Police Say Firm Made Clients Buy Insurance

A Huntington Beach finance company under police scrutiny in connection with a series of violent crimes demanded delinquent borrowers buy life insurance policies naming the company as sole beneficiary, and collected about $2.5 million after the shooting death of a Hollywood record executive, according to sources close to the investigation.

Three Long Beach-area businessmen have told police that Coleman Allen, the late president of Premium Commercial Services Corp., threatened their lives over unpaid loans and used strong-arm tactics to make them take out life insurance policies naming the company as the sole beneficiary, according to a court affidavit filed by a Signal Hill police detective.

The firm also collected on the policy taken out by Barry Skolnick, the 30-year-old general manager of Hollywood Recording Services who was found dead in January, police sources said Thursday.

One man--whom Allen admitted beating with a pipe wrench--told detectives that the company took over payments on the $500,000 policy when he could no longer pay, the court records show. Another business owner told detectives he abandoned his Signal Hill condominium and moved out of state in fear for his life.

The borrowers told detectives they bought policies for three to five times the amount of their debt, according to court records. When asked why, business owner Sandip Sengupta told detectives, “Because that’s how much Mr. Allen told me I had to buy.”

Fountain Valley police said Thursday that the company’s current ownership is cooperating with investigators and seems to be distanced from any possible illegal dealings.

A spokesman for the finance company, Beverly Hills attorney Lawrence H. Nagler, said Thursday that the 13-year-old firm has been maligned by unfair speculation.

“Police investigators have themselves confirmed that Premium operates a legitimate finance company and that here is absolutely no evidence or any connection between any of the alleged criminal activity under investigation and any current owner, officer or director or employee of Premium,” Nagler wrote in a statement.

At the center of the mystery is the company’s former president: Allen, the towering Tarzana man who died last month of heart disease.

Earlier this week, investigators identified the company under Allen’s leadership as the common element in suspected contract hits that claimed the life of a Fountain Valley flight attendant and left a San Clemente man wounded. Los Angeles police also are looking at possible ties to Skolnick’s shooting.

Allen himself led to much of the scrutiny with his attack on Sengupta last year, which piqued the interest of Signal Hill police. Those detectives, intrigued by the unusual business practices Sengupta described, later searched the Premium Commercial storefront offices.

During that search, police turned up more than half a dozen term life insurance policies on several borrowers, including the San Clemente man shot last month, court records show. Such policies are not unusual in the field of lending to small, risky businesses, said Candysse Miller of the California Department of Insurance. But, she noted, those policies typically are for the same amount as the loan.

Signal Hill Police Sgt. James Peterson--himself a licensed insurance broker--noticed the company’s unconventional use of demanding large insurance policies.

“I said, ‘Wait a minute, we have a problem here,’ ” Peterson said. “Unless you’re attuned to how the insurance world operates, it wouldn’t send a red flag up.”

The high amounts of the policies, combined with the fact that Premium Commercial maintained full control of them as the sole beneficiary, “paints a very clear picture from my mind” that something was awry, he said. Because they were term policies, however, the company could not borrow against them.

“The company is paying on a policy, owning the policy that can never be changed or lapsed without their OK and collecting on death,” the detective said. “It raised some questions to me.”

Businessman Brian Baker, the former Signal Hill resident who fled the state after Allen’s alleged threats, is “in absolute fear for his life,” Peterson said after talking to Baker this week. Baker owned the company $88,000; his life insurance policy was for $250,000.

Law enforcement officials said they have no idea how many debtors have taken out life insurance policies with Premium Commercial named as the beneficiary. When Signal Hill police served the search warrant on the company in 1995, investigators seized only a limited number of policies.

Peterson said he contacted all the debtors named in the life insurance policies he seized, including San Clemente resident James Wengert, who was shot in the face April 10. But at the time, the detective knew only of one act of violence committed against a debtor--Allen’s pipe wrench attack on Sengupta.

“I interviewed the people in the documents that were seized. Some of them flat out refused to talk to us, saying Mr. Allen is a great guy,” Peterson said.

“If they did talk to me and they asked the question about their safety, I would give them general security tips. But I did not alarm them, because I had no reason to. It was just a theory that I was continuing to pursue.”

For the pipe wrench attack on Sengupta, an engineering company owner, Allen was ordered to serve three years’ probation and attend anger therapy. Since then, Signal Hill detectives have continued to investigate Allen’s company and its dealings with borrowers.

Premium Commercial also had dealings with Skolnick, the recording executive from Thousand Oaks who was gunned down in a Hollywood parking structure. Skolnick had turned over his company to Premium Commercial to pay off $900,000 in debts.

But Skolnick also owed $600,000 to a creditor for a failed studio business. A few weeks before he was killed, Skolnick’s creditor sued Premium Commercial for a share of that debt.

Documents show that the recording executive had a life insurance policy that named Premium Commercial as the sole beneficiary, sources close to the case said.

Investment researcher James Wengert owed about $400,000 to Premium Commercial at the time of the shooting. His description of the gunman led police to Paul Alleyne--who himself owed $30,000 to Premium Commercial for a loan to his Los Angeles auto parts business.

Alleyne’s arrest in turn led police to another Premium Commercial client, Leonard Owen Mundy, the Los Angeles electrician charged with the June 10 shooting of Fountain Valley airline attendant Jane Carver. That slaying was probably a hit gone wrong, police say.

Police say Margaret Wengert--wife of James Wengert--apparently was the intended target. Both women lived in the same area of Fountain Valley at the time of the killing.

Carver was slain three days after Margaret Wengert filed a lawsuit against Premium Commercial claiming the firm used pressure tactics to take over her Fountain Valley home to cover her husband’s debt, court records show.

Fountain Valley Lt. Bob Mosley said Allen’s widow, Barbara Allen, and Premium’s current president, Jay Olins, have been cooperating with the various investigations. It was Olins who discovered a “highly unusual” loan in company files that led police to Mundy, Jane Carver’s alleged assailant, Mosley said.

“It was a loan that was made basically without the knowledge of Mrs. Allen and/or Jay Olins,” Mosley said. “They had no knowledge of this loan to Mundy. . . . They have certain procedures that the company follows. None of these procedures were followed in this case.”

Mosley said the deal with Mundy appears to have been arranged solely by Coleman Allen. The loan to Alleyne, arrested in the shooting of James Wengert, was similar to Mundy’s, Mosley said.

It remains unclear whether Mundy and Alleyne received loans from Premium Commercial, or whether the recorded transactions were just paper fronts for some other type of arrangement, investigators said.

“We have not been able to confirm that. We’re still digging,” Mosley said. “We’re trying to figure out, where did the money go? Was there money that actually went out?”

Another riddle for police is the true nature of Coleman Allen, a former Air Force high-security specialist in special codes whose own life is difficult to decipher. Described by some as an arrogant bully and others as a compassionate giver, Allen was sometimes a mystery even to his friends.

Harvey Englander, a prominent political consultant in the Orange County, was a friend to both Allen and Allen’s former Premium business partner Robert P. Bernfeld, who is now in prison on bank and tax fraud convictions.

Englander had borrowed money from both and watched as the pair of one-time friends split and, eventually, squared off in court. Afterward, Englander said, his allegiance to Bernfeld strained his relationship with Allen.

In a letter Bernfeld sent to Englander two weeks ago, he wrote: “Cole hurt a lot of people. He broke a blood oath to support my family and he cheated me out of a business. He swindled my widowed mother out of $175,000.”

Even that surprising letter, though, could not have prepared Englander for this week’s revelations, he said Thursday.

“My chin is dropping to the ground,” Englander said. “This is the most bizarre thing. . . . Cole was a very complex guy. He could be really nice and helpful at times and other times he could be mad and tough and physically intimidating.”

Times staff writers Matt Lait, Mark Platte, Dexter Filkins, Greg Hernandez, Michael Granberry and Debora Vrana and correspondents John Cox and Jeff Kass contributed to this report.

* DEBTS KILLED DREAMS: Recording executive found himself in over his head. A28

* SURVIVORS FEARFUL: Wengerts still afraid for lives, grieve for jogger’s family. A29