Loan Swindle Figure Given Probation

LOS ANGELES — A federal judge sentenced an admitted con man to probation here Monday after warning him to stay away from “get rich quick” swindles that he said abound in Orange County.

U.S. District Judge A. Andrew Hauk ordered William Johnson to serve five years’ probation for his part in a swindle based in Tustin and Newport Beach that took $2 million from people who thought they were paying fees to apply for multimillion-dollar loans.

Hauk warned Johnson that he would go to prison if he gets involved again in “get rich quick schemes that are floating around Newport Beach, and Orange County, and hangouts for weird people.”

Johnson was the first of five defendants to be sentenced in the swindle, in which 40 people lost an average of $55,000 each.

Worked for Tustin Firm

Johnson, 39, worked for Resource Preservation Inc., a Tustin firm. In 1982-83, the firm bought ads claiming to represent overseas investors and offshore trusts with billions of dollars to lend.

Prospective borrowers were told that money was available at below-market interest rates but that the lenders required collateral. Johnson and other Resource Preservation salesman suggested that customers turn to Newport Beach mortgage banker Achille Haddad to arrange for collateral.

Haddad’s Fincoll Inc. was half of the swindle, prosecutors said. Haddad has pleaded guilty in the swindle and is to be sentenced in July.

Haddad told investors that the fees covered his expenses, plus costs for setting up accounts to handle transfers of funds when loans were approved and for hiring investment bankers and lawyers, prosecutors said.

Not a single loan was approved for any “applicant,” prosecutors said. When the application period--typically described as 90 days--expired, Fincoll and Resource Preservation employees stalled customers, with such excuses for the delays as bank holidays in Europe.

Haddad, who has pleaded guilty to 23 counts of wire fraud, allegedly received $1.2 million, or most of the profits.

Failed to Disclose Swindle

Johnson had faced up to three years in prison after pleading guilty to a single count of failing to disclose the swindle. His lawyer said it was only late in his 12-month tenure with Resource Preservation that he realized that the scheme was illegal.

Johnson received slightly more than $8,000 in the swindle, his lawyer said.

Justice Department attorney William P. Sellers did not object to the probation sentence.

In addition to Haddad and Johnson, Larry K. Thompson, 45, of Lubbock, Tex., has pleaded guilty and faces up to three years in prison.