Phillips Gets Probation and 60 Days in Jail : Fraud: Investors and prosecutors are stunned. An associate in the same financial scheme receives a 7 2/3-year prison term.

Olen B. Phillips, once accused of masterminding the biggest fraud in Ventura County history, was sentenced to probation and 60 days in jail Thursday while his right-hand man received 7 2/3 years in prison in the same case.

The sentences by Ventura County Superior Court Judge Frederick A. Jones stunned prosecutors and investors, who said Phillips deserved a prison term as much as his associate, Charles J. Francoeur.

“Phillips was the mastermind behind the whole operation,” said Jackie Lahr of Malibu, who said her family lost nearly $400,000 invested with Phillips’ now-defunct real estate investment company, the Westlake-based Phillips Financial Group. “For him to get probation is a travesty of justice.”

But after a four-month trial, a jury last month convicted Phillips of only one count of grand theft by fraud in an 81-count indictment. Francoeur was convicted of four grand theft charges and one conspiracy count.

The indictment accused the pair of stealing about $3 million from 21 investors, but investigators have said that hundreds of residents of Ventura and Los Angeles counties lost as much as $30 million that they invested in limited partnerships operated by Phillips’ company.

At Thursday’s sentencing, Jones acknowledged that many of those investors had sent him letters protesting the verdicts and that attorneys had urged him to discount the jury’s findings in determining sentences.

“The state wants the court to sentence the defendants as if they were convicted of all the charges the state failed to prove,” Jones said. “I categorically reject these suggestions.”

In granting Phillips five years’ probation, Jones noted that he had repaid the $15,000 that he stole from a Colorado man, and that the victim did not want Phillips to go to prison. The judge said Phillips met several other criteria for probation.

And in giving Francoeur the maximum prison term possible, Jones described him as “cold, calculating and uncaring,” a man whose victims included a family that lost $113,000 and is now on welfare. The only remorse Francoeur feels is “remorse for his present predicament,” Jones said.

Francoeur, 35, of Agoura wiped away tears as Jones denied his request for probation, gave him the maximum sentence for each count and said the sentences would run consecutively. After the judge said he could have a week before starting his sentence, Francoeur rushed from the courtroom and declined to comment.

“This whole experience has been pretty devastating, “ said Francoeur’s attorney, William Maxwell.

Phillips, who had faced a maximum sentence of three years in prison, also declined to comment, but he smiled as he left the courtroom and joined his family and the pastor of his church in a prayer of thanks outside the Hall of Justice.

Phillips, 52, who has moved from Thousand Oaks to Oak View, was ordered to begin serving his jail term on Oct. 8. He already has credit for 32 days and, with good behavior, could complete the rest of his sentence in as little as 20 days.

After Francoeur’s sentencing, Deputy Dist. Atty. Rebecca S. Riley said she thought the prison term was “totally appropriate.” But when Phillips was sentenced a few minutes later, Riley gave a firm “No comment” as she left the courtroom.

Dist. Atty. Michael D. Bradbury said he has great respect for Jones but added that he believes Phillips deserved a prison sentence. “Anything short of that is inappropriate,” Bradbury said.

Phillips’ legal troubles may not be over. The FBI is known to be investigating other aspects of his financial affairs, particularly his role as a director of the now-defunct United Community Bank of Thousand Oaks. United Community was the parent company of Westlake Thrift & Loan of Westlake Village, which was closed by regulators in 1988.

In addition, Phillips faces several lawsuits filed by disgruntled investors. Phillips’ company was shut down by state and county investigators in 1989, and a court-appointed receiver is trying to sort out its affairs.

Like the indictment, the lawsuits allege that Phillips and his associates took investors’ money and gave them trust deeds that were never recorded and were essentially worthless. Evidence presented at the trial showed that some properties were encumbered with more than 200 trust deeds. The investors’ money allegedly was used to pay off earlier investors and to fund the company’s operations.

During the trial, Maxwell and Phillips’ attorney, Steven D. Powell, acknowledged that the company had cash-flow problems but contended that it could have worked them out if investigators had not shut the firm down prematurely.

But on Thursday, Jones said the thefts were committed the minute the defendants used deception to persuade investors to part with their money--whether or not they ever got it back. “The fact of these considerable losses, the personal and emotional devastation” only aggravate the case, the judge said.

He also chided attorneys for both sides for suggesting that the jurors “didn’t understand the law or were confused and befuddled by the enormous volume of evidence” and that he should correct the jury’s supposed blunder.

“In the court’s opinion, each verdict is amply supported by the evidence,” Jones said.

In sentencing Francoeur, the judge highlighted the plight of the Robert Barrera family, which lost $113,000 and is now receiving public assistance.

Barrera, a Moorpark man who was investing for his mother and his two disabled sisters as well as himself, told Francoeur that the money was all they had and that they were looking for a safe investment, Jones said. By taking their money, Francoeur was guilty of “blatant, direct, obviously premeditated deceit” and he left the family with “nothing that they worked and saved to have,” the judge said.

Barrera was not among the courtroom spectators Thursday--another investor said he had to care for an ailing relative--but several spectators said they feel just as victimized.

Lois Trzeciak of Newbury Park said she and her husband, John, lost their life savings, although she declined to give the amount. As a result, she said, they live on pensions and are unable to help their children as much as they might. “It just cut to the bone,” she said.

She said she worked for Phillips for 12 years as a real estate agent before leaving for medical reasons in 1988. “I trusted him and admired him,” Trzeciak said. “He was such a charming person.”

By staying out of prison, Phillips, a United Air Lines pilot, will be better able to pay back investors who lost money in his company, attorney Powell said. As part of his sentence, Francoeur was ordered to pay $10,000--the maximum allowed by law when a defendant is sent to state prison--to be divided among his victims.

Jones said hearings will be held later to determine whether either of the defendants will be able to repay the county the cost of his defense. The Board of Supervisors approved spending $385,000 to defend the complicated case after the defendants pleaded poverty.

Felix Laumann of Cambria, another company official named in the indictment, was granted a separate trial because of a liver ailment. The trial is scheduled to begin in January.