Arson Case Briefs

provided by the Bureau of Alcohol, Tobacco, and Firearms
for more information on this Brief, contact:
ATF, Arson and Explosive Programs Division - (202) 927-7930

Charter Mortgage
Modesto, California
December 11, 1990

A. IN: 93240-91-3521Z

B. CASE AGENT: Gregory Barnett

C. FIELD DIVISION/OFFICE: San Francisco/Sacramento

D. PHONE: 916-498-5100

E. PROSECUTOR:

Assistant U.S. Attorney
Steve Lapham
Eastern District of California

F. SYNOPSIS:

On December 11, 1990, an arson destroyed the Charter Mortgage office building in Modesto, California, at a loss of $500,000. The fire started in the basement and spread rapidly throughout the building. The structure, which housed five separate commercial office spaces, was owned jointly by Lloyd Ploutz and Sheldon Thompson. Ploutz was indicted on April 15, 1992, for arson and mail fraud.

G. CHARGES:

United States Code

Title 18, section 844(i), Arson
Title 18, section 844(h)(1), Arson to commit another felony
Title 18, section 1341, Mail fraud

H. EVIDENCE:

1. In November 1988, Lloyd Ploutz, Ed Beneker, and Sheldon Thompson purchased an office building from June Longley. Thompson and his company, Charter Mortgage (a private money mortgage company), had rented the building since 1974.

2. At that time, Charter Mortgage was being sued by one of its borrowers. In an attempt to protect the building from the law suit, Thompson, Ploutz, and Beneker purchased it in the name of a corporation they had recently formed, Mariposa Land and Development (MPL&D), and Thompson's name was deliberately omitted from title documents. Through Charter Mortgage, Thompson secured a second deed of trust from two of his investors. Longley carried back $120,000 secured by a first deed of trust with MPL&D. Between January and June 1989, Thompson paid rent to MPL&D with the understanding that Beneker and Ploutz would make the payments on the first and second deeds of trust. Thompson later learned that Beneker and Ploutz had not been making these mortgage payments.

3. In June 1989, Ploutz attempted to evict Thompson from his office over a dispute involving some furniture Ploutz had purchased. Thompson reminded Ploutz that he (Thompson) had a third interest in the building. At that point, Ploutz pulled out the title documents to the building and showed Thompson he was not legally documented as part owner.

4. In October 1989, June Longley filed a Notice of Default against MPL&D for failure to pay principal and interest payments on Longley's first deed of trust.

5. In November 1989, Thompson filed suit and recorded a Notice of Lis Pendens against MPL&D, claiming his one-third interest in the Charter Mortgage building.

6. In early December 1989, Charter Mortgage filed a Notice of Default against Ploutz for his failure to pay off an earlier Charter Mortgage loan he had used to purchase his residence. Ploutz had made no payments on the loan, which was due and payable on June 14, 1989.

7. Later that same month, Ploutz negotiated a $55,000 loan with his mother-in-law, Lucille Sabers, to be secured by a third deed of trust in the name of Mariposa Land and Development against the Charter Mortgage building. Ploutz did not record the note and deed, nor did he list Sabers as a loss payee on the insurance policy.

8. In early April 1990, Charter Mortgage filed a Notice of Trustees' Sale giving notice that Ploutz' house would be sold at public auction on May 3, 1990. On May 3, 1990, Ploutz filed for bankruptcy in an attempt to stop the trustees' sale of his house.

9. On May 9, Ploutz recorded the note and third deed of trust, securing the loan he had obtained from Sabers.

10. On May 24, Eugene Thompson, Sheldon Thompson's father, purchased half interest in the second deed of trust used to buy the Charter Mortgage building.

11. On May 25, Ploutz served Sheldon Thompson with an eviction notice, giving Thompson 30 days to move Charter Mortgage out of the building. Thompson ignored the notice and remained in the building.

12. On August 23, 1990, Charter Mortgage obtained the title to Ploutz' residence through the trustees' sale. Four days later, Beneker transferred his interest in the Charter Mortgage building to Sheldon Thompson. After this transaction, the building was owned solely by Sheldon Thompson and Lloyd Ploutz (MPL&D), subject to the first, second, and third deeds of trust.

13. In October 1990, Eugene Thompson purchased the remaining 50 percent interest in the second deed of trust used to buy the Charter Mortgage building by MPL&D, making him beneficiary of the deed. Thompson then filed a Notice of Default against MPL&D for failure to pay on the second deed of trust.

14. In November 1990, Ploutz moved out of the house on which Sheldon Thompson had foreclosed.

15. On November 27, 1990, Sheldon Thompson served Lucille Sabers with the law suit he had filed against MPL&D for his one-third interest in the Charter Mortgage building.

16. The next day, Ploutz contacted his insurance company and added Sabers to the MPL&D policy as a loss payee. Ploutz also requested that the policy limits be increased from $210,000 to $325,000. In addition, Ploutz requested that the contents of his office in the Charter Mortgage building be added to the policy, for $25,000 in coverage.

17. On November 30, 1990, Ploutz mailed letters to the tenants in the Charter Mortgage building advising them they were not covered by MPL&D's insurance and should obtain their own personal property insurance. At the same time, Ploutz moved the majority of the furniture and office equipment out of his office.

18. On December 10, 1990, Ploutz purchased a 1977 white Ford LTD for $100 from a towing company in Modesto, California. Ploutz later claimed that he towed the car to Fresno, California, where he spent the night.

19. While in Fresno, Ploutz called Beneker at his home and made a point to let Beneker know he was in Fresno and would be out of town for a couple of days. Beneker said the call was unusual because Ploutz did not share personal information with him and they had not kept in touch since severing their business relationship.

20. On December 11, 1990, at approximately 12:01 a.m., a fire was reported at the Charter Mortgage building. Two witnesses heard an explosion and approached the burning building from the rear alley. The witnesses saw what they described as an older white Ford or Mercury sedan pulling out of the parking lot adjacent to the building. As the car approached the witnesses, the driver quickly braked, turned the car around and sped away in the opposite direction.

21. During the investigation, Ploutz initially denied owning a white car and claimed he was out of town on business at the time of the fire. The LTD that Ploutz had purchased was later located at an associate's residence in El Centro, California. When confronted, Ploutz said he had purchased the car to leave at the San Felipe airport in Mexico. Ploutz owned property in San Felipe and said he wanted to have a car at the airport for the occasions he flew there. When asked why he didn't mention the white car to the investigators after the fire, Ploutz said that he was asked if he knew anyone who owned a white car, not if he owned one.

22. A financial analysis conducted by an ATF auditor concluded that at the time of the fire, Ploutz' businesses did not have sufficient funds to finance their various real estate projects and that Ploutz' personal account was "adverse." This opinion was based on Ploutz' negative net worth, exceedingly high liabilities, zero balances in bank accounts, numerous NSF charges, foreclosure suits, liens and judgements.

23. The investigation also revealed that in 1979, a residential structure owned by Ploutz was destroyed by arson. Ploutz claimed to have been on a business trip at the time, but he had increased his insurance coverage a few weeks prior to the fire. When asked about previous fires, Ploutz did not mention this fire and denied any previous insurance claims for fire loss.

I. LEGAL ISSUES AND PROBLEMS:

At Ploutz' first trial on November 18, 1992, he was found guilty of arson and mail fraud.

Shortly after the conviction, Ploutz filed a motion for a new trial based on new evidence. Ploutz claimed to have found a witness who had seen two individuals speeding out of the parking lot behind the building in a white pickup truck. The two individuals were located and interviewed. They were janitors who worked at an adjacent bank. Because they were afraid the fire would spread to their vehicle, they ran to it and sped away.

The district court judge nevertheless felt this new evidence should be heard, and he granted a new trial. The Government appealed to the Ninth Circuit Court of Appeals, but the Court affirmed the granting of the motion for a new trial without comment.

A second week-long trial was held on July 18, 1995. Despite testimony from the witnesses who saw the white car at the fire, a number of jurors said they were confused by the "alibi" jury instruction that required the Government to place Ploutz at the scene of the fire. The jury was unable to reach a verdict, and the judge ruled a mistrial.

J. VERDICT AND SENTENCING:

On November 22, 1996, following a third trial, Ploutz was convicted of Arson, Arson to Commit Another Felony, and Mail Fraud. At this trial, the judge modified the "alibi" instruction and added an "aiding and abetting" instruction to avoid confusion regarding the necessity of proving the defendant's whereabouts at the time of the fire. On March 3, 1997, Ploutz was sentenced to 93 months in prison and 36 months' supervised release.