Agents Seize Data From Interlink : Investigation: The Costa Mesa-based firm is raising capital to build a fiber-optic system that would transmit images of callers in downtown L.A.

COSTA MESA â€”  An Orange County company that has raised more than $9.9 million to build a video telephone network in downtown Los Angeles was searched Tuesday by 50 law enforcement agents who confiscated company records as part of a federal securities fraud investigation and a state probe of the alleged sale of unregistered securities.

Business records and computers were seized from the Costa Mesa and Century City offices of Interlink Data Network of Los Angeles Inc., said Pamela Prince, a spokeswoman for the U.S. Postal Inspection Service.

Agents from the Postal Inspection Service, the state Department of Corporations, the state Department of Insurance’s fraud division and the Costa Mesa Police Department joined in the search.

Prince said no Interlink employees were indicted or arrested in connection with the investigation, which also seeks evidence of possible wire or mail fraud. Costa Mesa police did, however, arrest two people who had outstanding misdemeanor arrest warrants--Robert James, 47, and Veronica Lopez, 21. Both were later released.

Robert C. Rosen, an attorney for Interlink, said the company would fully cooperate with authorities in any investigation. He said the company may open for business today.

Interlink used televised infomercials and a force of telephone solicitors to raise funds for the construction of a 21-mile fiber-optic network that would use $3,995 videophones it would manufacture to transmit images of callers between buildings in downtown Los Angeles and along Wilshire Boulevard. Construction of the network has not yet begun.

The privately held company said that it has raised $2.4 million in equity through the sale of stock and $7.5 million from limited partners. President Michael Gartner, who could not be reached Tuesday, has said that the company is raising an additional $10 million to pay for manufacturing the videophones.

About 30 people were in the Interlink headquarters on the 11th floor of the Performing Arts Tower, 650 Town Center Drive, when the search began Tuesday morning, said M.G. Christensen, a postal inspector at the scene. Records and other evidence will be turned over to the U.S. attorney’s office, he said.

Across the hallway from Interlink, the offices of stock broker-dealer Maxxel Securities Inc. were also empty and being searched by agents. Interlink documents say that it had hired Maxxel to solicit investors for its private offerings of limited partnerships. Maxxel officials in Dallas refused comment Tuesday.

Videophones, which allow callers to see the person to whom they’re speaking on a small video screen, were invented years ago but have not caught on in the marketplace. One of the biggest drawbacks of existing videophones are the jerky images they produce--a problem resulting from the inability of standard phone lines to send data fast enough to avoid time delays.

But Gartner has said that Interlink’s phone has an advantage over videophones of other manufactures, such as American Telephone & Telegraph, because it has optical switching technology that uses light signals rather than electric ones, allowing large volumes of data to flow through fiber-optic phone lines like a river.

Optical switches can theoretically manipulate light signals directly, without the need to convert them to far slower electric signals that create a bottleneck in a system.