O.C. Man to Repay Ostrich Farm Investors

A Mission Viejo man who billed ostrich farm investors for food and board for nonexistent birds has agreed to pay back $25,439 to investors, the Securities and Exchange Commission said Thursday.

A federal judge in Santa Ana also enjoined Michael S. Whitney, 46, from future violations of federal securities laws. Whitney, who neither admitted nor denied the allegations, was the last of four principals of the Ostrich Group Inc. to face SEC charges of fraud.

The agency charged that the group sold contracts in the ostrich-breeding business while “transferring most of the funds to themselves and their family” instead of buying the birds.

The Ostrich Group raised $800,000 from more than 80 investors, saying their ostriches would be “generating substantial cash-flow revenues in a very short while,” the SEC said.

“They told investors they had 247 breeder ostriches when in fact they only had two breeders and maybe 20 chicks,” said Joel Kornfeld, the senior SEC trial attorney on the Ostrich Group case.

The group sold the shares from late 1995 to mid-1997, urging investors to buy trios of the African birds, which the group promised to board, feed and breed for meat.

The Ostrich Group Inc. investors were just a few among thousands who put their money into ostriches earlier in the decade, lured by talk of their tasty meat while unaware of their unpredictable reproductive rates and high mortality.

Whitney personally billed, collected and pocketed $25,439 from 60 of the investors as boarding fees for nonexistent birds, the SEC alleged. Kornfeld said the money collected from Whitney will go to pay back the investors from whom he collected the money.

Whitney’s lawyer, Richard Weed, could not be reached for comment.

U.S. District Judge Gary L. Taylor entered the final judgment by consent against Whitney on May 20.

Earlier this year, another principal in the group, David Hudson III, was ordered to pay back $819,000 in allegedly ill-gotten gains plus $71,000 in interest. Two other principals in the group, Loretta Antrim and her son, Patrick Antrim, from Irvine and Dana Point, were previously ordered to pay $820,000.