First Pension Officers Agree to Admit Crimes : Fraud: Irvine investment firm founder, two partners sign plea deals on disappearance of clients’ millions.

The three top officers of a failed Irvine pension management company have agreed to plead guilty to anticipated criminal charges resulting from the disappearance of more than $100 million in retirement money invested by 8,000 clients.

First Pension Corp. founder William E. Cooper, along with partners Robert E. Lindley and Valerie Jensen, have signed cooperation and plea agreements with federal prosecutors, said Leslie Swain, 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 may be filed but said the three would likely face fraud or related charges in connection with what securities regulators have described as an elaborate pyramid scheme involving nonexistent mortgages.

In another development, the trio may help First Pension clients recoup some of their investments by surrendering their stakes in two other Orange County business that may have been partially funded with retirement money, according to their defense attorneys.

Cooper’s attorney, Robert C. Bonner, said his client has entered into an agreement with federal investigators and will plead guilty to some as yet unspecified charges. Jensen’s attorney, Don Smaltz, said she has signed a similar agreement and 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.”

And Lindley’s attorney, Russell Hayman, said, “My client has not yet pleaded guilty, but he has entered into an agreement where at some future point he will enter a guilty plea.”

The cooperation agreements were hailed by James Joseph, trustee for the First Pension bankruptcy, who held out the prospect that questions of anxious investors may now be answered.

“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 alleges 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.

Investigators are now analyzing the best way of maximizing the assets of two companies affiliated with First Pension, according to the defense attorneys.

Hayman said funds were diverted from First Pension’s parent company, First Diversified Financial Services Inc., to create Amerispec Inc., an Orange-based company with assets of $2.5 million and more than 200 franchises that provides home inspection services.

Diverted funds were also used to create National Identification Systems in Irvine, which holds a $3.2-million contract to make driver’s licenses for the state of New York.

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

“While these companies may seem small, they are assets,” he said. “The question is whether they could be marketed into something larger.”

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

Thomas E. Carroll, president of 6-year-old Amerispec, said he was unaware of any plan to transfer ownership.

“We have talked to the U.S. attorney’s office and we are a legitimate company and are functioning,” said Carroll, adding that Cooper, Jensen and Lindley stopped being company board members on April 22.

National Identification Systems, with 25 employees, has been under contract with the state of New York to make driver’s licenses since 1992 and plans to expand, according to President John Larner.

“We definitely hope to get more states besides New York,” said Larner, who would not reveal the company’s level of assets or whether it is profitable.

First Diversified continues to have a controlling stake in National Identification, though Larner said that Cooper, Jensen and Lindley had not contacted him in months.