Los Angeles County - News from Feb. 12, 1996

Mustang Ranch: Lawyers for investors in Beverly Hills-based Mustang Development Corp. will ask U.S. District Judge John G. Davies in Los Angeles to appoint a receiver to take control of Mustang and its 65 oil and gas partnerships. According to a class-action lawsuit filed earlier this month, about 6,000 people, many of them elderly Southern Californians, may have lost $60 million to $165 million in a Ponzi scheme. A federal court has already frozen the assets of Mustang and its owner, Neal Stein. Investors claim that very little of the millions of dollars raised by Mustang were ever invested in gas and oil properties. Instead, the suit alleges, Stein and others took the money for themselves and for earlier investors who were owed interest payments. The hearing is scheduled for 1:30 p.m. today in U.S. District Court in Los Angeles.