Former Colton councilman pleads guilty
Former Colton City Councilman Ramon Hernandez abruptly changed his plea to guilty this afternoon, on the eve of his trial on charges of using city funds to pay for stays at local hotels and calls to sex hot lines.
Hernandez, 47, faces up to eight months behind bars and three to five years on probation when he is sentenced April 10.
Hernandez spoke in quiet tones as Superior Court Judge Ronald Christianson read each of the 24 charges of misuse of public funds. Afterward, he scampered briskly down a staircase and out of the courthouse.
"I have no comment," he said as he descended the stairs.
Two months ago, the former councilman rejected a plea deal that would have given him a maximum of six months in jail.
Frank Vanella, the lead public integrity prosecutor for the San Bernardino County District Attorney’s office, said outside court today that he was surprised by Hernandez' sudden agreement to plead guilty.
"You’ll have to ask him" why, Vanella said.
Hernandez has paid Colton $5,400 for amounts charged on his city cell phone and credit card.
—Darrell R. Santschi
dscantschi@PE.com
2008-01-26
2008-01-24
People of the State of California v. Daniel William Heath, Denis Timothy O'Brien, John William Heath, and Larre Jaye Schlarmann
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20438 / January 24, 2008
People of the State of California v. Daniel William Heath, Denis Timothy O'Brien, John William Heath, and Larre Jaye Schlarmann, Superior Court of California, County of Riverside, Case No. RIF117775
Defendants Convicted of 522 Felonies After Commission Action Against Securities Fraud Scheme Targeting Senior Citizens and Elderly Victims in Southern California
The Securities and Exchange Commission announced today that on January 10 and 11, 2008 a jury in Riverside County, California, convicted three men on felony charges involving a fraudulent scheme that was the subject of a prior enforcement action brought by the Commission, which raised more than $187 million from over 1,800 victims, mostly senior citizens and the elderly. Convicted for their role in the scheme were Daniel William Heath, 51, formerly of Chino Hills, California, Denis Timothy O'Brien, 53, formerly of Yorba Linda, California, and Heath's father, John William Heath, 81, formerly of Covina, California. Daniel Heath was found guilty on 400 felony counts, O'Brien on 70 felony counts, and John Heath on 52 felony counts. In 2004, the Riverside County District Attorney's Office arrested and charged them with committing securities fraud, elder abuse, grand theft, money laundering, tax fraud, and conspiracy, all under California law. Larre Jaye Schlarmann, 52, formerly of Carlsbad, California, was also arrested, pleaded guilty to securities fraud, elder abuse, money laundering, and tax fraud, and was sentenced to serve 15 years in state prison.
Daniel Heath faces a maximum of 117 years in state prison, O'Brien 37 years, and John Heath 28 years. Sentencing hearings are scheduled for John Heath on February 22, O'Brien on February 27, and Daniel Heath on March 21, 2008.
In April 2004, the Commission filed a complaint against Daniel Heath and his entities, and O'Brien, alleging they fraudulently induced elderly investors through "free lunch" seminars to invest in "secured" notes that paid a "guaranteed" return. The court appointed a permanent receiver over the Heath entities. Final judgments of permanent injunction and other relief were entered against Heath and O'Brien enjoining them from violating the antifraud, securities registration, and broker-dealer registrations provisions of the federal securities laws for their role in the scheme. The judgments ordered Heath and O'Brien to disgorge to the receiver their ill-gotten gains plus prejudgment interest. The Commission then instituted administrative proceedings against Heath and O'Brien barring them from association with a broker or dealer. Heath and O'Brien consented to the entry of the final judgments and administrative orders without admitting or denying the Commission's allegations and findings. In September 2007, the Commission instituted administrative proceedings against Martin S. Duffield, 52, of West Covina, California, and Raul A. Jordan, 52, of Pasadena, California, for violating the antifraud, securities registration, and broker-dealer registrations provisions for their role in the scheme. Duffield was barred association with any broker or dealer and Jordan was barred from association with any broker or dealer, with the right to reapply for association after five (5) years to the appropriate self-regulatory organization, or if there is none, to the Commission. Duffield and Jordan were ordered to disgorge ill-gotten gains to the receiver plus prejudgment interest. Duffield and Jordan consented to the entry of the orders without admitting or denying the Commission's findings.
Administration of the court-order receivership over the Heath entities will continue.
The Commission wishes to acknowledge and thank the Riverside County District Attorney's Office for their assistance in this matter.
For further information, see Litigation Release Nos. 18689 (May 3, 2004), 18703 (May 11, 2004), 18724 (May 24, 2004), 18777 (July 9, 2004), and 19287 (June 28, 2005), and Administrative Proceeding Release Nos. 34-51473 (April 4, 2005), 34-51922 (June 24, 2005), and 33-8838 (September 5, 2007).
http://www.sec.gov/litigation/litreleases/2008/lr20438.htm
Litigation Release No. 20438 / January 24, 2008
People of the State of California v. Daniel William Heath, Denis Timothy O'Brien, John William Heath, and Larre Jaye Schlarmann, Superior Court of California, County of Riverside, Case No. RIF117775
Defendants Convicted of 522 Felonies After Commission Action Against Securities Fraud Scheme Targeting Senior Citizens and Elderly Victims in Southern California
The Securities and Exchange Commission announced today that on January 10 and 11, 2008 a jury in Riverside County, California, convicted three men on felony charges involving a fraudulent scheme that was the subject of a prior enforcement action brought by the Commission, which raised more than $187 million from over 1,800 victims, mostly senior citizens and the elderly. Convicted for their role in the scheme were Daniel William Heath, 51, formerly of Chino Hills, California, Denis Timothy O'Brien, 53, formerly of Yorba Linda, California, and Heath's father, John William Heath, 81, formerly of Covina, California. Daniel Heath was found guilty on 400 felony counts, O'Brien on 70 felony counts, and John Heath on 52 felony counts. In 2004, the Riverside County District Attorney's Office arrested and charged them with committing securities fraud, elder abuse, grand theft, money laundering, tax fraud, and conspiracy, all under California law. Larre Jaye Schlarmann, 52, formerly of Carlsbad, California, was also arrested, pleaded guilty to securities fraud, elder abuse, money laundering, and tax fraud, and was sentenced to serve 15 years in state prison.
Daniel Heath faces a maximum of 117 years in state prison, O'Brien 37 years, and John Heath 28 years. Sentencing hearings are scheduled for John Heath on February 22, O'Brien on February 27, and Daniel Heath on March 21, 2008.
In April 2004, the Commission filed a complaint against Daniel Heath and his entities, and O'Brien, alleging they fraudulently induced elderly investors through "free lunch" seminars to invest in "secured" notes that paid a "guaranteed" return. The court appointed a permanent receiver over the Heath entities. Final judgments of permanent injunction and other relief were entered against Heath and O'Brien enjoining them from violating the antifraud, securities registration, and broker-dealer registrations provisions of the federal securities laws for their role in the scheme. The judgments ordered Heath and O'Brien to disgorge to the receiver their ill-gotten gains plus prejudgment interest. The Commission then instituted administrative proceedings against Heath and O'Brien barring them from association with a broker or dealer. Heath and O'Brien consented to the entry of the final judgments and administrative orders without admitting or denying the Commission's allegations and findings. In September 2007, the Commission instituted administrative proceedings against Martin S. Duffield, 52, of West Covina, California, and Raul A. Jordan, 52, of Pasadena, California, for violating the antifraud, securities registration, and broker-dealer registrations provisions for their role in the scheme. Duffield was barred association with any broker or dealer and Jordan was barred from association with any broker or dealer, with the right to reapply for association after five (5) years to the appropriate self-regulatory organization, or if there is none, to the Commission. Duffield and Jordan were ordered to disgorge ill-gotten gains to the receiver plus prejudgment interest. Duffield and Jordan consented to the entry of the orders without admitting or denying the Commission's findings.
Administration of the court-order receivership over the Heath entities will continue.
The Commission wishes to acknowledge and thank the Riverside County District Attorney's Office for their assistance in this matter.
For further information, see Litigation Release Nos. 18689 (May 3, 2004), 18703 (May 11, 2004), 18724 (May 24, 2004), 18777 (July 9, 2004), and 19287 (June 28, 2005), and Administrative Proceeding Release Nos. 34-51473 (April 4, 2005), 34-51922 (June 24, 2005), and 33-8838 (September 5, 2007).
http://www.sec.gov/litigation/litreleases/2008/lr20438.htm
2008-01-16
Conspiracy charge dropped against lawyer in bail-bonds case
08:17 AM PST on Wednesday, January 16, 2008
SAN BERNARDINO - A conspiracy charge was dropped Tuesday against Wayne Michael Rozenberg, a Murrieta attorney accused in 2004 of paying inmates in a San Bernardino County jail to find clients.
In his first public comments, Rozenberg -- wearing a tie decorated with justice scales and the words not guilty -- said he never considered a plea offer. It was dismissal or trial, he said.
His attorney, Richard Pintal, said his client is "factually innocent."
"I want to make that very clear," Pintal said. "It's not just a matter of the legal term of 'not guilty.' "
If convicted, Rozenberg faced as much as three years in prison and possible disbarment.
Lead Deputy District Attorney Glenn Yabuno told Superior Court Judge James Dorr that the case was dropped "in the interest of justice."
Rozenberg, 42, was among nearly 30 attorneys and bail-bond employees charged after a 15-month San Bernardino County sheriff's investigation of illegal practices among bail companies.
Many of those charged in the scandal have accepted plea agreements or were indicted last month by a special criminal grand jury after their cases had been stalled in the courts for years.
That same grand jury did not indict Rozenberg after the district attorney's office, after two days of testimony before jurors last month, chose not to seek an indictment, Yabuno said.
Yabuno said he did not think the case was provable beyond a reasonable doubt.
"We were able to examine witnesses and their statements," Yabuno said. "(We) made a decision, in the interest of justice, that the matter would be dismissed."
Yabuno declined to elaborate.
Sgt. Chris Elvert, a detective when he led the bail-bond task force, said he was disappointed by the decision.
"That was their choice," Elvert said. "And I have to live with it."
One sheriff's report involving Rozenberg includes numerous interviews with inmates and others about Rozenberg directing money to inmates who referred clients.
Elvert said the investigative effort initially began with two detectives and grew into a task force with two lieutenants, one sergeant and two detectives by mid-2003.
Officials initially targeted corruption among two attorneys and Boone's Bail Bonds, owned by Danial Blayne "Boone" Tidwell, son of former San Bernardino County Sheriff Floyd Tidwell.
While serving search warrants and investigating bail-bond practices, the task force unearthed evidence linking Rozenberg to Anne Marie Duncan, then an arson prosecutor with the San Bernardino County district attorney's office, Elvert said.
"A case was submitted to the (state) attorney general's office for review to see if Ann Marie Duncan had conducted herself in any criminal way with her being a deputy district attorney and his being a target of the investigation," Elvert said.
Elvert said the recommended charges had to do with her "official interference," he said. He declined to elaborate.
Elvert said three search warrants, all sealed by a judge, were served at Rozenberg's home in Murrieta and his office in Rancho Cucamonga and for Duncan's cell phone records.
Elvert, although disappointed that the district attorney's office did not seek an indictment, complimented officials for referring the case to the state.
"They did absolutely everything by the book," Elvert said. "They did not hinder us in the investigation."
On Monday, Deputy Attorney General Mike Murphy confirmed that his office had received a recommendation that charges be filed against Duncan for leaking information to Rozenberg.
Murphy said his office decided not to prosecute. He declined to elaborate.
On Tuesday, Duncan, who is married to Superior Court Judge Brian Saunders, said she never leaked information to Rozenberg.
"I didn't get one piece of information that was not out of the newspaper," Duncan said. "I was not privy to any insider information."
Duncan and Rozenberg said they became friends after serving as attorneys on the same homicide case five years ago.
Rozenberg said he resents investigators using his text messages and e-mails with Duncan to create leverage that information was leaked. He said rumors about him have been flying around courthouses and jailhouses for years.
"People will believe whatever they want to believe," Rozenberg said. "The truth is never as exciting as the rumors."
Rozenberg said information about his friendship with Duncan would have been aired in court Thursday if his preliminary hearing had proceeded.
Duncan quit the district attorney's office after a 16-year career on March 4, 2005, Assistant District Attorney Jim Hackleman said.
"She was a very effective prosecutor for us," Hackleman said. "It would be inappropriate for me and illegal to comment on any personnel matter, assuming there was one here."
Duncan said she went into private practice in Redlands because she could devote more time to her health and children.
In June 2003, authorities served 13 search warrants as part of the bail-bond investigation that snared Danial Tidwell. Authorities found about a dozen weapons taken from the Sheriff's Department at Danial Tidwell's home in Phelan.
Floyd Tidwell, the county's sheriff from 1983 to 1991, was sentenced in November 2004 to three years unsupervised probation after being convicted of misdemeanor charges related to concealing those weapons. He paid $10,000 in restitution.
Danial Tidwell returns to court Feb. 22 for arraignment.
He is among more than a dozen bail-bond employees who, after their cases were stalled in the criminal courts nearly four years, were indicted by a special criminal grand jury in December.
Staff photographer Greg Vojtko contributed to this article.
Reach John F. Berry at 909-806-3058 or jberry@PE.com
bail-bond investigation
A conspiracy charge against a Murrieta attorney linked to a former San Bernardino County prosecutor in a bail-bond investigation was dropped Tuesday.
Aug. 4, 2004: Judge signs search warrants against Wayne Rozenberg.
Oct. 12. 2004: Rozenberg pleads not guilty to one count of conspiracy for illegally paying inmates for referrals.
Early 2005: State attorney general decides against pressing an unspecified charge against Anne Marie Duncan for leaking information to Rozenberg. The two said they are friends.
March 4, 2005: Duncan quits district attorney's office after 16 years and goes into private practice.
Tuesday: Charge against Rozenberg dismissed.
SOURCE: San Bernardino County Superior Court; San Bernardino County district attorney's office; state Attorney general
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