O.C. Man Regrets Little in Theft of $8 Million : Fraud: Daniel Hernandez says he was entitled to money, lavish lifestyle. ‘What I did was not wrong.’

Looking back now, Daniel Hernandez says he has a few regrets. But, then again, too few to mention.

One month after he and his wife, an Orange County society couple, were arrested in connection with the disappearance of nearly $8 million from a Santa Fe Springs precious-metals firm, Hernandez wished only that he had hidden the money better.

Depicting himself as a modern-day Robin Hood, Hernandez, in the first interview since the couple’s arrest, admitted altering the books at PGP Industries where he worked, enabling him to cheat that company’s clients out of millions of dollars in precious metals, and transfer the proceeds into dummy accounts controlled by his wife.

But Hernandez said he was entitled to the money because he had served his employer well, and pointed out that he had contributed mightily to charities and those less fortunate than himself, demanding nothing in return.

“What I did was not wrong,” he said. “That was my percentage that I stole. . . . I was one hell of a good employee for my company. I did my job as well as you do yours. Do I feel guilty? Maybe in retrospect I do. But if they hadn’t given me a piece of the money for myself, it would have gone into someone else’s pocket.”

Other top officers at the Santa Fe Springs company where he worked, Hernandez said, were aware of the skimming that allowed him to support a lavish lifestyle, and surround himself with 15 luxury automobiles, a five-bedroom Mission Viejo home, take annual trips to Paris and Milan, and outfit himself in Armani clothes.

He alleged that his former employer profited from the money-skimming operation, too, and estimated that as much as $250 million had been improperly diverted over the past two decades.

Company officials promptly denied his allegations. “As far as I’m concerned, the allegations are totally malicious and very libelous,” said Gerald Lennard, president of Gerald Metals, PGP’s corporate parent based in Stamford, Conn. “I refute them completely.”

Hernandez, 40, said he is prepared to help the government prosecute officials of PGP and its parent company in return for the possibility of reduced prison sentences for himself and his wife.

Both Hernandez and his wife face up to 10 years in federal prison. Each has been charged with single counts of mail fraud, wire fraud and money laundering. Assistant U.S. Atty. Stephen Wolfe said more counts would be added today and possibly more by Monday. He would not discuss the possibility of a plea-bargain with Hernandez.

Seated in the fashionable Mezzaluna restaurant in Beverly Hills, sipping red wine from a stemmed Bordeaux glass and nibbling on a pasta appetizer while awaiting a main course of penne arrabiata, Hernandez disclosed that he made one halfhearted attempt to notify local authorities of the money skimming at PGP Industries.

He said that in 1985 he called the Los Angeles County Sheriff’s Department in Norwalk to notify them about the alleged crimes. Hernandez never gave his name to authorities, he said, and he didn’t try again when deputies failed to check out his first tip.

PGP’s former controller, Paul Thomson, who resigned in January after nearly six years on the job, supported Hernandez’s allegations that top company officials knew of skimming from customer accounts, and even included the proceeds when it projected annual income forecasts.

Contacted by The Times, Thomson said that while he didn’t condone what Hernandez did, he was willing to substantiate Hernandez’s allegations, because he was angered by press reports depicting company officials as theft victims.

Thomson said he recently became aware of alleged company wrongdoing but did not report it because he was worried about losing his job in a tough economy. Hernandez was suspended in December after federal agents approached his employer, and was subsequently fired.

In the rambling, 2 1/2-hour restaurant interview, Hernandez showed little remorse for his actions, which stunned the Orange County society set when Hernandez and his wife, Susie, were arrested one month ago today.

Authorities said the Hernandezes had attracted attention to themselves with their lavish lifestyle, and might never have been caught had they chosen to live more modestly.

Clad in blue jeans, a tweed jacket and a black shirt buttoned at the neck, Hernandez was not apologetic for the wealth he amassed. Even now, he said, he has two leased Mercedes-Benzes and a Rolls-Royce Corniche. “If you made $2 million a year, how would you live?” he asked. “It’s the American way, isn’t it?”

Free on bail of $100,000 after his arraignment where he pleaded innocent, Hernandez said he is planning to wage a court fight to regain some of his assets that were seized by federal agents.

Hernandez recalled some of his acts of generosity during the interview. When he read that San Diego State University might drop its baseball program, he said he donated $5,000. When the father of one his child’s classmates had medical problems, he said he paid the bills. All told, he said he contributed about $95,000 to the Newport Harbor Art Museum, including $50,000 raised at a charity banquet. He estimates that he has given away about $1 million.

“I had to go and give $50,000 to some stupid . . . charity, and as soon as you do that, everybody else wants money, and I’m the type of guy who can’t say no. The person next to me says he lost his job, I give him $200. That’s me. I don’t say no to anybody. Everybody else’s problems are on my shoulders.”

Especially critical of acquaintances in Newport Beach, many of them society figures who have turned their backs on him, Hernandez said he now knows his true friends.

“At Armani, I go in there and they hug me,” he said of the clothier where he bought much of his wardrobe. “They can look in my eye and heart and know the truth. I helped everyone I could. If I could help someone, why shouldn’t I? I’m not greedy.”

“These (Newport Beach) people are 50, 60 years old,” he said. “The only thing I had in common with them is that some of their wives liked me. The men were too old for me.”

A few unflattering letters have arrived at home, one hoping he’ll “rot in jail” and another asking, “How dare you to feel you belong in our society?” The constant pressure has hit home, creating an ever-increasing amount of tension between him and his wife.

Hernandez sought to deflect all blame from his wife, who is charged with the same crimes, saying she did nothing other than to set up a number of bank accounts as she was told. The accounts were used as a conduit for much of the $8 million that was ultimately traced to the couple’s joint checking account at a Pacific National Bank branch in Orange County. The couple have two children, ages 6 and 4. The younger child hides his pennies, Hernandez said, because he fears “the government might come.”

Hernandez said that on his first day on the job in 1981, he discovered a second set of books created to facilitate the skimming of money from client accounts. Dumbfounded by his discovery, he called his wife.

“I thought I was bright,” he said. “I told her, ‘Guess what they do here? They steal!’ She just figured, ‘Well, the pay is all right. They must know what they’re doing.’ ”

Over time, Hernandez said he learned that some of the companies that had contracts with PGP to extract precious metals from their industrial waste were aware that they were being bilked. Some, he claimed, even paid him a commission not to steal from them. He said he made about $1 million that way.

The government has alleged that $400,000 of the stolen money was used to pay for Susie Hernandez’s jewelry, and that since 1987 the couple have owned or leased at least 15 luxury cars, including five Mercedes-Benzes, three Rolls-Royces, three Ferraris, one Jaguar, one Aston Martin and one Porsche. The cost of the cars and leases totaled $1.65 million.

It never occurred to Hernandez that his wealth might tip authorities to his tax returns, which showed that he and his wife only earned $330,000 during the years that millions were being routed through their bank account.

“I didn’t think I would ever get caught,” he said. “When you’re in the open and people don’t exactly know what you do at your job, why would anybody ever wonder? If you’re making $150,000, I’m not going to ask you where you got it. But I’m not like everyone else who’s jealous and has a bone to pick with everyone else’s lifestyle. If I had, I would have hidden things a lot differently. The money would have gone out of the country and never come back.”

Hernandez described a deal he is working out with federal prosecutors that would have him serve perhaps only six months in prison. Authorities have said he is likely to spend at least two or three years in prison.

“What time did Michael Milken get and what did he do?” Hernandez asked. “Big stuff. Now what did I do? Who did I hurt?”

Hernandez takes some solace from the fact that he was not stealing from individuals who had their fortunes tied up in precious metals. He justified what he was doing by reminding himself that he was ripping off large companies who could stand to suffer the loss.

“Who did Charles Keating hurt? He hurt individual people,” Hernandez said. “Who did (financier Ivan F.) Boesky hurt? I didn’t hurt any people. I know there is not one person I could look in the face and say, ‘I hurt you.’ These were corporations. How big is Dupont? Are they going to miss 100 grand? Probably not.”

Hernandez said he is upset with federal investigators, who he said led him to believe they were going after the companies involved and would be leaving him alone.

“I’m hurt by all this,” he said. “I’m not going to trust anyone anymore. They took away the innocence that I had.”