3 Valley Men Are Arrested in Series of National Loan Swindles : Crime: Officials say the trio allegedly used newspaper ads and toll-free phone numbers to suck hundreds of victims into a classic scam.

Saying they preyed on those desperate for cash during the prolonged recession, authorities have arrested three San Fernando Valley men who they allege used newspaper ads and toll-free phone numbers to suck hundreds of victims across the country into a classic loan swindle.

Walter Brown, 39, of Van Nuys, and Earnest Strader, 30, and David Allen Straughter, both of North Hollywood, had been charged in May with participating in a series of allegedly related loan swindles, which authorities said began in early 1992. But those criminal charges weren’t announced until Tuesday, the day after the men were arrested by federal authorities in Winnetka and West Los Angeles.

The men each were being held in lieu of at least $70,000 bail, and they were set to be arraigned as early as today.

“These folks were preying on people who needed cash,” said Deputy City Atty. P. Greg Parham, a prosecutor in the City Attorney’s Consumer Protection Unit, who is handling the case. “It’s a classic advance loan fee scam.”

The men were believed to have worked together and with additional conspirators on a series of major loan scams, which began with running classified ads in weekly and daily newspapers around the nation, Parham said.

With ad slogans such as “Personal Loans. Bad Credit Okay. Easy to Qualify,” they invited people to call the toll-free 800 telephone numbers to obtain loans, Parham said. When the victims responded, he said, they were told they qualified for a loan, but that to get it they had to send a money order or cashier’s check for at least $250 by overnight delivery.

Some victims were told the money would be used to pay loan processing fees, while others were told the money would pay for loan insurance. But they had one thing in common: None got any loan in return, Parham said.

“Hundreds of people around the country fell for the scam,” he said.

Authorities said the three men operated their telemarketing schemes through leased offices and instructed victims--from as far away as New York and South Carolina--to send their money to private mail boxes they rented in the Los Angeles area.

“They’d usually move one or two weeks ahead of law enforcement activity,” Parham said. “They were always ahead of investigators. They would just work an area for a while and then move on.”

Overall, authorities believe the loan scam netted at least $250,000, although it was not immediately known how much the three men may have made.

Although the men are believed to have worked together, they used different fictitious business names and sometimes used each other’s given names. None of the companies had published phone numbers, and authorities said there are many unrelated, and legal, companies with similar-sounding names that are listed.

Brown did business as West Coast Financial and California Financial Services, both based in Van Nuys, according to authorities. Strader, also known as Spencer R. Straughter, and Straughter, also known as David Strader, did business as California Securities, which authorities said operated first in Inglewood and later in the Crenshaw district of Los Angeles.

Strader also did business as U.S. Financial, which was located in the same building as California Securities, authorities said.

Straughter and Brown also did business as Financial Services, at first in Santa Monica and later in Pacoima and Sherman Oaks, authorities said.

On Tuesday, authorities said criminal investigations of the alleged loan scams continue, and that they are searching for several other suspects.

Strader and Straughter were arrested Monday morning in West Los Angeles by the FBI and members of the Los Angeles Police Department’s Fugitive Detail. Brown was arrested Monday at 10:30 p.m. at his Winnetka home by U.S. postal inspectors, which conducted the investigation with the FBI.