Suspect in Brazen Scams Pleads Not Guilty : Crime: Liam Russell answers another indictment. His attorney says charges are based on business failures.

A former Santa Paula man accused of brazen schemes that left a trail of victims across California pleaded not guilty Friday to various felonies, including writing a bad check to buy a bankrupt hospital.

It was the second time Liam Patrick Russell, 34, now a Los Angeles resident, has answered an indictment by a Ventura County grand jury in the last five months.

All together, Russell is accused of:

* Defaulting on payments for a lot in a luxury Camarillo housing development and a recreational vehicle dealership in Santa Paula;

* Failing to pay sales tax or consignment fees for RVs that he sold from the dealership;

* Running up a $3,300 bill on a cellular telephone he set up in someone else’s name;

* Writing a bad check for $250,000 to buy a San Diego hospital;

* Writing a bad check for $32,000 to buy a four-wheel-drive vehicle;

* Selling a hydraulic lift he didn’t own;

* Pawning a recreational vehicle that wasn’t his for $25,000;

* Lying to the grand jury investigating the incidents.

“It’s a very odd case,” Deputy Dist. Atty. James Cloninger said.

Defense attorney Jonathan Kissel said the accusations are not valid and criticized prosecutors for turning Russell’s business failures into criminal charges.

“It’s our position that many of the charges in both indictments were civil matters, and that the victims are attempting to use the district attorney’s office as a collection agency,” Kissel said.

But Janice Rawson of San Diego County said she and her husband expect to never recover any money they lost in dealings with Russell. She said she and her husband are out the bulk of their retirement funds and are in danger of losing their home.

“We are now so far in debt that it’s not even funny,” Rawson, 62, said. “I’m cried out now. I didn’t sleep for two years. When I realized I couldn’t do anything about it, I stopped thinking about it.”

Russell, who is free on $40,000 bail, is scheduled for trial June 7 on the 32 counts contained in the first indictment and four charges in the second.

They include multiple counts of grand theft and sales tax fraud plus forgery, false personation, writing bad checks and perjury.

In the second indictment, Russell is charged with writing a $250,000 non-refundable check in July, 1991, to buy General Hospital of San Diego, which was in bankruptcy proceedings. The check was written on an Encino bank account that had been closed and never had more than $8,200 in it, Cloninger said.

Russell told the escrow company handling the hospital sale that the account had been closed in error, the prosecutor said.

Cloninger said a pattern exists in many of Russell’s deals. “It’s always someone else’s fault, it’s always someone else’s mistake,” he said.

Ventura County prosecutors had heard about the incident but thought they had no jurisdiction because the bank is in Encino and the hospital San Diego, Cloninger said.

After the first indictment was handed down in November, Cloninger said he learned that Russell sent the check for the hospital from Ventura, allowing prosecutors to pursue that part of the case too.

At about the same time, prosecutors said they learned that Russell had opened a cellular telephone account using the name of a female friend. The woman reported the incident to law enforcement officers after she received a notice from the phone company complaining about an unpaid $3,300 bill, Cloninger said.

“She was pretty shocked,” Cloninger said, adding that the woman is struggling to make ends meet and cannot afford to pay the bill.

Many of the charges in the first indictment center on Ron’s RV Sales in Santa Paula, which Russell bought in April, 1990, for $120,000, with no money down. Russell “promptly drove the business into the ground,” Cloninger said, and within four months the company lost its license to operate and shut down.

The prosecutor said the dealership’s sellers never got their money. Furthermore, he said, the tax collected during the sale of recreational vehicles was never forwarded to the state, the company that financed the inventory was not paid $235,000 it was owed, and individuals who let Russell sell their vehicles on consignment were never paid.

In addition, a search warrant revealed that Russell had signed $80,000 in checks on company accounts made out to “cash,” Cloninger said. In liquidating the company’s assets after it went bankrupt, Russell sold a hydraulic lift to an RV dealer in the San Fernando Valley, when in fact the equipment was leased to Ron’s RV Sales, not owned by it, Cloninger said.

Cloninger said dealership victims, many of them elderly, had to return RVs they bought when they discovered that Russell did not use their purchase money to pay off notes held by the previous title holders. In addition to losing the vehicles, the retirees could not recover the tens of thousands of dollars they paid for them, the prosecutor said.

Kissel, who refused to discuss specific charges, blamed the dealership problems on General Electric Capital Corp., which financed the inventory on the RV lot.

“Had the mortgage company not pulled the rug out from underneath Mr. Russell, I doubt we would be here today,” Kissel said.

As for other people named as victims in the charges, Kissel said many of them entered into business agreements with Russell that “could have been very successful but ultimately failed” because the individuals complained too soon.

“The victims did not allow the ventures to complete themselves, but instead jumped the gun due to pressing financial times both in the real estate and financial markets,” Kissel said.

Duane Rawson said he and his wife met Russell when he answered a newspaper advertisement concerning their vacant lot in Camarillo’s Las Posas Estates. The Rawsons sold the lot to Russell for $285,000, agreed to finance $200,000 of the price themselves through a second trust deed, and allowed Russell to take out a new first mortgage on the property for $140,000, Duane Rawson said.

When Russell missed the first $1,500 payment on the second trust deed in May, 1991, he assured the Rawsons that the money was on the way, Duane Rawson said. When the promises continued but no money arrived, the Rawsons foreclosed on the second trust deed in August, 1991.

By then Russell also had defaulted on the first mortgage, Duane Rawson said. The Rawsons paid the $1,700 monthly payment on the first trust deed for several months to protect their interests, but they eventually lost the lot.

“The money that we thought we had for retirement has just disappeared,” Janice Rawson said.

Charges related to the Rawson transaction are part of the first indictment, as are allegations that Russell wrote a bad check to Ventura Toyota for $32,000.

When that check bounced, Russell gave the auto dealership a forged letter from a San Diego escrow company saying that Russell would receive a substantial amount of money when certain real estate transactions were completed, Cloninger said.

The prosecutor said Russell at one time had about 10 real estate deals in escrow, but the one with the Rawsons was the only one that closed. Russell took $10,000 in cash from that transaction, Cloninger said.