control of his majority of stock in the company to Armstrong. Armstrong had Parker over a barrel during the negotiations, Rudolph said, because the struggling company desperately needed cash to stay alive. And as an officer and director known to be under FBI and Internal Revenue Service investigation, Parker was bringing unwelcome publicity to the company.

The letter, received yesterday by Parker Automotive, was Parker’s formal announcement that he was revoking the agreement with Armstrong. Rudolph said Parker would probably vote in a new board of directors to replace Armstrong’s directors. (Parker himself is barred from directly controlling any of the company’s finances by a federal bankruptcy judge’s order.)

Neither Armstrong nor his lawyer in Dallas returned phone calls.

Parker Automotive said it is caught in the middle and regrets that the fight between Parker and Armstrong has spilled into the open.

“This sort of stuff ought to be discussed between Parker and Armstrong and not aired in the press,” said Sheldon Chernove, a lawyer for Parker Automotive. “It only makes it more difficult to do our job at the company. And it doesn’t do the company any good with its customers.”

The health of the company is of concern to more people than just Parker as majority stockholder and the handful of investors who own its thinly traded public shares. Creditors of another Parker company now in bankruptcy, Parker North American Corp., have asserted a claim to the stock as repayment for several million dollars that they allege Parker owes them.