Couple Hid Thousands in Assets, Prosecutors Allege

After their arrests on charges of income tax evasion and mail fraud, Danny and Susie Hernandez hid or disposed of thousands of dollars in assets, including jewelry, custom household appliances, proceeds from an investment in a Los Angeles restaurant and a membership in a San Juan Capistrano country club, federal prosecutors said in court documents Wednesday.

Prosecutors--seeking to keep Danny Hernandez in federal detention in Los Angeles, where he was ordered last week after failing to pay the cost of his electronic monitoring bracelet--filed a declaration in U.S. District Court in Santa Ana alleging that the couple have “frequently concealed and disposed of assets” in violation of their plea agreement, which obligates them to surrender their ill-gotten gains.

Susie Hernandez, for example, declared after her arrest that she only owned $315,000 worth of jewelry and that every piece had been surrendered to the government. Federal investigators claim, however, that she subsequently tried to sell some of her jewelry back to Neiman Marcus at Fashion Island in Newport Beach.

During a lie detector test administered by the FBI two weeks ago, she admitted selling for $12,500 a diamond Parve bracelet purchased for $25,000 to $30,000. She also acknowledged selling for $7,500 a pair of diamond Parve earrings purchased for $20,000 to $30,000.

Susie Hernandez said she could not recall who bought the jewelry.

She also said her husband sold an emerald and diamond necklace that had been purchased for $50,000 to $60,000, but that she didn’t know who bought it or for how much.

Under oath, she also admitted that she attempted to sell $70,000 worth of custom appliances the Mission Viejo couple had purchased for a second home in Laguna Niguel. The appliances, in storage, were never sold.

The couple were arrested in February in connection with the disappearance of nearly $8 million from accounts of a Santa Fe Springs precious-metals firm where Danny Hernandez worked. He pleaded guilty to mail fraud and money laundering. Susie Hernandez pleaded guilty to income tax evasion.

Federal authorities said Danny Hernandez also holds a $30,000 membership in the Marbella Golf and Country Club in San Juan Capistrano and continued to pay dues and charge expenses to the club until he was placed under house arrest in September. Hernandez never disclosed the membership to federal officials. He also received distribution checks worth $6,000 from an investment in a Los Angeles restaurant and never disclosed the proceeds, the government said.

James T. Duff, an attorney for Danny Hernandez, did not return a call for comment Wednesday. Joan Politeo Freeman, a federal public defender who represents Susie Hernandez, said the government’s declarations contain “inaccuracies and misrepresentations.”