Anchorman’s Trial Focuses on Promises

The securities fraud trial of former KCBS-TV anchorman Larry Carroll focused Tuesday on testimony by a banking expert who told the court that promises of a high-yield investment with no risk usually signal some kind of fraud.

“There are investments that can provide staggering returns, but the risks are very high,” said James Byrne, a law professor at George Mason University.

Jurors hearing the case will have to decide whether Carroll was a perpetrator in an investment scheme based on such promises--or himself a victim of the scam.

Carroll, 48, and an associate, Ronald Long, 48, are each charged with five felony counts of conspiracy to commit grand theft and securities fraud for allegedly trying to lure a High Desert developer into putting $2 million into an investment scheme.

Terry Christensen, the owner of the Lake Delores water park in the San Bernardino County town of Newberry Springs, was told by Carroll, Long, and others of several high-yield investments, according to prosecutors.

One deal promised that an investment of $2 million would grow to $18 million within 10 days. Christensen was told the money would sit untouched in an account and would simply be “scanned” to make sure it was there. Byrne testified that there is no such thing as an investment deal that involves “scanning” a bank account.

Deputy Dist. Atty. L. Gordon Isen said in opening statements Monday that “there were over 90 phone calls made to induce Mr. Christensen to participate in this investment program.” Most of those calls, he said, involved Carroll.

Carroll told Christensen that he had invested $30,000 in a similar high-yield deal that earned him $430,000, prosecutors said.

Christensen met Carroll at a police charities motorcycle rally in September 1998, and gave Carroll and others a tour of his water park.

After he was contacted later about the investment opportunity, Christensen called a San Bernardino County sheriff’s official and told him about the suspicious offer. The district attorney’s office assigned an investigator to pose as Christensen’s business advisor. The investigator tape-recorded conversations with Christensen, Carroll and Long, prosecutors said.

Christensen never gave any money to Carroll or his associates.

One of the charges against Carroll is that he misrepresented his financial expertise. Long is accused of failing to reveal a 1992 criminal conviction for real estate fraud that landed him in prison for 22 months. Long, who is now living in Los Angeles with his mother, says he is on leave from his job as a marketing director at a Phoenix bank.

Carroll’s attorney, Rex J. Beaber, told the jury in opening statements that Carroll believed his $30,000 investment in late 1997 had earned him a huge return--even though he had yet to actually retrieve the funds. Carroll was allegedly told that his money was being held in a Swiss bank.

Beaber said Carroll didn’t realize he had been swindled until a month after his indictment in February. When he urged Christensen to make a similar deal, Beaber told the jury, he did so because he would get a finder’s fee.

“He did in fact believe this was a way they both could make money,” Beaber said.

“There is only one victim to the fraud being discussed here,” Beaber told the jury. “That victim is Larry Carroll. He paid his good money thinking he was making an investment.”

After his indictment, Carroll, who lives in Chatsworth, took a leave from KCBS, where he was the afternoon co-anchor. His contract was not renewed last spring.

“I wish I was writing the story,” he said during the trial’s lunch break Tuesday. In fact, he said, “If I ever get to work in television again, I’m planning a piece on financial fraud schemes and how people can get ensnared in them.”