*** L. A. Superior Court Involved In Largest Bribery Scandal
J.A.I.L. News Journal
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____________________________________________________Los Angeles Superior Court Involved InLargest Bribery Scandal In Recent Court HistoryDAILY NEWS www.dailynews.com
Sunday, August 27, 2000
Court withheld trust account from public
By Troy Anderson
Exposed by the largest bribery scandal in recent court history, Superior Court officials admit they wrongfully kept secret an $81.6 million trust account containing $18 million in interest owed to local governments and individuals, the Daily News has learned.It was only after an Encino attorney discovered the account by chance and bribed a Superior Court Finance Division auditor to feed him the names of those owed money that officials lifted the confidentiality from the account.
Before they were caught, the lawyer and clerk split $1.5 million in fees by telling cities and other government agencies how they could collect $5 million in forgotten money owed them. While Superior Court officials have revised procedures for the account, no outside audit of the account has been conducted. Officials relied on an internal county audit and the District Attorney's Office investigation of the bribery case instead.
"Very simply, the court's position for a long time was this money was confidential," said Alf Schonbach, the Superior Court finance and accounting administrator who oversees the fund. "The court made no
effort to contact persons to whom the money might be owed."
The Condemnation and Interpleader trust account currently has $63.6 million in deposits in 1,333 cases, some dating back to the early 1970s. Most of the deposits were made by cities and redevelopment agencies after condemnation of someone's property under eminent domain laws. Over the years, the fund accrued $18 million in interest from investment in U.S. government securities.
Schonbach acknowledged that the courts did nothing until recently to notify people about the account, but said there now seems to be little interest by the cities that have a responsibility to homeowners involved in the cases. The court has been sending out notices every six months to cities with cases, but has only received six responses.
"Ultimately, the responsibility really falls on the attorneys in these
cases," Schonbach said. "Given the number of cases heard in Los Angeles Superior Court, it's unreasonable to believe that a small accounting staff within the court is going to play nursemaid and remind these attorneys that they have forgotten to complete their work." Most of the money is deposits made by cities and redevelopment agencies,
but Schonbach estimates a small amount is due to homeowners and their heirs.
"In some of these older cases, people may have moved or are deceased," he said. "Probably less than 3 (percent) to 4 percent of the total in that fund is awaiting its rightful owners to come forward." The bribery case revealed that for decades the Superior Court failed to
make public the individuals, businesses and municipalities that are owed money from the account. Schonbach said the informal policy was in place before he and the court clerk took their jobs in the early 1990s and that as a result of the bribery case, the County Counsel's Office recommended they make the fund public. Since last year, the court has been sending notices to cities every six months telling them about money principal and interest owed them. "We never made a deliberate attempt to conceal the information," Schonbach said.
But retired Assistant County Counsel Fred Bennett, who advised the courts for 25 years and retired in April, said nobody ever gave the
court legal advice that the fund was confidential. "When this matter was first brought to my attention, I advised the court I could not see any compelling reasons that would warrant nondisclosure of this kind of information," Bennett said. Bennett became suspicious * about the potential of someone exploiting the account when he learned an attorney was contacting cities and telling them he could get them their lost funds if they paid him half.
"I was very concerned that their record-keeping system -- that they
didn't have a good paper trail on whether the money had been paid out," Bennett said. "There was a person at the meeting named Gregory Pentoney. I recalled my fears when I later learned of the investigation of Pentoney. I took all my notes to the District Attorney's Office." In the scheme, Pentoney, 32, of Downey gave secret county account data to Encino attorney Robert Fenton, 51, who collected "bounty fees" for tracking down forgotten funds owed to cities, mostly in interest,
according to court records.
Under a plea bargain in March, Fenton pleaded no contest to giving a bribe to a ministerial officer. Pentoney pleaded no contest to accepting a bribe. Without the plea bargain, they each faced 12 years in prison.
On Aug. 11, Fenton began a 16-month state prison term. On Sept. 8, Pentoney is expected to begin serving a two-year prison term. Fenton distributed $5 million to cities, involving 99 separate cases,
and collected fees of about $1 million for himself and $463,165 for
Pentoney, prosecutors say.
The public agencies put money into the account when a property owner contested an eminent domain proceeding. The deposit was based on the assessed value of the properties being sought for public works projects. These cases can wind through the court system for years.
Fenton discovered the fund after his parents' property in North
Hollywood was condemned, said James Blatt, an Encino attorney
representing Fenton. Blatt said Fenton, who is married and the father of five, had the "best intentions" when he developed his plan to profit from returning the money to the rightful owners.
"Fenton's conduct in this case was the result of his unlikely discovery of funds wrongfully possessed by Los Angeles County and his desire to obtain the return of those funds," Blatt said. "In so doing, Fenton's judgment clouded, and what he now understands were bribes were paid. "What's so shocking about this case is that over the years Los Angeles County did not make any effort to return these monies to the rightful owners," Blatt said.
One of the cities Fenton contacted was Glendale.
Glendale Chief Assistant Attorney Ron Braden said his finance director received a letter from Fenton stating he could recover money for the city for a fee. Piquing his interest, Braden discovered that no one in the city had thought to recover interest on deposits made with the court on eminent domain cases over the years. "This happened not only to Glendale, but a whole bunch of other government entities," he said. "I understand that it wasn't done as a matter of practice where attorneys for cities go back into court to get whatever balance is owed them."
Instead of taking Fenton up on his offer, Braden contacted the court to find out which cases the city could collect on. He intended to get the money by himself. After several unsuccessful attempts to find the cases, Braden contacted Pentoney, who suggested he look through a court index. After looking at the index, he got a call from Fenton, who told him he had found only a small portion of the cases. Fenton told him he would help him find the rest.
So Braden agreed to pay Fenton.
"We found about $400,000 worth of cases on our own and he probably found $1.3 million above that," Braden said, adding that the city paid Fenton about $2,800 and was about to pay him an additional $33,000 when an investigator called and told him Fenton was under investigation. "When I got that call I did not release that check for $33,000 to him," Braden said. "I was outraged and incensed personally."
Afterward, Fenton sued the city to recover the $33,000. The lawsuit is on hold while he is in prison. "The only thing that bothers me frankly is that Mr. Fenton sued us," Braden said. "And Mr. Fenton said in our open court through his attorney during sentencing that he intends to proceed with his lawsuit against us. I think that's outrageous."
* Ronald Branson, author of JAIL4Judges, has had a number of court dealings with Frederick Bennett. On every case in which Branson brought action against a Los Angeles County judge for actions in complete absence of all jurisdiction, (supposedly the only grounds in which judges do not enjoy protection under judicial immunity) it was Frederick Bennett that would show up in defense of the miscreant judge. He always appeared confident and arrogant. He would remark to the judge hearing the case words like, "How's Mary and the kids?" and talk on a personal one-to-one relationship with the judges. He has been defending all the corrupt judges in the County of Los Angeles for many years. Even if you went to federal court, he would carry on in front of the federal judges in this manner.He is reported to have said to a friend of Mr. Branson who was bringing an action against a Los Angeles County judge defendant, "There has never, in my entire experience as defense for the judges, been a ruling against any of our judges," inferring that his case was a certain lost cause. (And, of course, it was.)It was people like Frederick Bennett that helped educate Mr. Branson into the dire need for JAIL4Judges. In the above article, Mr. Bennett attempts to portray himself as a man of integrity in the L.A. Court Corruption Scandal, and totally uninvolved. You be the judge.-Ron Branson-J.A.I.L. is an acronym for (Judicial Accountability Initiative Law)
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