‘2nd Chance’ for Levine Haunting Southland Pair

Southern California real estate developers Thomas Brechtel and Randy Jochim used to believe that everybody deserved a second chance--even convicted Wall Street inside trader Dennis B. Levine.

Now they’re having second thoughts.

The two men say they believed that Levine--whose arrest and conviction on insider trading charges five years ago led prosecutors to a series of even bigger convictions--could use his contacts in the financial world to help them build luxury homes on three oceanfront acres in Laguna Niguel.

Brechtel and Jochim paid the former Drexel Burnham Lambert Inc. executive $35,000 in fees but now contend that all he did was introduce them to a string of shady characters who never lent them any money.

One of the supposed financial sources was a man convicted of business fraud whom Levine had befriended while serving 17 months of a two-year federal prison term for securities fraud, tax evasion and perjury.

“A lot of people say, ‘Why would you trust Dennis Levine?’ ” Brechtel said. “We trusted him because we thought he deserved a second chance.”

Levine, who went to jail after making about $12 million in illegal profits, on Monday denied the accusations of wrongdoing.

“I think these allegations are totally without merit,” he said in a phone interview. “No guarantees were ever made regarding these financings, and that’s it.”

In a report broadcast Sunday on the CBS News program “60 Minutes,” Brechtel, 33, of Coto de Caza, and Jochim, 37, of Diamond Bar, accused Levine of carrying out an advance fee-loan scheme.

An advance fee-loan scheme is one in which people are promised a loan if they pay some money in advance. Once a down payment is made, subsequent loans usually don’t materialize.

Brechtel and Jochim have hired San Francisco attorney Marvin Belli to represent them.

“I’d like to go after these bums. It’ll make me happy,” Belli said in an interview Monday.

Early last year, Brechtel and Jochim--who say they have built custom homes in Diamond Bar and Walnut--became interested in developing property near the Ritz-Carlton Laguna Niguel hotel and the Links at Monarch Beach golf course. They planned to subdivide the property into seven plots and build luxury homes.

One of Levine’s cousins, who lived in Brechtel’s neighborhood, recommended Levine to the two men, according to Brechtel.

The “60 Minutes” report accused Levine of failing to tell Brechtel and Jochim that some of their purported lenders had links to fraudulent enterprises.

One Panama company used by Levine, “60 Minutes” said, is under investigation by the FBI. FBI officials could not be reached for comment.

Brechtel and Jochim paid Levine $10,000 for that referral.

Once the Panama deal fell through, Levine allegedly referred the developers to a Las Vegas man whom “60 Minutes” said was connected to the Mafia and who had been convicted of theft in a $700,000 credit card scam involving two Atlantic City, N.J., casinos.

Later, Levine introduced the two men to a Boca Raton, Fla., firm that promised to finance the Laguna Niguel home development.

Brechtel and Jochim said they paid Levine $25,000 to arrange the new financing. But one of the financiers turned out to be a man whom Levine had met in prison.

“Levine had told me he had met (the man) years ago when he was associated with Drexel,” Brechtel said. “ ’60 Minutes’ found out they met when they were in prison together. We were not aware of that.”

Levine said on “60 Minutes” that he “perhaps” should have told Brechtel and Jochim that he met the financier at Lewisburg Penitentiary in Pennsylvania.

The Florida’s Comptroller’s Office shut down the Boca Raton firm in March for allegedly “bilking consumers out of upfront fees for loans that were never made,” according to “60 Minutes.”

After his September, 1988, release from prison, Levine established a financial consulting business in New York known as Adasar Group Inc.

Levine said Monday that his current activities are legitimate and that the types of financing he arranges cannot always be accomplished through major banks.

“Our country is mired in the most significant real estate financing crunch in decades,” Levine said. “They were cognizant of the risk factors in going to unconventional lending sources.”

Brechtel and Jochim contend that they lost more than $400,000--including a non-refundable escrow deposit, travel expenses and financing costs--doing business with Levine and some of the companies he recommended.

The Laguna Niguel deal never closed escrow and the property is once again up for sale.