Promoter of Failed Realty Investments to Be Tried on 19 Theft Charges

A Los Angeles Municipal Court judge has ordered a La Puente woman to stand trial on 19 counts of grand theft in connection with a real estate investment plan that allegedly cost hundreds of investors millions of dollars four years ago.

Judge Barbara A. Meiers ordered Joan Betts Diplarakos to appear in Los Angeles Superior Court for arraignment April 18. If convicted, Diplarakos, 64, could face up to 10 years in prison. She is free on $25,000 bond.

Diplarakos is accused of bilking 18 investors out of $1.3 million from three real estate projects in Walnut, Covina and Rancho Cucamonga.

Deputy Dist. Atty. Abraham Khan said these 18 were just some of the investors who lost money on real estate projects promoted by Diplarakos and her company, First Home Investments Inc. of La Verne. He said 250 investors put $8.5 million into the projects before the investment plan collapsed four years ago.

Khan said Diplarakos was charged with grand theft last year after more than 2 1/2 years of investigation by the major fraud unit of the Sheriff’s Department. It was the largest real estate fraud investigation ever undertaken by the department, he said.

Attorney Gary Pohlson, representing Diplarakos, argued at the Thursday preliminary hearing that Diplarakos had made a “good faith effort” to carry out her proposed real estate projects and was victimized by “a bad real estate market.”

“Nothing was taken or hidden anywhere that ended up in Joan Diplarakos’ pocket,” he said. “All it was was bad timing and maybe less than advisable tactics on how to market and how to allocate your funds.”

Diplarakos and Pohlson declined to comment on the accusations after she was ordered to face trial at the conclusion of a three-week preliminary hearing that involved testimony by investors and the introduction of more than 5,000 pages of documents.

Many of the victims were homeowners who raised cash for investment by obtaining second and third mortgages on their homes, Khan said. First Home, which is now in bankruptcy, formed partnerships with the investors to buy, develop and resell property.

Khan said First Home was created in 1978 and its first few, small projects were profitable. But then, he said, operations mushroomed. At one point, he said, the company had half a dozen offices, mostly in the San Gabriel Valley, but also as far away as Carlsbad in San Diego County and in Marina del Rey.

But, while investment money poured in, First Home had trouble finding profitable projects as the real estate industry entered a recession and construction loans became costly or unavailable, he said.

Khan said investors were told that their money was going into specific projects, but funds were commingled without their knowledge.

Khan said one selling point for investors was that they could invest “without changing their life style.” Even the payments on the second mortgages they had obtained for investment capital would be paid by First Home until development projects could be completed and the profits could be divided. Some investors got their first hint of trouble when holders of second trust deeds began foreclosing on homes because First Home had not made the mortgage payments. Khan said some people--he is uncertain how many--lost their homes as well as their savings.

Khan said Diplarakos committed grand theft because she obtained money under false pretenses and did not use it for the intended purposes. The fact that Diplarakos may have worked hard to make the real estate projects pay off and may not have intended to steal is irrelevant, he said.

Khan said Diplarakos used false pretenses by telling investors that her husband had invested $250,000 in one project though he had not, by asserting that the investments were safe, by claiming to own property she had not acquired and by continuing to lure investors into projects after First Home was in deep financial trouble.

“She knew these representations were fraudulent,” Khan said.

And, he said, Diplarakos also committed grand theft by improperly transferring money from one investment to another. Each project was organized with different investors and the funds should not have mixed, he said. But in the three projects that produced the grand theft charges, Khan said, more than $500,000 was spent for purposes outside the projects.

One of the projects involved a plan to rehabilitate an office building on Citrus Avenue in Covina. Khan said $322,000 was raised from investors, but the property was never acquired. The other projects named in the grand theft charges involved plans to develop vacant land in Rancho Cucamonga and Walnut.

Khan said he knows of one investor who lost $350,000, and other investors may have lost even more.