2 Arrested in Irvine in Investment Scheme : Inquiry: Police say an elderly woman promised 11% returns was bilked out of $80,000 by a firm unlicensed to sell securities.

A Buena Park resident who was a Los Angeles reserve police officer was arrested in connection with a scheme to bilk an 80-year-old San Francisco woman suffering from Alzheimer’s disease out of $80,000 by promising high returns from investments that were never made, investigators said Tuesday.

Police arrested Thomas William Wright, 31, Friday afternoon at an office in Irvine where he and a 26-year-old partner, Anthony Price, had set up an investment business.

Irvine Police Investigator Denny Jenner said the three investment companies set up by the men were unlicensed to sell securities, and that one of the investment companies was used to defraud Mary Palladino of more than half her life’s savings.

Police said Wright resigned after his arrest Friday as a reserve officer for the Los Angeles Police Department, where he had served two years at the department’s Rampart station.

His partner Price was arrested Friday at the Irvine Police Department after he was lured there by investigators who told him that his office had been burglarized and they needed him to identify some property.

The men are being held at the Orange County Jail in lieu of $150,000 bail each on suspicion of stealing from a dependent, grand theft and conspiracy. The investigation is continuing to determine if there are other investors, police said.

“At this point, it doesn’t appear there were any investors from Irvine,” Jenner said. “We do believe that a similar type of scheme was going on in Oklahoma, and we are in the process of contacting possible victims there.”

Palladino was first contacted by the men more than a year ago to invest in oil and gas securities that promised an 11% return, police said. She was suffering from Alzheimer’s disease at the time and may not have been able to make financial decisions, investigators said.

She died in October after falling from a staircase, said her niece, Denise Meschi. Palladino apparently did not receive any interest payments, she said.

Police said the investigation started after broker Peter Keating, of Paine Webber’s San Francisco division, became suspicious when Palladino went to his office with Wright to cash out her entire $140,000 account in December, 1993. Keating told Palladino the money couldn’t be gathered that quickly.

Keating then contacted Meschi. Meschi visited her aunt but couldn’t convince her that she shouldn’t sign checks over to Liberty International Acquisitions, one of the men’s three investment companies. The two other companies were Woodbury Financial and Consolidated Energy, Jenner said.

Palladino returned to Keating’s office a few days later with Wright to withdraw $5,000, which was transferred to Liberty International, according to police.

Investigators said Palladino wrote a $25,000 check to Liberty International.

Jenner said investigators found other transfers and checks that amounted to about $50,000.

San Francisco police started the investigation in January, 1994, after Meschi reported the Liberty International transactions. Irvine police were asked to help.

Police seized three computers and several boxes of records, Jenner said, adding that no money was recovered during the raid.