Developer Shuts Doors, Stops Interest Payments : Finance: Police field calls from nervous holders of notes issued by Newport Pacific, whose founder had a role in a scandal that unseated O.C. supervisor.

Anxious investors in notes issued by a once-thriving Orange County real estate development firm have begun besieging police in Newport Beach and Irvine after the company abruptly shut its doors and stopped sending out monthly interest payments.

Newport Pacific Corp., which once built as many as 2,000 apartments a year in Orange County, closed July 18. Its owner, Magdy Hanna--a figure in the conflict-of-interest scandal that cost County Supervisor Don Roth his job in 1993--apparently has dropped from sight.

As recently as May, however, Newport Pacific was selling $100,000 investments in its notes, and promising to pay 10.125% interest, as part of a $12-million debt offering, according to one investor.

Sgt. Andy Gonis of the Newport Beach police said that detectives have received a number of calls in recent days from worried investors, but that no one has yet filed a criminal complaint that would enable police to become involved.

Gonis and an Irvine police spokesman said the departments have received a moderate number of calls about the company, which had offices and subsidiaries in both cities.

But Joel Gruber, a Newport Beach mortgage broker who once owned a business called Newport Pacific Mortgage Corp., said he has been logging “an average of 100 calls a day on my answering machine” from worried investors since mid-July, when Newport Pacific Corp.’s monthly interest payments to investors would have been due.

Gruber said he has never been affiliated with Hanna’s companies. He said he closed his business in 1993, but kept the telephone listing.

One of those callers was George Aames, a Rowland Heights attorney who said he invested $100,000 in a Newport Pacific note in May. “I got my first two monthly [interest] payments on time, but the third monthly check never arrived” in July, he said.

Aames said he had heard that Newport Pacific had been sold and that the new owners either would assume the notes or pay off the note holders. “But that’s all just talk,” he said.

At SC Funding, an Irvine company formerly owned by Newport Pacific Corp., an employee said Newport Pacific had closed down and that she had no forwarding address or phone number for Hanna or other officers. She said that Newport Pacific had sold SC Funding on July 18 and that the company’s new owners had no ties with Newport Pacific.

SC Funding and Newport Pacific were located in the same Irvine office building, and most of the listed phone numbers for Newport Pacific’s operating units have been changed to SC Funding’s number. Jeff Grey, interim president of the mortgage company, did not respond to a request for an interview.

Hanna, who started Newport Pacific in 1983, specialized in selling limited partnership investments to finance his apartment developments.

He was a major apartment builder--and political contributor--in Anaheim in the 1980s. Hanna was one of a number of developers who gave gifts to discredited former Orange County Supervisor Roth. Roth was forced to resign after pleading guilty to charges stemming from his failure to report the gifts from Hanna and others and then voting on projects that benefited his secret benefactors.

At Kemp, Cook, Redmond, a Fullerton brokerage that was selling Newport Pacific’s notes, and United Pacific Securities, the Carlsbad investment firm that helped underwrite the recent $12-million issue, principals reportedly were in conference late Wednesday.