Still Waiting for Justice

First, they lost their life savings in an alleged land fraud. Now many of the 1,500 or so unsophisticated investors who bought Antelope Valley homesteads from accused swindler Marshall Redman are getting stuck by the system set up to protect them. A judge ruled last week that a receiver charged with sorting through Redman’s estate and making landowners whole in fact misspent more than $1 million and then high-tailed it to Australia.

Meanwhile, the mostly poor families who bought isolated desert land from Redman wait for compensation. To them, the justice system in this case seems more concerned with system than justice--notwithstanding recent efforts by new receivers to get the process moving at a more reasonable pace.

Despite repeated orders from Los Angeles Superior Court Judge Robert H. O’Brien for Donald Henry to answer in court for his actions, the erstwhile receiver has virtually vanished. Henry was appointed to use money from Redman’s holdings to compensate alleged fraud victims and then renegotiate land sales so they were legal. As part of that duty, Henry was supposed to make payments to accountants, banks and other professionals needed to sort through the mess. But none of the payments was authorized by the court. Last year, Henry was removed from the case after federal bankruptcy officials raised questions about his actions. Henry paid himself $128,000 and charged nearly $300,000 more in receivership fees, but is not accused of siphoning money from the estate.

That hardly matters, though. The fact remains that money intended for people who need it instead appears to have been squandered. O’Brien ordered the company that bonded Henry to pay $500,000 to the new receiver, who said last week that the money will be used to help settle the accounts of those who bought lots from Redman.

Late is better than never. This is a complex case--unlike any other in Los Angeles County--and even the new receiver often seeks guidance from the court on how to proceed. Each opinion takes time, but proceeding with caution beats simply spending until the money disappears.