First Pension Investors Allege Inaction by State : Finance: Victims of swindle say agency failed to probe irregularity, causing $15 million in losses. Lawsuit would be next step.

Investors in scandal-scarred First Pension Corp. have filed a $15-million claim against the state--a prelude to a lawsuit--accusing the Department of Corporations of failing to investigate the company’s wrongdoing in 1992 and failing to warn investors.

The claim, filed late Wednesday with the State Board of Control, is based on a letter that a former First Pension employee sent to the state long before the Irvine company collapsed in April, 1994, under the weight of a scam that took $136 million from about 8,000 investors.

The Nov. 10, 1992, letter by Pamela Reiter stated that the company forged agency letterheads and business cards and hired an actress to impersonate an agency auditor in an event staged to look like a Department of Corporations audit.

“I believe that the purpose of the staged, phony Department of Corporations audit was to allay the fears of investors and cover up other wrongdoing by the company,” the letter stated.

A department official didn’t quibble about the facts.

“A letter did come to the agency, and there was no investigation,” said Brian Thompson, chief deputy commissioner. “A determination was made early on that the matter was rather stale because it referred to an incident that happened in [January], 1990.”

Thompson said the agency’s enforcement division receives numerous complaints daily--nearly 20 every work day--and has limited resources to investigate.

“We have hundreds and hundreds of complaints that refer to more current events and are very deserving of the department’s attention,” Thompson said.

Lawyers figure that investors lost $15 million between the time that Reiter sent her letter and the company collapsed 17 months later. Wendy Tucker, one of the lawyers, said the state has 45 days in which to respond before a lawsuit can be filed.

Tucker said lawyers didn’t know about Reiter’s letter until they searched court records and found a wrongful-termination lawsuit she had filed after sending the letter to the state. The lawsuit against the company, First Pension founder William E. Cooper and others, also accused them of sexual harassment and discrimination.

Her lawyer, Philip J. Ganz, said she was dismissed because of her complaints about sexual harassment and discrimination and her knowledge about possible wrongdoing.

“As far as the company was concerned, she was a gossip and the company wouldn’t tolerate that,” Ganz said. “She had complained about this stuff, and she had been asking too many questions about improprieties.”

Cooper, 51, has admitted that he swindled investors out of more than $136 million in retirement savings through now-defunct First Pension. In February, a federal judge sentenced him to 10 years in prison and ordered him to repay $73.1 million.

His two cohorts, Valerie Jensen, 47, and Robert Lindley, 51, also were given prison terms for their roles in what amounted to a giant Ponzi scheme that misled clients into investing in nonexistent mortgages and took money from new investors to pay back earlier ones.

In Reiter’s lawsuit, Cooper and Lindley eventually defaulted, giving Reiter a judgment for $371,000 in damages and $99,000 in attorney fees. Ganz said he will file a claim soon in First Pension’s bankruptcy case.