Newport Businessman Guilty of Racketeering : Trial: Michael E. Parker, ‘king of greed,’ is convicted of orchestrating $11-million fraud on Columbia S&L;.

Michael E. Parker, a once-flamboyant Newport Beach businessman whom prosecutors dubbed the “king of greed,” was convicted Wednesday of racketeering and other crimes for orchestrating an $11-million fraud on now-defunct Columbia Savings & Loan.

A federal court jury found Parker guilty on 36 of 39 counts accusing him of selling inflated or nonexistent tax-shelter investments to Columbia, receiving kickbacks and then trying to cover up the scheme.

The jury acquitted Parker, 45, on three minor charges of interstate transportation of stolen property involving checks that came out of his own account. But it found him guilty on charges that also included conspiracy, fraud, money laundering and tax evasion.

Parker stared blankly at the defense table as U.S. District Judge Robert M. Takasugi read the verdict. He faces more than 200 years in prison--at least 15 years under mandatory sentencing guidelines--when he returns to court for sentencing on July 12.

The jury took two days to reach its verdict after the three-week trial.

“The scope of the fraud is huge, and it is one of the larger cases we’ve prosecuted,” said Assistant U.S. Atty. James R. Asperger.

Parker, with two sisters to comfort him nearby, said, “All I want to say is I’m very disappointed.” His chief lawyer, Thomas F. Holliday, said an appeal will be considered.

Though he showed no emotion as the verdict was read, Parker later wept quietly as Asperger called him “a one-man crime wave” and sought to revoke his $1-million bail. But Takasugi left the bail in place. He ordered Parker instead to be detained at home with his movement monitored by an electronic bracelet.

Parker, who operated his scheme as president of Parker North American Corp., also faces a criminal bank fraud indictment in Las Vegas for allegedly bilking First Interstate Bank of Nevada of $8 million. He is also a defendant in a series of civil lawsuits accusing him and others of defrauding investors in a second company, Parker Automotive Corp. in Costa Mesa. Both companies are in bankruptcy proceedings.

Through Parker North American, Parker arranged for banks, S&Ls; and other companies to lease equipment, mainly automated teller machines. He then sold both the leases and the equipment to investors, which typically were other banks and S&Ls;, in deals that provided the buyers with tax benefits.

A number of lease packages sold to Columbia were based on contracts and equipment that didn’t exist or had inflated values, the jury found. Parker denied knowing until 1989 that some of the deals were entirely phony.

Parker told jurors that his company gained $31 million from the S&L; on the sales of lease agreements. He admitted that $11 million from those transactions never showed up on the records of his company. He received $8 million of that amount, and the rest was doled out to associates as hush money.

Prosecutors charged that Parker used the kickbacks to maintain a lavish lifestyle and to buy luxury goods for himself and his family, some of whom worked for him.

His badges of affluence included a $120,000 Astin Martin sports car with the vanity license plate RECHDXS--wretched excess. He also purchased a $40,000 Maserati, an $80,000 Ferrari and a 42-foot speedboat, which he named Bad Boy.

Evidence also showed that he bought more than $600,000 in jewelry and tens of thousands of dollars’ worth of fine art to help fill his $1.4-million mansion in the exclusive, gated Big Canyon area of Newport Beach.

Former colleagues said that Parker and his cronies would pile into their fancy cars and head off to Nevada on what they called “road trips,” a term they took from the movie “Animal House.” They drove fast, drank and wagered at Lake Tahoe, where Parker gambled away as much as $500,000. He once took the company jet to Las Vegas just to pay a traffic ticket.

Former colleagues testified that they heard Parker boast, “If you want to succeed in business, you have to break the rules.” Parker denied ever making such a statement.

Parker acknowledged paying kickbacks to Columbia Savings officials, though he maintained that he thought they were at fault, not him. He testified that he knew regulators would eventually discover the discrepancies on the books of the Beverly Hills thrift and would simply ask him to return the money.

Parker’s primary defense was that he was duped by one of his closest friends, Brian W. Fink of Orange, who was the company’s vice president. Parker said that Fink concocted nonexistent deals with Columbia, instead of simply overcharging the thrift to provide larger tax breaks for Columbia and kickbacks for them.

That testimony brought a mocking disbelief from Asperger, who asked Parker, “He perpetrated a massive fraud to make you rich?”

Parker retorted, “Yes, that is what I am saying.”

Parker’s success hinged, however, on Columbia Savings, which accounted for 80% of his business. To create new deals with Columbia, Parker said he was forced to pay a 1% kickback to one of the S&L;’s vice presidents, Jeffrey S. Worthy.

Worthy previously pleaded guilty to accepting $1.4 million in bribes and kickbacks. Fink, who testified against Parker at trial, pleaded guilty to accepting about $1 million.

Parker testified during his trial that he knew he could stop the illicit dealing with Columbia, but that his own ego got in the way.

“I didn’t want to lose all that stuff,” he said. “I didn’t want to lose my position, my status, my company, everything I had worked for.”

Michael Parker’s Trail to Jail

Feb. 27, 1991: A yearlong federal investigation leads to the arrest of Michael E. Parker, founder of Parker North American Corp., and Jeffrey S. Worthy, a Columbia Savings & Loan vice president, on charges that they bilked a Beverly Hills thrift of more than $11 million from 1983 to 1987.

Worthy is released on bail while Parker, declared a flight risk, remains in custody. A third suspect, Brian W. Fink, a former PNA vice president, waives indictment and is not arrested.

The federal Office of Thrift Supervision announces that it will seek $25 million in restitution on behalf of the defunct thrift from Parker, Worthy and Fink.

March 4, 1991: Parker pleads not guilty to 46 counts of racketeering, money-laundering, paying and receiving kickbacks, bank and tax fraud. Worthy pleads not guilty to similar charges.

March 22, 1991: Parker is released on $1-million bond.

April 22, 1991: Fink pleads guilty to two felony charges in return for prosecutors’ filing no additional charges against him.

Nov. 5, 1991: Worthy pleads guilty to two charges in an arrangement similar to Fink’s.

Feb. 19, 1993: Parker is indicted in Las Vegas for defrauding First Interstate Bank of Nevada of nearly $8 million in a similar scheme. He pleads not guilty.

March 17, 1993: Testimony begins in Parker’s trial in the Columbia case. Counts against him are reduced from 46 to 39.

April 14, 1993: Parker testifies that he participated in kickback scheme with thrift executives but did not think it was illegal.

April 28, 1993: Parker is found guilty on 36 of 39 counts.

Source: Times reports

Researched by JANICE L. JONES / Los Angeles Times