Larsen gets prison term, told to repay investors
By Mike Freeman
SAN DIEGO UNION-TRIBUNE STAFF WRITER
A former executive involved in the notorious PinnFund financial scam was sentenced yesterday to more than six years in federal prison and ordered to pay nearly $6.7 million in restitution.
Tommy A. Larsen, 55, of Vista, pleaded guilty in December to mail fraud, wire fraud, money laundering, obstruction of justice and tax evasion. He was sentenced by U.S. District Judge Marilyn Huff.
Larsen was president of PinnLease, a subsidiary of Carlsbad- based PinnFund. Prosecutors contend he orchestrated a complex scheme of bogus equipment leases, then received kickbacks from those leases for himself and PinnFund.
Larsen also admitted to lying in a federal court case, evading taxes by charging personal expenses to PinnFund and structuring his salary to avoid payroll taxes. Some of the money was hidden in offshore banks.
PinnFund, a mortgage lender that employed more than 200 people, was at the center of an elaborate Ponzi scheme that bilked investors out of hundreds of millions of dollars.
Authorities said PinnFund chief executive Michael Fanghella and associate James Hillman promised 160 investors double-digit returns for investing more than $300 million in PinnFund to fund mortgage loans.
Instead, the money went to cover millions in operating losses at PinnFund, o enrich executives and to provide previous investors with their monthly returns.
PinnFund collapsed in 2001 after the Securities and Exchange Commission filed a lawsuit exposing the scam. Criminal charges followed against several of the ringleaders, including Fanghella, who was sentenced in February 2003 to 10 years in prison.
Larsen wasn't a central figure in the initial Ponzi scheme. But prosecutors said he was part of a scam to raid more investor money through the equipment leasing subsidiary.
Larsen's son, Kim A. Larsen, 34, also was sentenced yesterday, receiving 21 months in prison. Kim Larsen ran Copy Fax, which supplied office equipment to PinnFund. He was ordered to pay a $5,000 fine.
"These sentences address an extensive and sophisticated leasing fraud that helped keep the central PinnFund Ponzi scheme going," U.S. Attorney Carol Lam said.
Tommy Larsen is in custody. Kim Larsen is free pending a decision on which federal prison he'll be assigned to serve his sentence.
Including Larsen, seven people linked to PinnFund have pleaded guilty to federal fraud charges. Hillman, one of the top money raisers in the scheme, is fighting charges. No trial date is set in his case.
( full stories on PinnFund here: