VISALIA, Calif. -- Charles Dederich, founder of Synanon, and several other top leaders of his organization, were arrested Tuesday on charges of operating a securities fraud in Arizona.
Dederich and eight other suspects were arrested at the Synanon ranch in the Sierra foothills. Three others were taken into custody at Visalia, Los Angeles and Phoenix, and one was still being sought Tuesday night.
Tulare County deputies and Arizona officials made the arrests at the Home Place ranch near Badger, Calif., early Tuesday without incident. The suspects were arraigned later in the day in Visalia.
Dederich was released on $100,000 bond and the others on $5,000 bond each.
Dave McCormick, deputy attorney general for Arizona, said the defendants indicated they would not fight return to Arizona.
Dan L. Garrett, a former attorney for Syanon, surrendered in Phoenix and was released on $25,000 bond.
At a news conference in Phoenix, Arizona Attorney General Bob Corbin said a grand jury handed down the indictments last Thursday.
The defendants are accused of establishing an Arizona corporation, Home Place, Inc., 'for the purposes of securities fraud.'
The indictments said they conspired to make illegal sales of stock in the corporation, which Corbin said was established as a means of diverting assets out of California if authorities in that state acted against Synanon.
All counts in the indictment are felonies and each carries a possible prison sentence of up to four years and a fine of up to $150,000.
Tulare County Sheriff Robert Wiley said the nine arrests at the Synanon Home Place ranch at Badger were made at dawn Tuesday without incident. A tenth suspect, Harvey Hecht, surrendered later in the day to Visalia police, and Lynn Ehrnstein, an attorney, surrendered in Los Angeles.
An additional suspect, not named, was in Nevada and expected to surrender Wednesday, McCormick said.
Dave McCormick, deputy attorney general for Arizona, said the defendants indicated they would not fight return to Arizona.
Dan L. Garrett, a former attorney for Synanon, surrendered in Phoenix and was released on $25,000 bond.
At a news conference in Phoenix, Arizona Attorney General Bob Corbin said a grand jury in Phoenix handed down the indictments last Thursday.
The defendants are accused of establishing an Arizona corporation, Home Place, Inc., 'for the purposes of securities fraud,' said Corbin.
The indictments said they conspired to make illegal sales of stock in the corporation, which Corbin said was established as a means of diverting assets out of California if authorities in that state acted against Synanon.
Corbin said at that time, Synanon was being investigated by the California attorney general's office.
Corbin said at a news conference that Home Place 'was set up for the purposes of securities fraud.'
All counts in the indictment are felonies and each carries a possible prison sentence of up to four years and a fine of up to $150,000.
Also arrested were: Charles E. Dederich Jr., a board member; Cecilia Dederich Schiff, current foundation board chairman; Dr. David Schwartz; Louis Delgado, head of the foundation's graphic department; David Ross, chief financial officer; Russ Mumford, investiment advisor; Jack Harrison, the foundation's legal assistant; and Terry Bourdette, a secretary.
Harvey Hecht surrendered later in the day to Visalia police, and Lynn Ehrnstein, an attorney, surrendered in Los Angeles.
An additional suspect, not named, was in Nevada and expected to surrender Wednesday, McCormick said.
The indictment said the defendants conspired to make illegal sales of Home Place stock from September, 1978, through December, 1980. It also said Synanon leaders and Home Place made numerous sales of unregistered stock in Home Place and sold the stock illegally through salesmen who were not registered in Arizona.
Corbin and John Pressley Todd, an assistant attorney general who headed the six-month-long investigation, said it was not known how much money was involved in the stock sales and how many people may have bought the stock.
The indictment said Ehrnstein and former officials of Home Place filed misleading papers with the Arizona Corporation Commission in 1980 when Home Place sought to register a stock offering.
Home Place owned and operated a motel, a furniture factory and several apartments in Lake Havasu City and owned furniture outlets in Las Vegas and Bullhead City, Corbin said.
Synanon was founded by the elder Dederich in 1958 as a storefrontalcohol and drug therapy clinic in Ocean Beach, Calif.
