Couple Charged in $7.9-Million Theft : Crime: Orange County philanthropists allegedly supported lavish lifestyle by siphoning money from metals firm.

An Orange County couple known for their lavish lifestyle and arts patronage were charged Friday with mail fraud, conspiracy, money laundering and illegal wire transfers in connection with nearly $8 million missing from a Santa Fe Springs precious metals firm.

Federal authorities allege that Daniel Hernandez, a sales representative for PGP Industries, which refines precious metals, made phony bookkeeping notations and transferred company money into bank accounts controlled by his wife, Susie Hernandez.

The Mission Viejo couple surrendered to authorities Friday on federal charges and bail was set at $100,000 each in U.S. District Court in Los Angeles. After appearing before a federal magistrate, Susie Hernandez, 41, was released on a promise to post bond next week. Daniel Hernandez, 40, was being held Friday night.

Assistant U.S. Atty. Stephen Wolfe said he would bring the Hernandez case to a federal grand jury within 10 days. An attorney for the couple declined to comment Friday.

Authorities said they believe the couple used the money over the last four years to pay for luxury cars, expensive jewelry, costly homes, investment property and international travel.

For his wife’s 40th birthday, Daniel Hernandez stashed a diamond bracelet in the glove compartment of her gift--a red Ferrari Mondial. For his 40th, Susie Hernandez threw a bash at the Four Seasons Hotel in Newport Beach for 110 of their friends, with engraved invitations and a color photo of Daniel embossed on bottles of champagne.

Friends and fellow Orange County socialites said they were told the Hernandezes earned their riches through precious metals trading and never questioned whether the couple had the money to support their lifestyle, including generous charitable contributions.

“The mystery to us is where they came from because they suddenly burst forth on the social scene and the philanthropic scene--we didn’t know their background or anything,” said Maxine Gavier, spokeswoman for the Newport Harbor Art Museum, where Susie Hernandez is a board member.

“When you’re in development, you usually track people for years, but suddenly there were the Hernandezes, full blown--so that was kind of mysterious,” she said. “They are wonderful, and they are representative of a new generation of philanthropists.”

But IRS agents who began to investigate Daniel Hernandez about a year ago said that the couple’s lavish lifestyle wasn’t supported by their reported income. The couple declared bankruptcy in 1985 and filed income tax returns stating they made $410,509 over a six-year period ending in 1990. However, they amassed $7 million since 1987, IRS agents allege.

According to a complaint filed in federal court, the Hernandezes owned or leased 15 luxury cars, including five Mercedes-Benzes, three Rolls-Royces, three Ferraris, a Jaguar, an Aston Martin, a Porsche and a Jeep. The cars cost a total of $1.65 million. They also paid a $3,582 monthly mortgage payment on their $635,000 Mission Viejo home, and bought a lot in Laguna Niguel for $660,000, IRS agents allege.

Susie Hernandez charged more than $400,000 in jewelry to her Neiman Marcus card between 1989 and 1992, and the couple traveled to France, Italy, Mexico and Switzerland during that period, according to the affidavit. The document was filed this week in support of a search warrant to inspect the couple’s home, two bank accounts, a safe deposit box and a storage space in Costa Mesa.

A partial list of items seized Friday include a Ferrari Testarossa, a mink coat, jewelry and an undisclosed amount of cash, IRS spokeswoman Judith Golden said.

IRS officials investigating the couple approached PGP officials late last year, according to court documents.

A company executive told investigators that an internal audit found Hernandez had made 109 transactions between March, 1989, and December, 1992, and was believed to have siphoned $7.86 million out of the company, the affidavit said.

Hernandez, who began working for PGP in 1981, was placed on leave last December after the company discovered the money was missing. He was later fired, according to the affidavit. Company officials in Santa Fe Springs declined to comment Friday.

Daniel Hernandez was the oldest of five children in a Mexican-American family from Topeka, Kan. His father worked for the Santa Fe railroad, he told a Newport Beach society magazine in 1991.

Susie Hernandez was raised by a poor Palestinian family that fled for Jordan from Israel in 1948 and eventually moved to Hawthorne, she told the magazine. Her father was a textile merchant.

The couple married in 1981 after meeting at a Newport Beach restaurant, and Daniel joined PGP that year. They told friends they had made money from investments in real estate and the silver market on the advice of a PGP executive. They have two children.

“I don’t have to work, but I like it,” Daniel Hernandez told Newport Beach (714) magazine. “It keeps things in perspective and keeps me humble.”