Car Returned by Guardian to Hemophiliac AIDS Patient : Court case: Channon Phipps has accused the aunt who raised him of stealing the car and money from his trust fund. Accusations rend family.

As her distraught family looked on, Deborha Franckewitz on Monday took the first steps toward returning a car and a portion of trust fund money she is accused of stealing from her 18-year-old nephew, Channon Phipps.

During a brief hearing in Municipal Court, prosecutors announced that Phipps received the pink slip and keys to his 1992 Ford Mustang earlier in the day. And Franckewitz’s lawyer, Gary Tannehill, said he would transfer $16,000 to Phipps’ bank account by Thursday.

Phipps became nationally known in battling to stay in school after contracting the AIDS virus during childhood treatment for hemophilia. He has accused Franckewitz, his legal guardian, of stealing the car and about $52,000 from his trust fund. Tannehill declined to discuss the remaining $36,000, except to say it was not as easily accessible as the first $16,000. “It’s not like it’s all gone and never to be seen again,” he said. “My client denies she ever intended to deprive Channon of anything that was his. Keep in mind, she raised him since he was a baby.”

Franckewitz, 36, of Laguna Hills, was arrested Friday on suspicion of stealing the car and more than $52,000 from Phipps, whom she has cared for since he was a year old. Her arraignment was postponed until Thursday and she remains in custody on $250,000 bail.

Inside the courthouse, members of the family reacted with emotion to the bitter accusations that have torn the family apart.

Franckewitz has said she kept the car and money from Phipps in a desperate attempt to stop her nephew from ruining his life with drugs. Phipps has angrily denied those charges and has accused Franckewitz of abusing pain pills. Neither was available for comment Monday.

At one point in a brief, emotional encounter outside the courtroom, Phipps ran into Franckewitz’s husband, James Franckewitz, and their two teen-age sons.

“He’s furious,” James Franckewitz said afterward. “There’s no reason for it, there’s not.”

The Franckewitzes’ 14-year-old son, Chris, was in tears after the encounter. “I just want him to speak to me,” he said.

Inside the courtroom, Deborha Franckewitz smiled nervously at her husband and the two boys, who were sitting in the back of the courtroom. The younger boy, Justin, was visibly shaken after the fleeting eye contact with his mother.

Phipps was born a hemophiliac to teen-age parents struggling with alcohol and drug problems. At age 11 he learned that he had contracted the virus that causes AIDS through tainted blood products provided by UCI Medical Center. He became ill with AIDS earlier this year.

Phipps had sued the hospital and in 1989 settled for $125,000. After legal expenses were paid, the remaining money was put in a trust fund until Phipps turned 18.

That money, about $78,600 according court records, stayed in the trust fund until Nov. 2, a day after Phipps turned 18. Phipps claims that on that date, his aunt convinced him that the government had liens against the money, and that it would be protected in an account under her name.

According to a Sheriff’s Department report, the two closed out the trust fund, withdrew about $52,000 in the form of a cashier’s check and deposited it into an account under Franckewitz’s name. Cashier’s checks were also written to pay for Phipps’ new car. At the same time, a checking and savings account for Phipps was opened with about $700, according to court records.

Bank officials told sheriff’s investigators that Phipps was present during the transactions and signed the paperwork to open up the account for the $52,131.

Phipps, who recently went to live with his father in Anaheim, has since said that he was tricked by his aunt and wasn’t sure what he was signing. According to his statement to sheriff’s investigators, Phipps said he called his aunt in mid-November and told her he wanted his car and money back, but was allegedly told by her: “You’re not getting the money. You owe me; the money is mine.”

The next day, Phipps said he went to his aunt’s home and found her gone, along with his car. He said he then found out his bank account was empty. He and his father, Charles Phipps, filed a police report on Nov. 23.

James Franckewitz said he and his family had only gone to Idaho on a planned trip to visit relatives.

Officials allege that $5,000 of Phipps’ money was spent to post bail for James Franckewitz after he was arrested in Idaho on suspicion of assault stemming from a traffic dispute.

The family returned to a Laguna Hills motel, where Deborah Franckewitz was arrested early Friday, officials said. James Franckewitz said the family was staying in the motel because their apartment had been vandalized.