Clients Sue Tobin Investment in Alleged Fraud

Nearly 400 investors have filed suit against Huntington Beach developer Harold “Hal” Tobin, alleging Tobin and his now-collapsed investment company defrauded them of millions of dollars.

The suit, filed in Orange County Superior Court, claims that Tobin Investment Corp. lured investors with promises of big returns from Tobin’s housing developments in Southern California and Las Vegas. The suit charges that instead of investing the money in the housing projects, Tobin diverted the money for his personal use, paying off earlier investors with proceeds from later investors until the whole scheme collapsed in February 1995.

The suit seeks unspecified damages, but the 400 mostly elderly investors are believed to have lost $45 million to $60 million in the alleged Ponzi scheme.

Tobin could not be reached for comment.

Tobin’s activities have been under investigation by state and federal authorities. The Nevada Department of Business & Industry last year issued an order barring Tobin’s company from selling homes in two Las Vegas projects.

Tobin, a football standout at USC in the 1960s, started out as a real estate agent and small-time developer. He moved on to bigger projects and by the 1980s had garnered a number of prestigious clients.

Through Tobin Investment Corp., Tobin sold lots in seven projects in Southern California and Las Vegas to fund the construction of homes on those lots. On average, investors paid about $150,000, and some early investors saw returns as high as 25%.

But last February, he sent investors a letter explaining that Tobin Investment had run out of money and could not pay its obligations to investors. He proposed that investors foreclose on the properties, most of which were empty lots worth a fraction of the original investment.