Embezzlement Suspects Surrender : Escrow: Santa Clarita couple plead not guilty. Harold Wiener is released; his wife, Kathy, is in jail.

One of Santa Clarita’s most prominent couples surrendered to authorities Thursday and pleaded not guilty to embezzling $2.8 million from clients of their escrow company, the largest such alleged heist in state history.

The couple--Harold and Kathy Wiener--appeared stunned to be separated when he, 51, was released on his own recognizance so that he can continue to receive treatment for his transplanted heart, and she, 47, was jailed in lieu of $1 million bail.

Kathy Wiener, once a leader of statewide escrow industry associations and a driving force in Santa Clarita charities, took small, unsteady steps as she was guided from the Los Angeles Municipal courtroom by two sheriff’s deputies.

“When they took her jewelry and shoes, the only way she remained standing was by leaning against the wall,” because she was so shocked to be treated as a prisoner, said her attorney, Melvyn Sacks.

The Wieners, who face up to 12 years in state prison if convicted, are charged with stealing the money between 1990 and 1993 from Country Oaks Escrow, a Valencia-based company founded by Kathy Wiener in 1981. State auditors, who seized Country Oaks in June, 1993, allege that the money was used to pay business expenses and support a lavish lifestyle at the Wieners’ Newhall home.

Harold and Kathy Wiener declined comment Thursday.

They have previously proclaimed their innocence by filing civil lawsuits alleging that their auditor failed to detect the shortfall, and against four pharmaceutical companies for providing heart-transplant medicine to Harold Wiener that they contend “impaired his ability to tell right from wrong.”

Attorneys representing the couple in the criminal case said they have not decided whether those allegations will be used as a defense at trial.

The Wieners fled to Utah after the seizure of their company and were working at real estate companies in Salt Lake City, according to their attorneys. But they agreed to surrender after criminal charges of grand theft, unauthorized disbursement of escrow funds and misstatements pertaining to escrow funds were filed against them March 13.

Before the couple surrendered, bail had been set at $2.7 million each. But Harold Wiener’s attorney, Jeffrey Karpel, argued Thursday that his client needs special care twice a month at a Los Angeles hospital due to the 1989 heart transplant, care which he could not receive if he were in jail.

When prosecutors did not object, Judge Craig E. Veals agreed to release Harold Wiener.

“It’s hard to argue he’s a flight risk,” said Deputy Dist. Atty. Pamela Gelman after the hearing. “If he were to flee the area, he would be signing his own death warrant.”

Sacks argued that Kathy Wiener has diabetes and other health problems, although less serious than her husband’s, but Veals declined to set her free.

“Given the magnitude of this matter, I think it is reasonable to set bail at $1 million,” Veals said.

Sacks said Kathy Wiener’s assets have been seized by the state and that she has filed for bankruptcy, so she is likely to remain in jail at least until the preliminary hearing unless new evidence surfaces.

A date for the preliminary hearing is not expected to be set for two to three months, due to the complexity of the case.

Escrow companies hold deposits and payments from real estate buyers and sellers in trust accounts until credit checks and other terms of a sale are complete. About 2,000 real estate transactions were left in limbo and 100 Country Oaks employees found themselves out of work when state audits revealed massive shortfalls in the company’s trust accounts.

Country Oaks’ cases were taken over a few days later by Santa Ana-based Burrow Escrow. Customers were reimbursed by Escrow Agents Fidelity Corp., a nonprofit agency that insures escrow companies.

A civil lawsuit by the EAFC against the Wieners was resolved Wednesday when a Superior Court judge ruled the couple was responsible for the shortfall because they presided over the company, Karpel said. However, it is not clear whether the couple will ever be able to fully reimburse the $2.7 million EAFC paid to Country Oaks customers.