Fraud Complaints on the Rise, Reports D.A. : Enforcement: Nearly 1,200 letters poured into the consumer protection unit in Santa Ana last year. Prosecutors say the number and variety of scams have increased as the recession continues.

By E. J. GONG JR

Feb. 13, 1994 12 AM PT

TIMES STAFF WRITER

SANTA ANA —

Last year, nearly 1,200 letters poured into the Orange County district attorney’s office’s Consumer Protection Unit. People complained about dishonest mechanics, unlicensed doctors, phony sale prices advertised by department stores and even a Huntington Beach taco stand that was accused of skimping on the beef in its “macho” burrito.

And prosecutors say the number of complaints has increased as Southern California’s recession persists.

“It seems like when the economy is slow, people are reaching a little harder for money,” said Deputy Dist. Atty. Jane L. Shade. “You tend to see more scams.”

Shade is one of two prosecutors assigned to the consumer protection unit, which files about 50 cases a year, cracking down on businesses big and small.

Recently, prosecutors collected a $310,000 settlement from Montgomery Ward, which was accused of falsely advertising that home furnishings were “on sale” when in fact the items were regularly sold at the “sale” price. Without admitting any wrongdoing, Montgomery Ward agreed to alter its practices and pay the civil penalties.

The unit also prosecuted Thanh Son Tofu, a one-room, Garden Grove food company accused of selling tofu and other soy bean products manufactured under filthy conditions. Company officials have declined to comment about the lawsuit, which was filed in December. The case was later settled when the owners agreed to make improvements in their operation.

The size of the companies targeted varies, but prosecutors say there is a common thread in the cases.

“They have the potential for harming a significant number of people in the community,” said Deputy Dist. Atty. Robert Gannon, who heads the consumer protection unit.

Last year, for instance, the consumer unit filed a lawsuit against a small, independently-owned gas station in Anaheim that was accused of rigging its pumps so that customers paid for a full gallon, but received less.

“It might have been just one station, but since it had a high volume of distribution, the potential for shortchanging the public was very significant if left unchecked,” Gannon said.

The company, D&H; Service Center, reached a settlement with the district attorney’s office, and as part of the deal, they agreed to regular testing of its pumps.

Other cases are potentially more dangerous. Prosecutors filed a lawsuit in March against an Anaheim X-ray center, alleging that employees performed mammography exams without properly certified equipment and that the center presented a potential health risk for hundreds of women.

Advanced Professional Imaging Medical Group has denied any wrongdoing, and the case is pending.

Prosecutors Gannon and Shade, who work in the 8-year-old consumer unit, say they keep an eye out for a variety of abuses, including unfair or illegal business practices, false advertising and public health and safety dangers.

The consumer protection unit receives tips of business wrongdoing from government agencies as well as from citizens who feel they have been cheated. Because of the volume of complaints, the unit requires written statements sent to the Santa Ana office. Phone-in complaints are discouraged.

Barbara Kaeni said she is glad she sent her complaint in October. Kaeni, a property manager for Pinnacle Holdings, a Newport Beach real estate company, said she placed a classified ad in a local newspaper about job openings.

Shortly after, Kaeni said, she received what looked like a bill from a company called Employment Classifieds, asking for several hundred dollars. Assuming it was the newspaper’s invoice, Kaeni said she was prepared to pay it until a secretary read the fine print.

It was not a bill, but was a solicitation from another company.

“I was really aggravated and indignant to see the length someone went to to make it look like a bill,” Kaeni said. “They even used the exact words from my add on their invoice. I’m glad the DA is going after these people. It’s wrong what they’re doing.”

Prosecutor Shade said she received nearly a dozen other complaints about the Santa Ana-based company, Employment Classified, USA. Shade said she filed a lawsuit against the company and that the case is pending.

The company’s owner, Erica Kortje, could not be reached for comment.

Statewide, consumer fraud complaints also are increasing, according to Senior Assistant Atty. Gen Herschel Elkins, who heads the state’s consumer laws section in Los Angeles.

“The numbers are definitely going up. We now have consumer fraud units in more than half the state’s 50 counties, including small ones like El Dorado and Contra Costa,” Elkins said.

Due to county budget cutbacks around the state, Elkins said, many consumer units have shrunk, while others, such as the one run by the Los Angeles County district attorney, have expanded because prosecutors have been able to juggle resources.

Gannon, who has been head of Orange County’s unit for nearly two years, said he hopes to add two or three more prosecutors to his office to meet the high volume of complaints.

Money from settlements collected from businesses is used to pay for investigations, to reimburse consumers who were ripped off and to contribute to Orange County’s general fund, he said.

A 12-year-veteran of the district attorney’s office with stints in the homicide and sexual assault divisions, Gannon said said he enjoys the diversity of issues in the consumer unit compared to homicide, where “you always know the main witness will not be testifying.”

Shade has worked for the district attorney’s office for eight years, including handling juvenile and sexual assault cases. Shade said she receives “personal satisfaction” when working on cases that deal with health issues.

In December, Shade settled the suit involving the Garden Grove tofu store, where employees allegedly sold tofu and soybean products that she said “may have become contaminated with filth.” Shade said insects and rodents had been seen scurrying across the company’s floors.

“If you’re a victim of a crime in a traditional sense, at least you know you’ve been victimized because you might be injured or your car might be missing,” she said.

“But others violations are more subtle. People may never be aware that the food they eat or the vitamin they swallow is unhealthy.”

Where to Turn

If you believe you’ve been a victim of false advertising or unfair business practices, send a written complaint to:

Orange County district attorney

Major Fraud/Consumer Protection Unit

405 W. 5th St., Suite 606

Santa Ana, CA 92701

Other agencies you can call, depending on your complaint:

* California Bureau of Automotive Repair (800) 952-5210

(car repair problems)

* Better Business Bureau (714) 527-0783

(businesses practices)