Banker, His Family Are Held Hostage : Granada Hills: An extortionist straps fake explosives to the couple and sends husband to the bank for cash. The intruder later flees.

A bank manager, his wife and three children were taken hostage at their Granada Hills home Tuesday morning by a man who strapped what turned out to be fake explosives to the couple and threatened to blow them up unless the husband brought home a briefcase full of cash.

Banker Alan R. Butts drove to the West Hills branch of the Wells Fargo bank as ordered, but once there he contacted police. His family was freed unharmed after bomb squad experts eventually determined that both pager-like “explosive� devices were harmless and the extortionist had fled, Los Angeles police and bank executives said.

Wells Fargo spokeswomen said their employees have been the subjects of extortion attempts before, but that strapping purported explosives to an employee and his family was unprecedented and particularly galling.

“Los Angeles is the bank robbery capital of the world, so I have to deal with this almost every day,� said Lois Rice, Wells Fargo’s executive vice president and division manager. “But I’ve never gone through this kind of assault on our employees, and to involve our employees and their families and the branch like this--it’s just gone too far. I’m mad as hell.�

Los Angeles police were looking for the extortionist, who was described as a dark-haired white man in his 40s with a full beard and mustache, about 5 feet, 11 inches tall and weighing about 300 pounds. Investigators were also following a tip from bank employees that a man who seemed suspicious had been noticed in the bank’s parking lot Tuesday morning, police and bank officials said.

Detectives speculated that the extortionist--who tricked his way into the family’s home by posing as a federal investigator--was unsophisticated because of the crudely dummied explosives used and the loose organization of the scheme, which gave Butts ample opportunity to seek help.

“These aren’t rocket scientists we’re talking about,� said Detective Joe Getherall, saying it was unclear how many people were involved.

Getherall said the extortionist, apparently realizing his scheme would fail, left the family’s home about five to 10 minutes after Butts left for the bank.

The drama began about 6:30 a.m. when Butts, 45, emerged with one of his daughters from his neatly landscaped ranch house on an isolated street high in Granada Hills. The 16-year-old daughter had just entered the family van when a man, identifying himself as a federal Treasury agent, approached and told Butts he was conducting an investigation.

Getherall said the man forced Butts and his daughter back into the house and gathered the banker’s wife, Mercedes, and the younger children, a girl and boy, in the living room. There, he attached what he said were bombs and detonators to Butts and his wife. Butts was told to go to the bank in the Fallbrook Mall and return home with the money, or “harm would come to him and his wife,� Getherall said.

Instead, the bank manager called police about 8 a.m. and his staff, following prescribed security procedures, closed the bank, said police and bank officials.

Detectives and members of the bomb squad were dispatched to the bank in plain clothes and unmarked cars in case the extortionist had colleagues who would notice their arrival, Getherall said. A similar procedure was followed at Butts’ home, where police set up a command post at a nearby Department of Water and Power station and discreetly tried to reroute traffic without openly cordoning off the neighborhood.

At the bank, bomb squad members X-rayed the devices strapped to Butts’ arm and quickly determined they were fakes, Getherall said.

About 9 a.m., police placed a call to the home and Butts’ wife told them the man had left. Wary that the man might still be there and threatening the woman, police did not immediately go to the house.

Over the next three hours, police watched the house from a distance, ready to detain the man if he were still in the house and defuse any real bombs.

When Butts called the house about noon and was told by his wife that the man had departed, he told her to let the three children leave the house. Mercedes Butts was then instructed to come out and the bomb squad confirmed that the supposed bomb attached to her arm also was a fake.

Butts, wearing a tie-less white shirt open at the neck, smiled tensely as he walked from his house to a police car for an interview at the Devonshire Division headquarters. His wife, wearing a red shirt and pants, appeared weary as she shepherded the three children from the house into a waiting police vehicle, which would take them to a baby-sitter’s.

Getherall, noting that bank employees are often targets of extortion and their children the subjects of attempted kidnapings, said the incident should make all upper-level bank personnel more cautious.

When bank employees who have access to vaults “come out of their houses in the morning, they should be aware of any suspicious persons or vehicles,� he said. “They should know what their children are wearing and how to contact them immediately by telephone� to determine if an extortion demand is genuine.

Rice said that as a result of Tuesday’s incident, Wells Fargo was establishing a standing reward of a minimum $5,000 for information leading to the conviction of such extortionists.

Times staff writer Hugo Martin contributed to this story.