All Is Settled in the Apartment Case, Except What Happened
Details, details.
Is that too much to ask when we’re talking about one of the largest consumer fraud cases in Orange County history? Especially when it involves the company run by the man who may be America’s next ambassador to Spain?
Or is this too indelicate a question: Did George Argyros, nominated by President Bush to represent the United States, preside over an apartment management company that for years systematically defrauded its tenants?
If he did, it’s pathetic that the U.S. Senate would even consider his nomination.
If he didn’t, he’s been unfairly maligned and deserves to have the cloud cleared.
I was hoping the state attorney general’s office would show us which course to take.
No such luck.
Instead, the AG’s office and Arnel Management Co. have settled the case, with the company agreeing to pay $1.5 million but not admitting guilt. The attorney general’s office called the settlement one of the largest of its kind in state history.
Arnel agreed to pay more than $1 million in restitution to former tenants, an additional $200,000 in fines and $150,000 for court costs. The company also agreed to follow guidelines regarding security deposits and apartment cleanup after a tenant moves out.
But we didn’t get the answer to this question: What did George Argyros know and how long did he know it?
Arnel said it agreed to the $1.5 million because, in effect, that was cheaper than defending itself in a protracted court case. The company has always insisted it did nothing wrong, and the settlement takes note of that.
We can be skeptical, but let’s be fair: Many defendants take the settlement route--even when not guilty of anything. Going to court costs a lot of money.
As a matter of law, then, Argyros’ hands also must be considered clean.
That’s why a settlement is bad news. It means we won’t learn what the state thinks the Arnel Co. did to its tenants over the years. By taking the million-five from the company, the state left us wondering.
The frustration is that it has to work like that.
“When you have a settlement and the other side isn’t allowed to make its case [in court], you can’t have a one-sided debate,” says Nathan Barankin, spokesman for the attorney general’s office. “And that’s what would happen if we released our files.”
Point taken.
But the whole thing stinks.
It stinks because this wasn’t a nickel-and-dime case. The allegations were that Argyros knew his company had engaged for years in a pattern of not returning some tenants’ deposits and for charging them over and above the deposits for upgrades after they moved out.
If true, the charges represent nothing short of a shakedown.
The investigator who spent 18 months on the case for the Orange County district attorney’s office has said Argyros knew a lot. He wanted to name Argyros and the company as co-defendants, a decision overruled by Dist. Atty. Tony Rackauckas before he transferred the case to the attorney general. He said restitution could have gone into the millions of dollars.
Casey Flanagan was a former tenant of an Arnel apartment building in Costa Mesa. He was outraged to learn that, after a year in the apartment, he wasn’t getting back his $400 security deposit. Plus, he was told he owed $130 for additional repairs.
A technical analyst with the Verizon phone company, Flanagan, 35, isn’t happy about the settlement, which won’t include him because he lived too many years ago in the apartment.
“It’s an easy way out,” he says. “The way I see it, the attorney general had a case and they settled, and I think that’s a lazy way to go when they needed to make a statement about a big company dealing with thousands of underdogs.”
Minus details from the state’s investigation, we’re left only to our own speculations about what Argyros knew.
For myself, color me frustrated.
Angry? No.
But then, I never lived in an apartment run by the Arnel Co.
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Dana Parsons’ column appears Wednesdays, Fridays and Sundays. Readers may reach Parsons by calling (714) 966-7821 or by writing to him at The Times’ Orange County edition, 1375 Sunflower Ave., Costa Mesa, CA 92626, or by e-mail to dana.parsons@latimes.com.
