35 From Southland Indicted in Nationwide Bankruptcy Fraud Crackdown

For Kurken Alyanakian, a building contractor in Sun Valley, the nightmare started in May 1993, with an early-morning phone call from Dun & Bradstreet, the business information firm.

“Your company just filed bankruptcy,” the caller said. “What’s your status?”

In fact, Alyanakian’s construction business was doing reasonably well, considering the weak economy. What he quickly learned was that a wealthy businessman with whom he had been sparring in court had escalated the conflict by falsely petitioning Alyanakian’s company into bankruptcy.

The action nearly ruined both the business and Alyanakian’s life.

“The amount of pain it has caused . . . I look back on it and I’m just shocked,” Alyanakian said in an interview Thursday.

Alyanakian thus could take some satisfaction from the federal indictment this week of businessman Yasuhiro Ikeda on bankruptcy fraud charges.

Ikeda, 41, a Japanese national with a home in La Canada Flintridge, could not be reached for comment. He was one of 35 people indicted in Los Angeles as part of a nationwide crackdown on bankruptcy fraud announced Thursday in Washington by U.S. Atty. Gen. Janet Reno and in Los Angeles by U.S. Atty. Nora M. Manella and FBI Special Agent in Charge Charlie Parsons.

One fact that emerges from the ongoing investigation--dubbed Operation Total Disclosure--is that Southern California remains not only the nation’s bankruptcy capital but its bankruptcy fraud capital as well. Of the 95 indictments and 110 defendants disclosed nationally, a third of the cases--31 indictments naming 35 people--were filed in Los Angeles.

Those indicted in California run the gamut from rich to poor, and their alleged schemes range from the inspired to the merely brazen. The charges include making false statements in connection with a bankruptcy filing, concealing assets, using a false Social Security number, filing under a false name and using bankruptcy filings to dodge foreclosure.

One defendant in Moreno Valley allegedly avoided eviction from a room in a Motel 6 for six months by filing a series of bankruptcy petitions.

Federal authorities suspect as many as one in 10 bankruptcy filings may involve fraud, Manella said at Thursday’s news conference.

With 81,677 bankruptcies filed in U.S. Bankruptcy Court in Los Angeles last year--about 10% of all filings nationally--there are far too many cases for investigators to handle with limited staffing, she said.

However, she said she hopes the publicity surrounding the crackdown will make people think twice before committing fraud. The felony charges carry five-year prison terms and fines of up to $250,000. The defendants are to be arraigned in the next three weeks in Los Angeles, Santa Ana and Riverside.

Maureen A. Tighe, who heads the U.S. attorney’s bankruptcy fraud task force in Los Angeles, said it is important to go after motel deadbeats along with millionaires so that the public gets the message that lower-level crooks are not exempt from prosecution.

In California, the accused include “doctors, lawyers and Indian chiefs,” said the FBI’s Parsons, quickly correcting himself to note that defendant Clive “Sonny” Miller of Palm Springs is not quite a chief but is a member of the Morongo Tribal Council.

Miller, 55, is charged with concealing from Bankruptcy Court a new Mercedes-Benz 500S and about $700,000 he received from the company operating the tribe’s casino off Interstate 10. Attempts to reach Miller for comment were unsuccessful.

The case that involved the largest amount of money is that of Gary and Divine Grace Lazar of Anaheim Hills, who ran a string of more than 200 service stations and are now serving eight-year state prison sentences for selling adulterated gasoline and violating pollution and tax laws.

The Lazars, in the federal indictment, are accused of secretly transferring several million dollars from the gas station company into secret corporations and accounts they controlled but did not disclose when they filed for Chapter 11 bankruptcy protection.