Fraud Verdict of Ex-Broker Is Thrust Into Race for D.A. : Courts: Mark R. Weinberg, who once infiltrated a crime family and was closely allied with Ira Reiner and Mayor Bradley, is convicted of $1-million scam.

By JAMES QUINN

March 18, 1992 12 AM PT

TIMES STAFF WRITER

A former Beverly Hills commodities broker--who once infiltrated an organized crime family for the FBI and was closely allied with Dist. Atty. Ira Reiner, Mayor Tom Bradley and other prominent local Democrats--was convicted Tuesday of defrauding clients out of nearly $1 million.

The conviction of Mark R. Weinberg, 37, was promptly thrust into the election campaign for district attorney. One of Reiner’s rivals called Weinberg’s $206,000 contribution to Reiner’s 1984 campaign “mob-generated” money and demanded that the district attorney return it.

“The top law enforcement officer in the county should not be in possession of what I believe is mob-generated money,” Deputy Dist. Atty. Gil Garcetti, one of Reiner’s four challengers in the June 2 primary, said at the Van Nuys Courthouse, where Weinberg stood trial.

Garcetti acknowledged he could not prove the money Weinberg gave Reiner in 1984 came from organized crime figures and added: “I have faith that Reiner did not know the money he took originated with the mob.”

If Reiner returned the $206,000, Garcetti said, “it could be used to partly compensate the victims in this case.”

Reiner campaign manager Robert P. Ellis called Garcetti’s request “an old story . . . typical election-year politics.”

“Mr. Weinberg was a citizen in good standing when he made his contribution. It was so many years ago in a campaign that has long since passed. At the time, Mr. Weinberg contributed to candidates seeking every type of office at city, county, state and federal levels, including mayoral, congressional and senatorial races,” Ellis said.

Reiner campaign spokesman Robert Ellis declined comment.

According to testimony by FBI agents, in 1984 and 1985, while Weinberg was doling out hefty sums to the campaigns of Reiner and other top Democrats, he also had infiltrated organized crime on behalf of the bureau. At one point, up to $10 million in funds from the Genovese crime family of New York was invested through his brokerage when he traded commodities futures for Matthew (Matty the Horse) Ianello, Anthony (Fat Tony) Salerno and other top mobsters, the agents testified.

Although Weinberg’s campaign largess occurred during the same two years he was handling mob money and recording conversations for the FBI, Deputy Atty. Gen. Tricia Ann Bigelow, who prosecuted him, said the source of Weinberg’s campaign donations “wasn’t proven by any evidence at the trial.”

Weinberg was found guilty on two counts of grand theft and three of writing bad checks, and not guilty on five similar counts.

The trial focused on Weinberg’s activities from 1988 to 1990, when police say he passed bad checks and obtained personal loans under false pretenses from wealthy investors to finance his failing efforts to produce television variety and talk shows.

Victims included John Paul Jones De Joria, president of John Paul Mitchell Systems, a Santa Clarita-based hair products company, who said he lost $450,000, and Susan Aubrey, whose father, former CBS President James Aubrey, gave Weinberg $100,000 that was never returned.

Shortly before the trial began, Reiner’s campaign returned $50,000 to Weinberg after the defendant complained in court that the money had been a loan and he had waited six years to get it back. Reiner campaign officials said they thought the money was a contribution.

In addition to the money contributed to Reiner--which was about one-fourth of all the money Reiner took in for his successful 1984 race to unseat Dist. Atty. Robert Philibosian--Weinberg also gave $84,000 to Bradley’s 1985 mayoral campaign and $54,000 to U.S. Sen. Alan Cranston, according to public records.

Called to the stand by Weinberg, who represented himself in the case, Reiner said he and Weinberg and their wives had socialized, and he went to the 1984 Olympics with Weinberg.

Bradley testified that he had been fond of Weinberg and introduced him to former Democratic presidential candidate Walter F. Mondale, for whom Weinberg staged a star-studded fund-raiser. The mayor also said he had invested in high-risk futures with Weinberg for five years, breaking off contact in 1987 when he lost money.

Throughout the trial, prosecutor Bigelow sought to limit the evidence to the defendant’s recent activities, while Weinberg tried to demonstrate that he had not lied when he told investors he had friends in high places and also had voluntarily served as what he termed a “junior G-man” for the FBI.

Bigelow expressed satisfaction with the jury’s decision, saying “Mr. Weinberg’s long string of swindles has finally ended,” she said.

Weinberg faces up to seven years in prison when he is sentenced April 7 by Judge John S. Fisher, she said.

The deputy attorney general also said her office, which took over the prosecution after Fisher ruled that Reiner’s staff had a conflict of interest, might elect to retry Weinberg on two counts on which jurors deadlocked when it brings him to trial on 12 other pending fraud counts.

De Joria, Aubrey and other victims said they gave Weinberg money to invest in foreign currency trades in which they were told a hefty profit was already locked in, but money was needed to consummate the deal.

All said they trusted him because of his high-living Beverly Hills style and his political connections.

When they demanded repayment, the victims said, Weinberg gave them bad checks, then kept them at bay by claiming that checks he had deposited to cover theirs had bounced and that he would repay them soon.

There never were any futures trades, Bigelow said. Instead, Weinberg invested the money in his show business ventures and gambled away $500,000 at Las Vegas casinos.

Weinberg insisted in court that victims either misunderstood him or were lying when they testified that he had promised them a guaranteed profit within days. He and a commodities industry expert testified there is no such thing as a trade in which profits are guaranteed in advance.

He accused several victims of altering key parts of their stories to advance pending civil suits against him.

Weinberg also said that the fraud and bad-check charges against him represented only a fraction of his financial activities in the late 1980s, when up to $700,000 a month passed through his bank account.

Several jurors, noting that Weinberg remained in touch with his victims, said he might have intended to eventually repay everyone if his television shows had sold.

“But he probably took more from these people than the TV shows ever could have brought in,” said juror Sue Shinnamon. “And besides, we concluded he got the money under false pretenses.”