Moorpark Councilman Pleads Guilty in Illegal Loan Case : Government: Scott Montgomery resigns and admits that taking $3,500 from a trash hauler was a conflict of interest.

After agreeing to resign immediately, Moorpark City Councilman Scott Montgomery pleaded guilty Thursday to felony conflict of interest for accepting a $3,500 loan from a Ventura County trash hauler, then voting on the company’s contract extension last year.

Scheduled to testify before a county grand jury for the third time Thursday morning, Montgomery, 42, instead met with prosecutors and agreed to plead guilty to one felony and one misdemeanor count of financial conflict of interest by a public official.

As an admitted felon, Montgomery was obligated to resign from all of his elective and appointive positions--including his council seat in the rapidly growing suburban community of Moorpark and another position as a member of a Ventura County trash agency.

His pleas represent the first successful prosecution of a Ventura County city council member since 1987, when another Moorpark councilman was found guilty of embezzlement.

Montgomery, a sales manager for a computer printer company, stood expressionless as Municipal Judge Thomas Hutchins confirmed conditions of his plea at a mid-afternoon arraignment. Then he repeatedly refused comment as he walked quickly to the nearby County Jail, where he was booked and released on his own recognizance.

He faces a maximum penalty of 3 1/2 years in jail and a $1,000 fine when he appears for sentencing Nov. 21.

Prosecutors, Montgomery and his attorney, Daniel J. Schmidt, all refused to say whether the councilman could have faced additional charges if he had been indicted.

“We can’t comment on that . . . until after he is sentenced,” said Jeffery G. Bennett, chief deputy district attorney.

“We’re not going to have any comment today,” Schmidt said. “That day will come.”

But last week, Schmidt said he thought prosecutors’ aggressive questioning of Montgomery in grand jury sessions was an attempt to get his client to perjure himself. And in a hallway conversation with prosecutors Wednesday, the councilman appeared frantic and asked for an immediate meeting. “I could go to jail,” he said.

Even before Montgomery’s court appearance, he sent a letter to the Moorpark city clerk, resigning his seat on the Moorpark council and several city commissions.

City officials who have served with the two-term councilman said they were stunned by Montgomery’s sudden plea and resignation. Most declined to criticize him, instead focusing on his seven years on the council. He is credited with bringing a shopping mall to downtown Moorpark.

Ending a 10-month political corruption inquiry first reported by The Times last spring, Montgomery acknowledged that he broke state law when he borrowed $3,500 from Manny Asadurian Sr. in July, 1993, and then voted to extend the trash hauling contract of G.I. Rubbish, a firm in which Asadurian had a large financial interest.

“Evidence indicated that Montgomery was aware of Asadurian’s interest at the time of the vote,” Bennett said.

Although Montgomery told district attorney’s investigators and the grand jury he received the money as payment for installing a computer and software for Asadurian’s company, Asadurian said it was a short-term loan that he was waiting to be paid back.

Daryl Kelley is a Times staff writer and Scott Hadly is a correspondent.