First Pension Execs Agree to Plead Guilty : Investigation: The U.S. attorney’s office said the pleas will be entered when criminal charges are filed in the case.

William E. Cooper, founder of failed First Pension Corp., and his two partners have agreed to plead guilty to expected criminal charges stemming from a federal investigation into the disappearance of more than $100 million at the Irvine-based pension management firm, prosecutors said Wednesday.

Cooper, along with Robert E. Lindley and Valerie Jensen, have signed agreements to cooperate with the U.S. attorney’s office in Los Angeles, while also agreeing to enter guilty pleas to as-yet-unspecified charges, said Leslie Swain, an assistant U.S. attorney in Los Angeles.

“We are going to proceed with their cooperation and try to get this thing unwound,” Swain said. “They won’t be entering their guilty pleas until we file formal charges.”

Swain would not specify when criminal charges will be filed but said the three will probably face fraud or related charges. Swain’s remarks were confirmed by the defense attorneys.

Jensen’s attorney, Don Smaltz, said Jensen has been cooperating with federal authorities by providing documents and information since May 17.

“She was a very decent person and got sucked into this. She was a watcher. . . . She was not the director or the leader,” Smaltz said. “She didn’t want to leave (First Pension), because she was afraid pensioners would lose everything.”

James Joseph, trustee for the First Pension bankruptcy, hailed the cooperation agreements as a sign that investors may finally get some answers.

“That’s quite a significant development,” Joseph said. “I would hope now that they will have to cooperate with me.”

The Securities and Exchange Commission has alleged that First Pension’s owners operated an elaborate pyramid scheme, leading clients to invest in mortgages that did not exist. As much as $124 million of the money invested by 8,000 clients may have been lost to fraud and outright theft, investigators say.

First Pension filed for Chapter 7 bankruptcy April 22, just as scores of investors who had accounts once valued at $350 million discovered that substantial sums were missing.

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In another development, the three owners may help First Pension clients recoup some of their investments by surrendering their stakes in two other Orange County businesses that were said to be partially funded with investors’ money, defense attorneys said.

Investigators are now analyzing the best way to maximize the assets of the two companies, the defense attorneys said.

According to Russell Hayman, attorney for Lindley, funds were diverted from First Pension’s parent company, First Diversified Financial Services, to create Amerispec, an Orange-based company with more than 200 home inspection franchises and assets of $2.5 million.

The money was also used to create National Identification Systems in Irvine, which has a $3.2-million contract to make driver’s licenses for the state of New York.

The investments were intended to help First Diversified cover investors’ losses in mortgage pools, Hayman said.

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Now, he said, prosecutors “are looking at liquidating the assets, but selling the furniture and the computers may not provide much relief for investors. It might be better to give investors some kind of stake in the two companies.”

The U.S. attorneys’ office said it could not comment on the two companies or reveal whether further assets are available.