Man Convicted of Defrauding 100 Victims Out of $3 Million : Crime: Officials say self-styled franchise expert Don David Wilson promised investors brand-name items but sent worthless goods. He targeted the elderly, they say.

A self-styled franchise expert from the San Fernando Valley was convicted Friday of defrauding more than 100 victims out of $3 million they sent him to set up their “impulse product” businesses.

Authorities said Don David Wilson and his Sherman Oaks and Encino companies especially targeted the elderly, telling them they could augment their retirement income by setting up display racks in stores with heavy foot traffic.

Instead of getting brand-name items such as hosiery, batteries and disposable razors as promised, the victims--many of whom paid Wilson’s companies more than $30,000 apiece--received worthless items that few stores would even let them display, such as cheap pen and pencil sets, kiddie jewelry, self-help tapes and solar barbecues, according to Assistant U.S. Atty. Diane Hawkes Birnholz.

“He was in charge of a very devious scheme,” said Birnholz, a prosecutor with the Justice Department’s Major Frauds Section. “He used his franchise expertise to scam victims across the country. They ended up getting mostly cheap plastic buckets filled with pens.”

Authorities have identified more than 100 victims. Birnholz said Wilson and his companies “targeted victims from as far away from California as they could,” so the people could not track them down.

Wilson, who was indicted in December, 1992, was a fugitive for a month, until he was stopped for speeding in Texas. When his Jeep was searched, authorities found brochures of vacation spots in Mexico and a map showing a highlighted route from Texas to Guadalajara, Birnholz said.

“We had reason to believe he planned to flee to Mexico,” she said, although he was not heading south at the time of his arrest.

Three other people, alleged associates of Wilson, will be tried in a case scheduled to begin June 1.

After hearing testimony during 3 1/2 weeks of trial, the jury deliberated for one day before convicting Wilson. He faces a maximum 60 years in prison and $2.5 million in fines, Birnholz said. She said authorities are now trying to locate his assets and those of his companies so victims can be repaid. Among the companies Wilson set up were Great American Service Merchandising Corp. and P.O.P. American Corp.

“At this point I don’t have any information about his ability to pay restitution,” Birnholz said.

Wilson was convicted of eight counts of mail fraud and two counts of interstate transportation of money obtained by fraud. The case also was investigated by the Federal Trade Commission, the Internal Revenue Service and the U.S. Postal Inspection Service.

Authorities said Wilson printed up slick brochures and took to the radio and TV airwaves to solicit investors, offering them a franchise for an initial investment of $28,480 plus additional money over time for the products. Prosecutors said Wilson used numerous aliases, and created an elaborate system of phony franchises around the country to create the illusion of a nationwide network of successful businesses.

“They created a network of false franchisees to give glowing reports of their success,” said Birnholz. “But the stories were all false.”

Those products that the buyers did get, including the pen and pencil sets, were of poor quality. Others, such as solar barbecues priced at $29.95 each, “did not do very well,” she said.

The scheme was in operation from 1982 to 1988, authorities said. Wilson and other alleged conspirators promised to train clients in the operation of a franchise business, and promised each of them as many as 10 consignment locations with high foot traffic, such as liquor stores, supermarkets and mini-marts.

In reality, the franchise buyers found that the only merchants who had agreed to display their products for a share of the profits were “tiny, dirty shops” that few customers frequented, Birnholz said.

Prosecutors also alleged that when enough franchisees began complaining about Wilson and authorities began investigating, he and his associates would shut down and begin anew, under a new name, in a different location using new aliases.