THOUSAND OAKS : Biggest Fraud Trial Is Winding Down

Olen B. Phillips and Charles J. Francoeur “did everything they could to pay their debts,” Phillips’ attorney told jurors Wednesday as a fraud trial billed as the largest in Ventura County history began to wind down.

“These gentlemen are not criminals,” attorney Steven D. Powell said in his closing argument.

Phillips and Francoeur are accused of grand theft and securities violations in the operation of their defunct real estate investment business, the Phillips Financial Group, of Thousand Oaks. Deputy Dist. Atty. Rebecca S. Riley has argued that they lied to investors who purchased trust deeds from the company and that they misappropriated about $3 million.

“Sure, it turned out that (investors) were not repaid after Dec. 15, 1989,” when the state Department of Corrections shut down the company, Powell said. But he said the state was to blame for destroying a viable business.

“Folks, that business was on track,” Powell said. If not for the closure, he added, “these lenders and investors had a fair chance of realizing their goals.”

Powell said the investors who testified that they were misled by Phillips and Francoeur had been influenced by the prosecutor and embittered by their losses.

Francoeur’s attorney, William B. Maxwell, is expected to begin his summation today.

Earlier Wednesday, Superior Court Judge Frederick A. Jones issued his second warning to trial spectators to avoid contact with jurors. The admonition came after two jurors reported hearing someone comment on the case in a courthouse elevator.

“What was said was innocuous and had little bearing on the facts in the case,” Jones said, adding that he was satisfied that the comment would not influence the jurors’ deliberations.

Jones warned the spectators, however, about the “incredible mischief that could be worked by such inappropriate conduct.”

The trial began in April after more than two years of investigation. Two members of the original jury already have been replaced by alternates, leaving only one more alternate available. Jones’ courtroom has been filled with more than 50 spectators on some days, including relatives of the defendants and investors who lost money.

“No one wants to try this case again,” the judge said. The incident Wednesday--as well as one in April when courtroom spectators sat next to jurors in the courthouse cafeteria--apparently was unintentional and not an attempt at jury tampering, Jones said.

“But if it happens again, I will be much less likely” to believe that, he said, warning of “Draconian things the court could do to keep the jury from being influenced.”

After the first incident, Jones had jurors leave by the courtroom’s rear exit to avoid contact with spectators. All wear tags identifying them as jurors, and they are told to stop anyone from discussing the case in their presence.