Harsher Terms Are Urged for Hernandezes : Courts: The couple embezzled $1 million more than thought, and used $80,000 from the sale of a car to try to buy actor Richard Gere’s home even after their arrest, authorities say in papers.

Danny and Susie Hernandez embezzled $1 million more than previously thought from his former employer and even after the socialite couple’s arrests in March, put $80,000 into an escrow account to buy actor Richard Gere’s $1.5-million home, authorities allege.

In court papers, the U.S. attorney’s office has recommended that Danny Hernandez spend between 12 1/2 and 15 1/2 years in federal prison, more than double the sentence suggested by his probation officer. Prosecutors say he has attempted to obstruct justice by concealing his assets.

The government recommends that Susie Hernandez spend between 2 1/4 and 2 3/4 years in prison for her role in setting up bank accounts in her name to stash the money that her husband skimmed from the customers of PGP Industries, a precious metals firm. Probation officers have recommended a lesser sentence but the exact terms have not been revealed in court.

The latest flurry of paperwork by the U.S. attorney’s office in Santa Ana, filed Friday in U.S. District Court, comes days before the Hernandezes are to be sentenced on Monday.

James T. Duff, the Los Angeles attorney representing Danny Hernandez, did not return a call for comment. Susie Hernandez’s public defender, Joan Politeo Freeman, said she had no comment.

The couple are well-known in Orange County’s society circles and became popular for charitable donations. At one time or another, they owned five Mercedes-Benzes, three Rolls-Royces, three Ferraris, one Jaguar, an Aston Martin, a Porsche and a Jeep.

Danny Hernandez pleaded guilty to mail fraud and money laundering. Susie Hernandez pleaded guilty to income tax evasion.

Both have plea agreements with the government that promise their help with a federal investigation into the activities of Danny Hernandez’s former employer, PGP Industries of Santa Fe Springs. Danny Hernandez said PGP executives urged employees to shortchange customers of precious metals. The company has denied the allegation.

In the documents filed Friday, the government alleges that the Hernandez crimes date back to 1987, although the offenses to which they pleaded guilty cover 1989 through 1992.

The pre-sentencing report prepared on the couple alleged they embezzled precious metals from PGP more than 50 times and the loss totaled more than $1 million. The U.S. government says it has confirmed more than a dozen of the transactions--or the sale of 576.7 ounces of gold--and all were made in the name of Susie Amash, Susie Hernandez’s maiden name.

“None of the thefts of precious metals were disclosed to the government by defendants, despite their promises in their plea agreements,” Assistant U.S. Atty. Stephen G. Wolfe wrote.

Wolfe also alleged that two months before Danny Hernandez was arrested in March, 1993, he sold a Ferrari for $80,000. One month after his arrest, he placed the money into an escrow account in an attempt to buy the Hollywood Hills home of actor Richard Gere. Danny Hernandez enlisted help from the daughter of his civil attorney to open escrow for the home but the deal fell through, the government alleges.

As further proof that the couple should serve harsher sentences, prosecutors say Susie Hernandez--while awaiting sentencing--coerced a $2,000 payment from a real estate developer and demanded $8,000 more if he carried out a scheduled foreclosure of their Laguna Niguel property.

Wolfe alleged that Susie Hernandez’s real estate broker called developer Robert O’Hill last Dec. 9 and threatened to file bankruptcy in order to delay the foreclosure the next day if O’Hill did not loan Susie Hernandez $15,000.

The Hernandezes were to have turned over all their assets shortly after their arrests. But they continued to flaunt their lifestyles and, according to prosecutors, hid or disposed of thousands of dollars in assets, including jewelry, custom household appliances and a membership in a San Juan Capistrano country club.

When O’Hill said he would consider a smaller loan, the broker suggested O’Hill come up with $2,000 that day and $8,000 later. O’Hill agreed to put the deal in writing, and when he asked Susie Hernandez if she intended to repay the loan, she said she did not intend to do so and would eventually file bankruptcy anyway, the government alleges in court documents.

“The government takes the position that concealing assets that the Hernandezes have pledged to identify and surrender in criminal forfeiture represents an obstruction of justice,” Wolfe said. “So does lying to the court and the probation office.”