Woman Linked to Marcos Faces Fraud Charges

Former starlet Dovie Beams de Villagran, self-proclaimed former mistress of deposed Philippine President Ferdinand E. Marcos, was indicted along with her husband on Wednesday on charges that they fraudulently obtained $18 million in loans from 13 banks.

A 42-count indictment returned by a federal grand jury charges De Villagran and her husband, Sergio Villagran, with claiming thousands of dollars in non-existent income and equity in applying for loans to support the couple’s lavish life style.

The indictment also charges the couple with stashing more than $6-million worth of antique furnishings and artwork, including a valuable collection of ancient Chinese ceramics, in an attempt to conceal them from creditors.

“This indictment represents one of the most massive cases of fraud against financial institutions in the history of Los Angeles,” U.S. Atty. Robert C. Bonner said at a news conference announcing the indictment.

De Villagran, 55, whose claim that she has tape-recorded lovemaking sessions with the deposed Philippine president earned her the nickname “Marcos’ Lovie Dovie,” was arrested without incident Wednesday afternoon at a small home she was renting in San Gabriel. Her husband, 51, was arrested at the home earlier in the day.

“They are arresting the wrong people,” De Villagran told reporters after a brief appearance before U.S. Magistrate Joseph Reichmann. “The guilty people are the Chapter 11 (bankruptcy) people. . . . Check the papers out in court about the crimes I have charged the bankruptcy trustee with.”

According to the indictment, De Villagran and her husband grossly inflated their financial worth and income from various business activities, including a real estate company known as Villagran Properties and International Auto Brokers. The auto brokerage purportedly exported millions of dollars worth of customized American automobiles to countries in the Middle East.

The couple is also accused of falsifying federal income tax returns and financial statements between 1983 and 1985 in an attempt to qualify for loans, many of which were needed to pay off existing loans on the couple’s vast real estate holdings, according to Assistant U.S. Atty. Ronald J. Nessim, who is prosecuting the case.

By the time the couple filed for bankruptcy on Feb. 27, 1986, they claimed debts exceeding $24 million and apparent assets sufficient to cover “maybe 10 cents on the dollar,” Nessim said.

In addition to the bank fraud counts, the indictment also charges the Villagrans with two counts of bankruptcy fraud in connection with the allegedly concealed antiques and artworks and allegedly false sworn statements De Villagran submitted to the court.

Although De Villagran’s claim that she had a liaison with Marcos did not figure in the indictment, federal prosecutors said there is evidence that bank officers were aware of the relationship when they approved loans to help pay for the couple’s nearly two dozen lavish homes in Pasadena and Beverly Hills.

“That may have been one of many factors they relied on in feeling these were good loans,” Nessim said.

However, federal prosecutors said they have no evidence that Marcos put up the money to buy any of the properties to which the Villagrans held title, including a 30-room French Baroque mansion in Pasadena and residences in Beverly Hills, some of which are worth millions.

Richard Kendall, a Los Angeles lawyer who is representing the Republic of the Philippines in an attempt to recover assets Marcos secreted in the United States, said government investigators have come up with no clear financial ties between De Villagran and Marcos.

Among the banks allegedly defrauded were Bank of America, Lloyds Bank, Imperial Bank, United Mercantile Bank and Security Pacific National Bank. Some of the banks issued loans in excess of $1 million secured by the Villagran’s properties.

Other banks allegedly defrauded by the couple have since failed, for a variety of reasons, Bonner said, and he added: “Regrettably, Southern California has become the capital of bankruptcy and bank fraud for the nation. This case is an indication that we are taking the problem seriously.”

In a report filed with the bankruptcy court, examiner R. Todd Neilson documented instances in which the couple had transferred property to relatives and provided financial statements which were “clearly fabricated . . . (and) flagrantly misrepresentative” of the couple’s actual financial condition.

According to Neilson, the couple overstated their 1985 investment income by $602,523 and their net income by more than $2.6 million.

Moreover, the examiner’s report states, De Villagran explained discrepancies in the couple’s bank accounts by indicating that the couple had other accounts, accounts which she then refused to disclose.

“She refused to inform me as to the location of the additional bank accounts or the country in which they may be located,” Neilson wrote. “I was unable to obtain any information regarding the recipients of the funds, since Mrs. De Villagran firmly refused to disclose the names or whereabouts of any individual or company which may have received those purported funds.”

Dovie de Villagran, named in all 42 counts of the indictment, faces a maximum of 141 years in prison and a $10.5-million fine if convicted on all counts. Her husband faces a maximum of 136 years and a $10.25-million fine.

Magistrate Reichmann set bail for the two at $250,000.