Sentencing Delayed for Financier Who Swindled Senior Investors : Courts: Victims vent their wrath on former head of failed Irvine pension firm in $136-million rip-off. Judge considers giving him stiffer punishment than two partners in Ponzi mortgage scheme.

After nearly five hours of arguments from attorneys, a federal judge Thursday delayed the sentencing of Orange County financier William E. Cooper, who, along with two former partners, has admitted to swindling thousands of investors, most of them senior citizens, out of $136 million in retirement funds.

U.S. District Court Judge John G. Davies said he would sentence Cooper on Feb. 2 at 9:30 a.m., after considering whether to give Cooper a stiffer sentence than other principals in the scam pension company.

Angry investors called the prominent Villa Park businessman a thief when he walked through a hallway to the courtroom. Cooper, 51, flanked by his lawyers and wife, Terri, was greeted with a chorus of boos from about 60 investors who packed the court. Four courtroom guards were called to stand watch.

“He’s taken the life away from a lot of people,” said William Sperry, 58, who said in an interview before the hearing that he lost his entire retirement savings investing in Cooper’s company. “ . . . He’ll probably go to a federal ranch, get a good tan and work on his tennis game. I said, ‘Look me in the eye,’ and he just turned away.”

Cooper, former president of First Pension Corp., a failed Irvine pension firm, pleaded guilty in August to two counts of mail fraud, as did fellow First Pension operators Valerie Jensen of San Juan Capistrano and Laguna Niguel resident Robert E. Lindley. Each faces up to 10 years in jail and a $500,000 fine.

All three have admitted to a federal judge that beginning as far back as 1983 they controlled an elaborate Ponzi scheme that misled clients into investing in nonexistent mortgages and took money from new investors to make payments to earlier ones.

Calling Cooper a “chief of chiefs” in perpetuating the scheme, a U.S. attorney asked the court to give Cooper a stiffer sentence than given his partners. Investigators are requesting that Lindley and Cooper together pay $73.1 million in restitution to investors, which is the amount investors paid into First Pension and its related entities, when they get out of prison.

Though Cooper and Lindley were to be sentenced Thursday, a dispute occurred over what issues should be considered when determining the amount of time they would spend in prison.

Attorneys argued whether Cooper had fully cooperated in turning over assets to investigators, whether interest reported to investors should be considered in calculating Cooper’s sentence and whether he jeopardized the health of a financial institution, called Summit Trust Services in Colorado. The debate raised issues that Davies said he needed more time to evaluate when deciding Cooper’s sentence.

“There are issues here that I need to go over,” said Davies. “We’re dealing with an extremely complex set of rules.”’

Assistant U.S. Atty. Leslie Swain argued that Cooper was the controller and operator of the scheme and thus should receive a tougher sentence than Lindley or Jensen, who is scheduled to be sentenced March 8. She noted that Cooper was the chief executive officer of First Diversified Financial Services, the holding company for all the affiliated companies, and that he supervised an employee who committed wrongdoings, such as diverting money. Furthermore, she told the court, he directed that funds be diverted, an allegation the defendant’s lawyers disputed.

Swain also said that Cooper had a more lavish lifestyle than the others--a fancy home, extensive travel, expensive jewelry and guns, as well as a higher salary.

“In all those ways, Cooper singled himself out as the leader among leaders,” she told the court.

Swain also argued that Cooper, in violation of his plea agreement last year, had failed to turn over titles--to be sold to repay victims--to a $700,000 Villa Park home, condominiums in Maui, Hawaii, worth about $300,000 and a Utah ski lodge also valued in the $300,000s. Instead, Cooper transferred ownership to his wife, who recently filed for personal bankruptcy, she said.

“There has been a systematic failure to return personal assets, for the purposes of making restitution to victims,” Swain said. “The defendant went part of the way (in admitting his guilt) but stopped short when he was asked to give back the money. He failed to live up to his end of the bargain,” she said.

Several angry investors said they would return to see Cooper get justice.

“This is just typical of this case. We’ll be back,” Sperry said. “I want to see him dragged out in handcuffs and his wife crying.”

Some disgruntled investors have taken even stronger action by filing class action suits. A suit seeking to recover $99 million was filed against the First Pension operators charging fraud on Wednesday in Los Angeles federal court.