Taxpayers Could Pay Big Tab in Fraud Case : Courts: Accounting fees may be $350,000 for two businessmen accused of bilking 21 people out of more than $3 million.

Taxpayers may end up spending $350,000 in accounting fees alone to defend two Thousand Oaks businessmen charged in the biggest fraud case in Ventura County history.

Though Olen B. Phillips and Charles J. Francoeur still hold high-paying jobs and own their homes, a Superior Court judge has found that no private attorney will take their case and has appointed two public-paid lawyers to defend them.

And on Tuesday, court officials will ask the County Board of Supervisors to hire a team of accountants for $350,000 and investigators for $35,000 so the two men can have a proper defense.

“An extensive accounting review and analysis of approximately 27 multidrawer filing cabinets, over 350 boxes, and a large storage bin full of information all involving over 60 economic entities is required,” says a letter to supervisors from Sheila Gonzalez, executive officer for the county court system.

Phillips, a real estate financier, and Francoeur, an executive in the same firm, are charged with 81 counts of grand theft and securities fraud.

Surprised county prosecutors blasted the court officials’ $385,000 request.

“These people are essentially getting a blank check signed by the taxpayers,” said Deputy Dist. Atty. Rebecca Riley, who is prosecuting the case.

“As a taxpayer, it offends me. It’s an incredible amount of money,” she said. “And what is being done sounds totally unnecessary. I can’t imagine that this is going to help their defense in any way.”

Riley said the district attorney’s office, which prosecutes thousands of cases a year, has an annual budget of only $1 million for the type of expert accounting and investigation that is being requested for the defense in this case.

But William C. Maxwell, the attorney hired to defend Francoeur, said the district attorney’s office has forced the county to spend a lot of money by indicting Phillips and Francoeur on 81 counts.

A third defendant, Felix Laumann, who worked at Phillips’ Thousand Oaks real estate investment firm, was indicted on 27 counts. He is represented by the county public defender’s office.

The three men were indicted in February on charges that they bilked 21 people out of more than $3 million. Investigators have said that more than 2,000 investors may have lost more than $30 million in deals handled by Phillips’ companies.

Maxwell said that if prosecutors wanted to keep public costs down, they could have charged the defendants on just six or seven counts. The maximum sentence is 10 years whether the men are convicted on seven counts or 70, he said.

“So why charge 80-some counts? Why drag 55 witnesses to the grand jury?” he said. “Because they wanted to make it a big splash case. But they also made it a big, cumbersome case.”

The sheer size and complexity of the case apparently scared away all private attorneys, said Maxwell and Deputy Public Defender John Voitsberger, who is representing Laumann.

Superior Court Judge Allan L. Steele determined in February that the defendants did not have the assets to lure private attorneys into a case where the trial alone could last six months, Voitsberger said. Phillips and Francoeur initially had private attorneys, he said.

Phillips of Westlake Village, Francoeur of Agoura Hills and Laumann of Cambria all own their homes and are employed, county attorneys said. Phillips earns $150,000 a year as an airline pilot, Riley said. Francoeur is a business executive, and Laumann is a real estate agent, Voitsberger said.

None of the defendants is indigent by the common definition, he said.

“Indigency is a relative term,” Voitsberger said. “Someone may be indigent for the purposes of a murder case, but well able to retain counsel for a drunk-driving case. You’re talking about a vast difference in expenses.”

Maxwell argued that county supervisors should approve the extra $385,000 for Francoeur’s and Phillips’ defense because “each of these guys is entitled to as good a defense as anybody else can get. They’re entitled to it.”

Prosecutors spent 18 months preparing their case for filing, working closely with experts from numerous state and federal agencies, Maxwell said.

“These people have pooled their resources, assisted each other and taken a lot of time to put this case together,” Maxwell said. “Now they get an indictment and say, ‘Here’s the material.’ It’s huge. It’s mind-boggling. So we had to start from scratch. . . . You’ve got piles of documents and you’ve got to do something with that.”

Court officials noted that even though taxpayers are picking up the defense tab for now, the county can seek a court order for full or partial reimbursement once the trial is over.

Prosecutor Riley said, however, that Phillips’ 4,300-square-foot luxury home in Westlake Village and Francoeur’s 2,400-square-foot house in Agoura Hills are exempt from assets the court could order turned over to the state for legal expenses.

“And as far as I know, Phillips is still driving his Mercedes,” she said.