Twenty-one victims have received a portion of the money stolen more than a decade ago by a Los Angeles woman after the District Attorney’s Office won an appeal to repay them.
Deputy District Attorney Allan Fork of the Major Fraud Division said 21 victims who were defrauded by Linda Park Ableman when she served as president of two companies – CitiEscrow and 1031 Exchange – between September 1989 and May 1990, split $434,619 in restitution.
Los Angeles Superior Court Judge Elizabeth Grimes approved the order to divide the money that Ableman repaid to the court. Out of the estimated 120 mostly Korean victims, who were defrauded by Ableman, 25 came forward last December and filed claims as part of the restitution process. Of the 25 people to file claims, 21 were valid, Fork said. The restitution amounts ranged from $600 to $111,403.67, Fork said.
“The defendant committed a severe breach of trust by stealing from her escrow clients. Fortunately, the victims compensated today are receiving almost 95 percent of their original loss,” Fork said. He added that the state-mandated Escrow Agents Fidelity Corp. fund provided the majority of the restitution, but the current compensation raised the level of compensation from 66 percent to almost 95 percent.
Ableman was hired by her sister, Nancy Murakami, in 1986 to work at CitiEscrow/1031 Exchange, a deferral accommodation service that allowed clients to defer capital gains tax under section 1031 of the Internal Revenue Code.
In June 1988, Ableman bought almost all of her sister’s stock and then reportedly forced her sister and her sister’s business partner, Christine Chung, out of the business. Ableman took over the company in September 1989.
Soon after Ableman assumed control, the Department of Corporations started investigating complaints about CitiEscrow. A financial audit revealed shortages. Escrow companies are required by law to have an outside agency do monthly internal audits, but all these records mysteriously disappeared, impeding investigation of CitiEscrow/1031 Exchange, Fork said.
Ableman later filed Chapter 11 bankruptcy for CitiEscrow and 1031 Exchange and then filed Chapter 7 bankruptcy for herself after she reportedly fled to Hawaii to avoid repaying nearly $3 million in stolen money.
After reportedly eluding authorities and thwarting investigations for years, Ableman pleaded guilty in 2002 to one count of grand theft and nine counts of money laundering and agreed to repay $400,000 to victims in order to reduce her 10-year prison term, Fork said.
However, when Ableman was sentenced to three years in state prison, the trial court judge ordered the D.A.’s office to pay the $400,000 to the Escrow Agents Fidelity Corp., which insures escrow companies.
The District Attorney’s Office appealed and the Court of Appeal last year reversed the trial court, ordering the $400,000 be repaid to the CitiEscrow and 1031 Exchange customers who had lost their deposits or investments.
Some victims were repaid in full by the Escrow Agents Fidelity Corp. through the bankruptcy trustee, Ronald Durkin. However, more than 100 victims never fully recouped their losses.
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