Anaheim Man Ordered to Pay $20 Million to Investors : Courts: Judge calls former developer a ‘snake oil salesman’ who preyed on the elderly. Plaintiffs are pleased but skeptical about getting money.

A U.S. Bankruptcy Court judge Tuesday ordered former Anaheim real estate developer Donald Hill Williams to pay $20 million to investors in a fraud-riddled scheme that preyed on the elderly.

Judge John E. Ryan castigated Williams for bilking investors in his Hill Williams Development Corp. of $90 million through land investment schemes.

“He preyed on those least able to recover from financial disaster,” Ryan said. The judge called the operation “a classic Ponzi scheme” in which “new money was used to pay old costs,” rather than being invested in real estate development as promised.

Williams left federal court in Santa Ana without comment, but later, his lawyer, William C. Starrett II, said of the decision, “We’re not happy.”

Williams “feels crushed,” Starrett said. “When he listened to the judge describing his activities, they were describing someone he does not know.”

He said it would take Williams, with his current earnings as a construction worker, about 400 years to pay the judgment. Lawyers for the plaintiffs also expressed concern that they might not be able to collect much of the money.

The verdict came in a lawsuit by about 900 investors who alleged that they had been defrauded by the Anaheim company. They alleged that only $5 million of their money was actually invested in real estate and that the rest was used to pay extravagant salaries and other expenses.

Williams had tried to shield himself from court judgments by filing for personal bankruptcy protection, but Ryan lifted that shield in ruling that Williams must repay investors $16 million in actual damages and $4 million in punitive damages.

The judge cited one land deal after another in which he said that Williams knowingly defrauded investors. In each case, he said, Williams took out millions of dollars in loans for housing projects in which only a few units were built--or none at all.

“He didn’t bring the money in from investors to build homes. He brought the money in . . . to keep the business going,” Ryan said. “He did this knowing they were investing in a house of cards.”

Ryan lambasted Williams for his wholesome sales pitch--”he dressed in the red, white and blue”--when, in fact, he was a “snake oil salesman” who made his deals “only to leave the next day with promises unfulfilled.”

Investors and their lawyers raised doubts about whether they can get Williams to pay the damages, but were nonetheless elated.

“It’s a complete and total victory and vindication for the plaintiffs,” said lawyer Ronald C. Colton of Del Mar. “It shows a recognition by the judge that this operation was a fraud and a Ponzi scheme.”

He said his team will try to identify any assets that the onetime high-flying developer might still possess after his empire crumbled two years ago.

Investor Pierce Ostrander, a retired engineer living in Long Beach, described Tuesday’s court outcome as “therapeutic. This was a $100,000 show for me. That’s what it cost me.”

Tom Artingstall, a Yorba Linda retiree, said the verdict was “beyond what I had hoped.”

Ryan’s ruling came a day after a former Williams associate, David A. Colton, filed for personal bankruptcy. Colton, a securities dealer who operated Colton Capital Corp. in Irvine and is not related to the plaintiffs’ lawyer, lists $132,771 in assets and $151,000 in liabilities, most of it due to judgments stemming from Hill Williams.