Ex-Hospital Official, Wife Charged in Sale

A former executive at the City of Hope and his wife have been arrested on charges that they stole more than $1 million from the hospital through a fraudulent auction of hospital properties.

Joseph Rohn, 40, and Julia Eleanor Castlen, 39, were arrested Tuesday in Los Angeles and San Diego respectively on charges of conspiracy, grand theft and money laundering.

Rohn is also charged with two counts of fraudulently altering or falsifying corporate papers by a corporate agent. They were being held on $1.3-million bail each and were expected to be arraigned early next week.

On Thursday, lawyers for Rohn, the former real estate department director of the hospital, a nonprofit cancer research and treatment center in Duarte, said the charges against him stemmed from a “misunderstanding” by new hospital management over the extent of Rohn’s authority to manage the hospital’s real estate interests.

The district attorney’s office alleges that Rohn sold some of the properties that had been donated to the hospital in an all-or-nothing bulk sale in 1996. Oil assets were also sold.

Acting on Rohn’s advice, the hospital accepted a bid of $288,120 for the properties from a company called K&K; Oil.

The complaint against Rohn and Castlen alleges that Rohn influenced the hospital to accept K&K;’s bid because he and his wife had an interest in K&K; through another company they controlled, and that Rohn added “valuable City of Hope real estate to the assets sold in the bulk sale.”

Hospital officials said that the properties sold to K&K; had a market value substantially higher than K&K;’s bid and estimated that they had lost in excess of $1 million on the deal.

Deputy Dist. Atty. Victor M. Minjares said that the arrests had been made after an independent property evaluation firm confirmed that the numbers provided by City of Hope were accurate.

City of Hope filed a civil suit against Rohn in June. That suit is still pending, said City of Hope’s general counsel, Glenn Krinsky. In the meantime, he said, the hospital has been cooperating with the district attorney’s investigation.

In a written statement, Rohn’s attorneys, John Vandevelde and Janet Levine, charged that the City of Hope had “instigated, directed and in part, financed a four-year investigation by the district attorney.”

“Even though Mr. Rohn has cooperated fully in the criminal investigation,” the statement said, “ ... the district attorney chose to use two raid teams to effect totally unnecessary early morning arrests of Mr. Rohn and his wife, taking them away from their two infant children and holding them in custody on an artificially inflated bail.”