Accused Embezzler Has Few Regrets : Crime: Man charged with taking nearly $8 million says that the firm owed him the money and that if he hadn’t taken it someone else would have.

Looking back now, Danny Hernandez 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 theft of nearly $8 million from a Santa Fe Springs precious-metals firm, Hernandez reflected that he might have hidden the money better.

In his first interview since the couple’s arrest, Hernandez admitted altering the books at PGP Industries, where he worked as a customer service representative, enabling him to cheat the company’s clients out of millions of dollars. He transferred the proceeds into dummy accounts controlled by his wife.

This week, dining in a Beverly Hills restaurant over penne and red wine and with a cellular telephone at hand, Hernandez showed little repentance for his actions, which shocked the staid society set in Orange County last month.

Hernandez said he felt he was entitled to the money because he had served his employer well, and noted 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. 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” at the company where he worked.

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

After Hernandez and his wife were arrested, authorities said their lavish lifestyle had called attention to the couple.

Wearing blue jeans, a tweed jacket and a black shirt buttoned at the neck, Hernandez said over lunch that he does not apologize for thefts or his opulent lifestyle. Even now, he said, he is leasing a Mercedes and a Rolls-Royce.

“If you made $2 million a year, how would you live?” he asked. “It’s the American way, isn’t it?”

When he read that San Diego State University might drop its baseball program, he said he passed along $5,000. When the father of one his child’s classmates had medical problems, he paid for treatment, he said. All told, he said, the Newport Harbor Art Museum got about $95,000. 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 the money in your hands 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.”

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

In fact, Hernandez alleges that others in the company were stealing as well--up to $250 million worth. Authorities refused to comment on his charge.

Hernandez, 40, said he is prepared to testify against officials of PGP and its parent company, Gerald Metals, in Stamford, Conn., about the alleged thefts by others in return for the possibility of a reduced prison sentence for himself.

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. Although he did not condone what Hernandez did, Thomson said in an interview that he had been angered by news reports that the company considers itself a victim of theft.

Company officials denied the allegations Thursday.

“As far as I’m concerned, the allegations are totally malicious and very libelous,” said Gerald Lennard, president of Gerald Metals. “I refute them completely.”

Regardless of whether executives knew about the transactions, Hernandez said he made only one attempt--in 1985--to call the Los Angeles County Sheriff’s Department in Norwalk and notify them about the alleged crimes. Hernandez never gave his name to authorities, he said, and deputies never investigated.

Especially critical of his friends in Newport Beach, many of them society types who have abandoned him, Hernandez said he now knows who his true friends are.

“At Armani, I go in there and they hug me,” he said of the clothier where he bought some of his suits. “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.”

A few unflattering letters have arrived at home, one hoping he will “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 Hernandez and his wife, he said.

Hernandez said his wife, who is charged with the same crimes, knew nothing other than to set up bank accounts as she was told. The accounts were used as a transfer point for much of the $8 million. The couple has two children, ages 6 and 4. Now, one of the children hides his pennies, Hernandez said, because he fears “the government might come.”

Hernandez alleged that on his first day on the job in 1981 he discovered a second set of books that allowed for skimming money. Dumbfounded over what he found, 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.’ ”

Hernandez said that some of the companies that hired PGP to extract precious metals from their industrial waste were aware that they were being bilked and actually paid Hernandez 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 has owned or leased at least 15 cars, including five Mercedes-Benzes, three Rolls-Royces, three Ferraris, a Jaguar, an Aston-Martin, a Porsche and a Jeep. 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 earned $330,000 during the years that millions were being routed through bank accounts.

“In retrospect, 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.”