The Bakersfield Californian from Bakersfield, California • Page 4

4 Dec. 12, 1974 jT (Jhr liakrrsfirlit (Enlifnrninn 5 indicted in phony loan plans SAN DIEGO (AP) Five including two former officers, have been indicted by a grand jury here in a probe of fraudulent loan schemes authorities say could involve up to $2 million. The grand jury returned the criminal indictment Wednesday in connection with an alleged $250,000 swindle involving banks in Los Angeles and San Diego. "We are currently investigating several major cases of a similar nature," said San Diego Dist. Atty.

Ed Miller. The U-count indictment named C. Wayne Kizer, 42, of La Mesa, Robert G. Smith, 53, Indio, William C. Tate, 45, San Diego, Donald E.

Gandy, 38, El Cajon, and James F. Pasternacki, 57, of San Diego. A sixth man, James L. Costello, 31, of suburban Santee, was named as an unindicted coconspirator, Deputy Dist. Atty.

James Lorenz said. Authorities said Kizer formerly was a loan officer with the defunct United States National Bank who recently, went toworkforthe' state.chartered westland Bank. Smith was described as a promoter and recipient of the bogus loans and officers said Tate was also a former bank officer. The indictment includes charges of conspiracy to defraud the Westland Bank through false collateral and financial statements, grand theft, violations of the state's corporate security laws, and violation of the state's Financial Code by concealing information concerning securities. Lorenz said Westland Bank officials had aided bis office during the six-month investigation.

He said the scheme involved the use of phony financial statements and restricted securities as collateral for a $250,000 loan tended to use in business ventures. Lorenz said investigators uncovered several other financial manipulations and added that more indictments are expected. He said the continuing investigation could involve persons outside California with ties to organized crime. State Bar testimony hits school LOS ANGELES (AP) A committee of the State Bar has heard complaints that a nonaccredited law school in San Jose was headed by a convicted felon and disbarred attorney who collected tuition from more than 40 students and then virtually abandoned the school. The "tale of woe" told Wednesday by students Bobbi Mendenhall and Marge Sponsler concerned the operation of Ocean University College of Law, once headed by David DeLoach.

The committee is considering a proposed rule which would set minimum standards for such schools. Mrs. Mendenhall, who said she had won a four-year scholarship to the school, told the hearing that rent and faculty salaries have not been paid, although some teachers stayed on. Ms. Sponsler said, "We don't know whether we are going to receive any credits for this semester.

We feel we have been wronged, misled." Committee member George Hilsinger termed the testimony "a horror story" and a spokesman for the committee said the story "shocked all of us." DeLoach, once convicted of pimping and pandering, has resigned as head of the San Jose school but other testimony Wednesday indicated that he had the firm support of at least one student at the Los Angeles campus of Ocean University. "The school has survived on the dedication of Mr. DeLoach," John Lawson testified. "I feel his conviction should not be eternal condemnation. I feel he has given high quality education." Of the 17 witnesses, some felt a set of minimum standards would drive the credited schools out of business.

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