Board Tells Investors It Can’t Stop Auction : Olen B. Phillips: Attorneys say the alleged victims of a fraud scheme will declare bankruptcy to block the sale of the Moorpark parcel.

Ventura County officials moved forward Tuesday with plans to auction off almost 400 acres of land in Moorpark to collect overdue property taxes, despite appeals from investors in an alleged fraud described as the largest in county history.

About a dozen investors asked the Board of Supervisors to delay an auction of the property, saying their best hope of recovering some of their losses would be private sale of the land.

The supervisors said, however, that they have no power to halt the auction Monday of 393 acres of undeveloped land in Moorpark. The land will be sold to pay off $77,500 in property taxes owed to the county over the past five years, county officials said. Officials added that they could sell the property by parcels until the taxes are collected.

A lawyer for the investors countered that he had no other choice but to file for bankruptcy on behalf of the investors this week to block the auction.

The investors are among about 2,000 people who stand to lose as much as $30 million in a series of alleged fraud schemes headed by Olen B. Phillips, according to the Ventura County district attorney’s office.

Investors were told that their money would be used for construction on some of the properties, but it was actually used to pay interest to other investors and to cover company expenses, prosecutors said.

Phillips and two aides were indicted by a grand jury last month for conspiracy to commit grand theft and securities fraud, officials said. The 81-count indictment accuses the three men of bilking 21 people out of more than $3 million, authorities said.

Their arraignment awaits resolution of a legal issue involving the right to a preliminary hearing.

Supervisor Maggie Erickson Kildee said she sympathizes with the alleged victims but said the board could do nothing to stop the land auction.

“We don’t have the legal authority to override the tax collector,” she said. “I’m sorry that we can’t answer your plea this morning.”

Lois Trzciak, a Newbury Park resident, said she and her husband may lose their life savings in the investment scheme. “Our financial future is dependent on your action,” she said.

Another investor, Barbara Holmes of Thousand Oaks, said she is among many people who were duped by the scheme.

“I’m just asking right now that this property not be sold in a tax sale,” she said.

Doctors, pilots, attorneys, teachers, churches, police officers and even FBI agents invested thousands of dollars in Phillips’ programs, according to authorities.

The Moorpark property near Grimes Canyon Road and Broadway is among about 20 commercial and residential properties in Ventura and Los Angeles counties that were turned over to a court-appointed receiver, who has taken charge of Phillips’ business interests.

Most of the other properties either have been sold to recover some of the lost investments or are in bankruptcy already, said Richard Weissman, the court-appointed lawyer assigned to oversee the properties.

The undeveloped Moorpark land, which is zoned for residential development, is worth about $7 million, according to Rick Principe, a former partner in Phillips’ company, the Phillips Financial Group.

However, if the land is sold at auction, the county could accept a minimum bid equal to 25% of the property’s total value, or $1.75 million, according to county Tax Collector and Treasurer Harold Pittman.

“My assumption is that the land would go for much less than market value,” he said.

After the county collects the overdue property taxes from the sale of the land, it is up to Weissman to divide the remaining assets among the investors, Pittman said.

He said he also sympathizes with the investors, but is prohibited from delaying the auction any longer. He said he has already put off the auction 40 days.

“I do feel for these people,” Pittman said.

Weissman said that by filing for bankruptcy on behalf of the investors, he can halt the auction. However, it would then be up to a bankruptcy judge to decide how to repay investors for their lost investments.

“Who knows what will happen?” he said.

Weissman had asked the Board of Supervisors to give the investors at least 100 days to sell the property. He said he had already received two offers for the land but needed more time to complete the deals.