Accused, Sued and Run Out of Town

It wasn’t enough that Jon E. Jenett, a prominent Laguna Beach resident, agreed to pay about $10 million to a neighbor who accused him of embezzlement. He also must now sell his home and leave his swanky community for 10 years.

Such were the terms of a highly unusual settlement reached late last week between Jenett and his one-time friends and neighbors, Sara and Thomas Hopper, who two years ago shocked the Three Arch Bay community by accusing Jenett of a massive embezzlement scheme.

The Hoppers had owned an Irvine electronics company of which Jenett had been chief financial officer. The Hoppers contended that Jenett had siphoned off nearly $3 million between 1990 and 1998 and helped cause the company’s demise. Jenett, 49, denied the charges and countersued.

“Our families were constantly mixing together, including our parents and children,” Thomas Hopper said in an interview Monday, expressing relief that the prolonged battle is over. “We took vacations together.”

The settlement contains no admission of liability from Jenett. Orange County Deputy Dist. Atty. Mark Sevigny said a criminal investigation remains open in the case, but he declined to elaborate.

Jenett, a Harvard graduate with a Stanford MBA, was widely known for his community activism and fund-raising. He had headed the Laguna education booster group SchoolPower and the city’s American Youth Soccer Organization chapter.

Attorneys for both sides said Jenett agreed it was best for him to leave Three Arch Bay.

“There had been a series of personal statements, confrontations and embarrassing moments,” said Jenett’s lawyer, David Grant. “I’m thrilled to bring peace to Mr. Jenett--and I’m pleased for the plaintiffs as well.”

The Hoppers’ attorney, Bill O’Hare, said he had never heard of anyone being barred from living anywhere in the city, but added that it was just one of the unusual wrinkles in an unusual case.

“We’re very pleased with the outcome on the civil side. And we think it’s fair too,” O’Hare said.

Under the settlement, filed in Orange County Superior Court, Jenett will hand over most of his stock holdings in a private San Diego company that the Hoppers’ lawyer estimates is worth more than $9 million, though Grant said the holdings are difficult to value. Jenett also turned over $450,000 in cash and agreed to pay an additional $150,000 to the Hoppers when he sells his house, which he is required to do within nine months.

What’s more, for 10 years after that, he can’t live in or own property in Three Arch Bay--a community of more than 400 homes where million-dollar cottages on hillsides and mansions on rocky bluffs look out toward Santa Catalina Island, the Palos Verdes Peninsula and the Dana Point Headlands.

Grant said Jenett, who has three children, intends to remain a resident of Laguna Beach. The Jenetts have lived in Three Arch Bay for about 10 years.

In a community where people inevitably meet up with one another at the large private beach, the allegations were all the more jolting because Jenett was--and continues to be--such a widely known leader. Jenett, now the registrar for the soccer organization, darted about handing out forms and offering advice to parents at a recent sign-up session for this year’s soccer program.

“There’s only a handful of people who really do anything for this community,” said Richard Leavitt, the current commissioner of the soccer organization. “And he’s one of the few. He’s helped this community immensely.”

“There’s still room in Laguna for Jon,” Leavitt added. “If he can’t live in Three Arch, he can be my neighbor.”

The settlement came after Jenett’s countersuit, accusing the Hoppers of defaming him, was dismissed when Jenett refused to testify, citing his right not to incriminate himself. According to documents filed in the Hoppers’ civil suit, Irvine police found evidence on a laptop computer that Jenett had forged documents that appeared to authorize him to receive extra payments from the Hoppers’ Mission Electronics Corp. in Irvine.

Under terms of the settlement, Jenett will keep about $1 million in stock in private PacketVideo Corp. of San Diego, a high-tech company he joined after leaving Mission Electronics. Nearly all of that remaining stock is being held in trust for his three children.

“Most of what he keeps is in the kids’ trusts. And this does give Jon a chance to make a fresh start,” said O’Hare, the Hoppers’ attorney.

After Mission collapsed, putting more than a dozen employees out of work, the Hoppers were forced to sell their oceanfront home in what’s known as Lower Three Arch Bay and moved to the less expensive Upper Three Arch Bay, on the inland side of Coast Highway. Jenett also lives in Upper Three Arch Bay, so the families wound up living closer together after the falling-out.

“It’s been very difficult and shocking in many ways for us,” Hopper said. “Having to deal with this in our common social circles--we’re pleased those issues are addressed as part of the settlement.”

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Eviction

Jon E. Jenett of Three Arch Bay must sell his home and live outside the gated community for 10 years as part of a legal settlement.

Terms of Agreement

* Jenett pays $450,000 immediately.

* Jenett hands over 703,575 shares of preferred stock in PacketVideo Corp. The stock has sold for $10 to $13.80 a share in private transactions over the past year, according to Hopper attorney Bill O’Hare.

* Jenett agrees to sell his house within nine months and to pay $150,000 from the sale of the house to the Hoppers.

* Jenett agrees not to live or own property in Three Arch Bay for 10 years after selling his house.

* Jenett keeps 90,000 common shares of PacketVideo in his children’s trusts and 1,425 shares in his own name.

* Court releases Jenett accounts containing about $400,000.

Source: Stock transfer, settlement and release agreement between the parties