Seven-year sentence for La Canada woman in federal fraud case

From Thom Mrozek:

LOS ANGELES – A La Caada woman who sold fake art – including works purported to be by Picasso, Dali and Chagall – through a rigged televised art auction has been sentenced to 84 months in federal prison.

Kristine Eubanks, 52, was sentenced late yesterday by United States District Judge Gary A. Feess, who said that the fraud scheme was “audacious in its scope” and “blatantly illegal.”

The scam, run through a company called Fine Art Treasures Gallery, falsely told customers that art sold on the company’s television show had been found at “estate liquidations all over the world.” Instead, Eubanks and others sold fake and forged art that they had bought from suppliers, as well as forgeries they had printed themselves and signed on behalf of the artists. The scam brought in well over $20 million from more than 10,000 victims across the country.

Eubanks pleaded guilty in April 2007 to conspiracy to commit mail fraud, wire fraud, interstate transportation of stolen property and to filing a false income tax return. Through this company, Eubanks and her conspirators operated an art auction television show, which aired on Friday and Saturday nights on DirecTV and The Dish Network, and sold art to customers around the United States. Eubanks and her husband, Gerald Sullivan, ran the scheme from 2002 through 2006.

Eubanks admitted that she obtained fake art from various suppliers, and printed other art works in her own printing shop, and sold that bogus art on the auction as genuine. Eubanks and others forged signatures on some of the works, including purported lithographs from Picasso, Chagall and Dali. To support the scam, Eubanks also forged Certificates of Authenticity for certain pieces and provided falsified appraisals for some of the jewelry that was sold to customers. Eubanks and others also rigged the bidding for the auction process by arranging for fake bids to be announced on the program to falsely drive up prices for the art they sold to the public.

Eubanks’ husband, Gerald Sullivan, 54, previously pleaded guilty to conspiracy to commit wire fraud and interstate transportation of stolen property. He is scheduled to be sentenced by Judge Feess on May 24, at which time he faces a statutory maximum sentence of six years in federal prison.

As part of the investigation into Fine Arts, federal authorities seized approximately $3.8 million from bank accounts controlled by Eubanks and Sullivan. Those funds have been forfeited to the government, which is in the process of notifying thousands of potential victims that they may have purchased bogus artworks.

This case was investigated by the national Art Crime Team at the Federal Bureau of Investigation, IRS-Criminal Investigation, and the Los Angeles Police Department’s Art Theft Detail.

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La Canada attorney charged in kiddie porn case

From Sandi Gibbons in the District Attorney’s Office:

LOS ANGELES – An attorney investigated as part of a U.S. Immigration and Customs Enforcement (ICE) probe of hardcore child pornography on the Internet pleaded no contest today to one felony count each of possessing child pornography and an assault rifle.

Deputy District Attorney Susan Schwartz of the Justice System Integrity Division said Walter Loustari, who remains free on bail, entered the plea before Los Angeles Superior Court Judge William Ryan. Sentencing was scheduled for March 3.

Schwartz said the 58-year-old defendant entered an “open” plea, meaning it was not part of a negotiated settlement. His sentence could range anywhere from probation to three years and eight months in state prison.

Loustari, who had a law office in La Canada and lived in Glendale, was charged in October 2009 following an investigation by ICE and the Glendale Police Department.

Authorities said the investigation began in October 2006 as part of ICE’s Operation Predator, in which the agency works closely with local agencies to investigate child pornography throughout the United States.

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La Canada city update on Station Fire

From the city’s Web site:
(As of August 29, 2009, 1:00 p.m.)
The “Station Fire” started at approximately 4:00 p.m. on Wednesday, August 26, 2009
Approximately 7,000 acres have burned; 5% containment; fire is largely fuel driven; currently
no significant winds
Per instruction from County public safety personnel, the City of La Caada Flintridge is
announcing an immediate mandatory evacuation notice for residences on: Ocean View Blvd.
n/o Bristow Dr., including Bristow Dr., Derwood Dr., Manistee Dr., and Highrim Rd.; generally
e/o Palm Dr. at Ravista Ln., n/o Vista Del Valle, and w/o Angeles Crest Highway; Greenridge
Dr., Forest Green Dr., Ridge Ct., and Starlight Crest Dr. (through address 502); Big Briar Way
(off Haskell St.); La Canada Blvd. n/o El Vago St., Donna Maria Ln., Indian Dr., Alta Canyada
Rd. n/o El Vago St., Hacienda Dr., Linda Vista Dr., and Alta Canyada Rd. n/o Linda Vista Dr.
Residents in these areas are asked to assemble their families and leave the area. An
evacuation center is set up at La Caada High School, located at 4463 Oak Grove Dr., where
the Red Cross is ready to receive those coming from the evacuation area. Please heed
directions from Sheriff’s deputies and fire personnel to ensure that all residents are able to
depart in a safe manner.
According to Mr. John Velasco of JPL, the Lab will be closed until at least Sunday evening.
Fire personnel are battling the fire near Alta Canyada; thus far their efforts are holding
Units for structure protection are in place and will remain and be supplemented as necessary
12 helicopters and 6 fixed wing aircraft will be in the air today
All concerned residents should packed and be prepared to leave if a mandatory evacuation
order is issued; La Caada High School is set up and available to shelter evacuees (30 people
have sought shelter); Crescenta Valley and John Muir High Schools are backup locations
If you and your family are evacuated from your residence or business, please check in with
the Red Cross at La Canada High School, even if you will be staying temporarily with family
and friends at another location; this will assist in accounting for community members if
The Pasadena Humane Society is available at La Canada High School for pet care/shelter
Review your individual preparedness plan and continue to monitor local news and this
website for updates
164 homes have lost electricity in the Country Club area. No timeframe for restoration as
SCE cannot enter this area due to fire danger.
The City will continue to notify residents via its reverse 911 system with critical public safety
information (calls to land lines only)
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FBI seeks Sleeves Bandit


A takeover specialist targeting banks in central California is being sought by the FBI. The Sleeves bandit has apparently worked as far south as La Crescenta and La Canada Flintridge, according to a press release issued Friday.

Here’s a larger gallery of photos:


Press release on the jump…

Continue reading “FBI seeks Sleeves Bandit” »

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