Final Arguments in Big Investment Fraud Case Begin : Courts: The 81-count indictment against Olen B. Phillips and Charles J. Francoeur involves losses of about $3 million.

After presenting more than two months’ worth of testimony and more than 500 pieces of evidence in the biggest fraud trial in Ventura County history, attorneys on Tuesday began telling the jury what it all means.

In closing arguments that are expected to last through the end of the week, the prosecutor and two defense attorneys are leading the 12 jurors and one alternate through the piles of evidence amassed in the case of Olen B. Phillips of Thousand Oaks and Charles J. Francoeur of Agoura Hills.

An 81-count indictment charges the two with grand theft, securities fraud and sale of unregistered securities in the operation of Phillips’ defunct businesses, collectively known as the Phillips Financial Group.

The indictment deals with 21 investors who say they have lost about $3 million, but investigators have said that hundreds of people lost as much as $30 million invested with the company.

In her summation, which will continue today, Deputy Dist. Atty. Rebecca S. Riley said, “This case is about a betrayal of trust.”

Time after time, she said, Phillips and Francoeur took an investor’s money, vowed that it would be safe and promised to use it to buy or develop a specific piece of property. Over and over, she said, they instead used the money to cover interest payments due to other investors, or to cover day-to-day expenses needed to keep their troubled business afloat.

“This is a case of a company that introduced something into its workings that became malignant, grew out of control and consumed the company,” Riley said.

Going through the indictment count by count, Riley reminded the jurors of the various victims who had told their stories from the witness stand.

For example, she mentioned Calvin Cooley, who said he lost $120,000 of his own money and $41,000 that he invested for his mother. Cooley had stressed to Phillips how important the money was to his mother, Riley said, and Phillips had assured Cooley that he would get second trust deeds in exchange for the investments. Cooley trusted Phillips--both were United Air Lines pilots--and did not ask for title insurance, Riley said.

In September, 1988, Phillips sent Cooley a letter saying his deeds were on their way to the county to be recorded--a crucial step toward protecting the investment. But more than a year passed before the deeds were recorded, Riley said, and by that time there were many other deeds already attached to the properties.

Several times in 1989, Riley said, Cooley tried to get back the money that he and his mother had invested and was told that the company was short on funds. Yet during the same period, Phillips and Francoeur were soliciting funds from other investors without advising them of the firm’s difficulties, the prosecutor said.

Adam Bowers learned of Phillips’ firm through his father, another United pilot, Riley said. With other investments, Bowers had parlayed a $40,000 insurance settlement into a $70,000 nest egg for his education. But soon after investing it with Phillips’ firm, Bowers stopped receiving interest payments, Riley said. When he went to the company office for an explanation, Bowers said he caught Phillips running out the back door.

Bowers eventually obtained the deed connected with his investment and recorded it himself, putting him in a somewhat more favorable position than other investors when the company collapsed in late 1989, Riley said.

The largest loss mentioned by Riley was $900,000 invested by Arlon Enmeire, a financial adviser acting on behalf of a Christian educators’ pension fund. Enmeire knew Phillips because both were active in a Baptist congregation. “He relied on trust,” Riley said. “He did not insist on title insurance.”

Enmeire thought that the investment was going for a first trust deed--which would put his investors first in line in case of default. Instead, they were fifth in line.

The defense attorneys--Steven D. Powell for Phillips and William B. Maxwell for Francoeur--will present their closing arguments when Riley finishes, then the prosecutor will get the last word. Judge Frederick A. Jones is expected to begin instructing the jury next week.

In their opening statements and through their questioning of witnesses, the defense attorneys have tried to make two major points: that the investments were not securities, as defined by the law, and that the investors knew they were making speculative real estate investments in which there were no guarantees.