Embezzlement Suspect Claims Raid on Home Was Illegal : Courts: Former head of Costa Mesa group that claims Holocaust accounts exaggerate is being investigated in connection with missing $7.5 million.

TIMES STAFF WRITER

The former leader of a Costa Mesa group that claims accounts of the Holocaust are exaggerated tried to convince a judge Thursday that Costa Mesa police and other agencies illegally seized bank statements, guns and other property during a recent raid on his home.

Police seized the property from Willis Carto's home and the home of his associate, Henry John Fischer, both in northern San Diego County, in March during an investigation into whether the two embezzled $7.5 million from the Legion for the Survival of Freedom.

The Legion is the parent company of the 17-year-old Costa Mesa-based Institute for Historical Review, a think tank that is considered a leader in the international Holocaust denial movement. Carto, 68, founded the group but was ousted in October, 1993.

His attorneys argued that the search warrant that allowed police to break into his home should never have been issued because it contained lies made to police by current leaders of the institute about the alleged embezzlement and omissions of important facts.

"The facts just aren't there," said Randall S. Waier, a Newport Beach attorney representing Carto. "It's all hearsay upon hearsay upon hearsay."

A quashing of the warrant would mean the return of all the property and a blow to the ongoing investigation that has yet to produce charges, according to court documents and attorneys.

Carto's attempt to invalidate the warrant is his second in the past month, said attorney Michele Vadon, who is representing the city of Costa Mesa and its police department. Carto also filed suit against the city in April in Orange County Superior Court alleging civil rights violations stemming from the raid on his home.

Carto "seems to think the best defense is a strong offense: file a civil rights suit, challenge the warrant, sue everyone and maybe they'll go away," Vadon said. "But we're not going to go away. There is no doubt. The documents are very clear . . . Carto took the money."

Harbor Municipal Court Judge Susanne S. Shaw, who issued the search warrant in March, continued the hearing to Friday. During the hearing Thursday, however, Shaw made it clear that even if the accusations of embezzlement are false, that is not enough to invalidate the search warrant.

Attorneys for Carto will need to prove that former police investigator Larry Rooker, who headed the investigation at the time and drew up the "statement of probable cause," intentionally lied to her or withheld pertinent information to get the warrant.

The institute contends the money was left to their parent organization in 1985 by the estate of Jean Farrel Edison, the grandniece of Thomas Edison, the inventor. The money was in four safe deposit boxes in Switzerland, Asia and the United States. Carto and Fischer went to Switzerland to handle the inheritance, but the group contends the money never made it to the institute.

Another of Carto's attorneys, Mark Lane, denied outside the courtroom that Carto did anything illegal with the money. He contended that a large portion of the bequest did go to the institute.

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