Bernard L. Madoff’s massive fraud stunned some of the wealthy denizens of Malibu Colony, especially when a couple devastated by the scheme surrendered their oceanfront home to Wells Fargo Bank.
However, some neighbors say the real shocker came when they saw one of the bank’s top executives spending weekends in the $12-million beach house and hosting eye-catching parties there. What’s more, Wells Fargo spurned offers to show the property to prospective buyers, a real estate agent said.
“It’s outrageous to take over a property like that, not make it available and then put someone from the bank in it,” said Phillip Roman, an 18-year Colony resident who lives a few homes away from the property.
Residents identified the house’s occupant as Cheronda Guyton, a Wells Fargo senior vice president who is responsible for foreclosed commercial properties.
Guyton could not be reached at her downtown Los Angeles office. Wells Fargo declined to discuss Guyton, saying in a statement that representatives “don’t discuss specific team member situations/issues for privacy reasons.” But the bank said it would “conduct a thorough investigation of the allegations” by neighbors.
The bank also said its ethics code wouldn’t allow employees to make personal use of property that had been surrendered to satisfy debts.
Such conduct would pose a conflict of interest, said W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley University in Waltham, Mass.
“For a business to allow this to happen in today’s ethically charged climate is quite suicidal,” he said. And because Madoff’s fraud was the root cause of the situation, he added, “it’s like rubbing salt into the wounds of a national tragedy.”
The home’s former owners, Lawrence and Linda Elins, didn’t respond to requests for an interview.
Their real estate agent, Irene Dazzan-Palmer, said she had tried to lease the home for the couple last spring after they were “devastated” by Madoff losses. But before she could find a renter, the couple signed over the property to Wells Fargo to help satisfy a larger debt, she said.
Wells Fargo subsequently denied requests to show the house to prospective buyers, said Dazzan-Palmer, a Coldwell Banker specialist in Malibu Colony properties.
“I found it amazing at first when the bank wouldn’t show the house to some friends of ours who were interested in buying it,” said Roman, the neighbor.
Residents of the gated Malibu Colony said they obtained Guyton’s name from the community’s guards, who had issued her a homeowner’s parking pass.
Wells Fargo said this week that its agreement with the prior owner required it to keep the home off the market “for a period of time” but declined to elaborate. The company said it now planned to list the property for sale “in the near future.” The bank also confirmed that Guyton headed its foreclosed commercial property operation.
Malibu Colony stretches three-quarters of a mile along the beach in the heart of Malibu. Its residents include actor Tom Hanks, former Univision Chairman A. Jerrold Perenchio, and high-profile investment banker Michael E. Tennenbaum.
The home the Elinses occupied is a sleekly modern, 3,800-square-foot, two-story structure built in the early 1990s by clothing designer Nancy Heller. Its huge glass windows look out on a patio, deck and the Pacific. On the street side is a wall of mostly beige tile and metal.
Colony residents said the woman they believe to be Guyton, along with her husband and two children, took up occupancy in home No. 106 in Malibu Colony shortly after Lawrence Elins turned it over to Wells Fargo Bank on May 13.
The residents said the family spent long weekends at the home and had guests over, including a large party the last weekend of August that featured a waterborne arrival.
“A yacht pulled up offshore, with one of those inflatable dinghies to take people back and forth to the shore,” said Roman’s wife, Elaine Johnson. “About 20 people got taken over in the dinghy.”
Malibu Colony employees who were not authorized to speak publicly said the community association at the start of the summer had issued Guyton a parking permit of the type given to Colony homeowners.
Residents also gave The Times the license plate number of a 2007 Volvo sport-utility vehicle that they say they had seen parked in the garage at No. 106. A check of motor vehicle license plates conducted by The Times found that vehicle to be registered to Guyton.
When a Times reporter used the buzzer at the home’s steel gate on Labor Day, a woman answered the intercom but declined to identify herself or come to the gate.
Asked whether the home had been foreclosed on, she said: “It’s not foreclosed. It’s owned by Collin Equities” — a Wells Fargo unit that liquidates foreclosure properties.
The woman on the intercom denied that she was living at the house or had been using it periodically over the summer. Asked whether she could say why she was at the home, she answered, “No, I cannot.”
On the website for a lenders conference next month in San Diego, a biography says Guyton, 39, obtained an MBA from USC, worked in the state controller’s office during the administration of former Gov. Gray Davis and now manages a team of foreclosed-property managers and a separate team that restructures troubled commercial loans.
Property records show she has owned a home in the Fairfax District of Los Angeles since 2004.
Elins, the previous owner of the Malibu Colony home, is identified in Securities and Exchange Commission filings as the former president of Applause Inc., a toy and gift manufacturer, who since 1988 has headed Elins Enterprises, a financial and real estate firm in Sherman Oaks.
They bought the Malibu Colony home in 1996 and refinanced it for $3 million with Wells Fargo Bank in December 2007, property records show. The home’s value was recorded at $12 million when the property was transferred in May to Wells Fargo.
In January, Wells Fargo said it had written off $294 million of loans that had been secured by customers’ investments with Madoff, whose Ponzi scheme collapsed late last year.
Dazzan-Palmer, the real estate agent, said she quickly found a person who was prepared to make “a very big offer in cash” to buy the property, but she wasn’t able to show the house to any potential buyers. The bank said it was considering offers from other agents, she said, “and then someone moved in.”
“We thought maybe it had been sold,” she added. “It was a big mystery. All we knew was that Larry had lost the house and that someone was living there.”
Because Dazzan-Palmer had the listing to lease the property, other agents have contacted her about the home, she said. She has a website with photos of the home at www.106malibucolony.com “> www.106malibucolony.com .
“I’ve had calls from about 20 agents saying they’ve got buyers and ‘When can you get us in?’ ” she said. “And I say, ‘My client doesn’t own it anymore. I brought the bank an offer myself, they didn’t respond, and that’s all I know.’ ”
What’s Your Take On The Matter? Register and/or sign in and sound off!
History has a tendency to repeat itself if we let it.
The Fourteenth Amendment of the Constitution was passed by Congress in 1867. The amendment was designed to grant citizenship to and protect the civil liberties of recently freed slaves. Most Southern states refused to ratify this amendment and therefore Radical Republicans such as Thaddeus Stevens, Charles Sumner, Benjamin Wade, Henry Winter Davies and Benjamin Butler urged the passing of further legislation to impose these measures on the former Confederacy.
This resulted in the passage of the first Reconstruction Act on 2nd March, 1867. The act along with a supplement passed on March 23, 1867 guaranteed the right of freed black men to register and vote.
In 1867, black men voted for the first time. Over the course of Reconstruction, more than 1,500 African Americans held public office in the South. They did not hold office in numbers representative of their proportion in the population, but often elected whites to represent them.
Although resigned to the abolition of slavery, many former Confederates were not willing to accept the social changes nor political domination by former slaves. The defeated were unwilling to acknowledge that their society had changed. In the words of Benjamin F. Perry, President Johnson’s choice as the provisional governor of South Carolina: “First, the Negro is to be invested with all political power, and then the antagonism of interest between capital and labor is to work out the result.
The fears, however, of the mostly conservative planter elite and other leading white citizens were partly assuaged by the actions of President Johnson, who ensured that a wholesale land redistribution from the planters to the freedman did not occur. President Johnson ordered that confiscated or abandoned lands administered by the Freedman’s Bureau would not be redistributed to the freedmen but be returned to pardoned owners. Land was returned that would have been forfeited under the provisions of the Confiscation Acts passed by Congress in 1861 and 1862.
Southern state governments quickly enacted the restrictive “black codes”. The Black Codes indicated the plans of the southern whites for the former slaves. The Black Codes would limit blacks’ ability to control their own employment. The Black Codes outraged northern opinion. They were overthrown by the Civil Rights Act of 1866 that gave the Freedmen full legal equality and the reconstruction act and it supplement gave them citizenship and the right to vote.
In 1874 the white militias coalesced into paramilitary organizations such as the White League . It was a new organization that operated openly and had political goals: the violent overthrow of Republican (the party of Lincoln) rule and suppression of black voting. Democrats encouraged the poor whites to ally with them over race. As a result White League chapters soon rose, receiving financing for advanced weaponry from wealthy men. In one example of local violence, the White League assassinated six white Republican officeholders and five to twenty black witnesses in 1874. Four of the white men were related to the Republican representative.
Similarly, the Red Shirts, another paramilitary group, arose in 1875 in Mississippi and the Carolinas. Like the White League and White Liner rifle clubs, these groups operated as a “military arm of the Democratic Party”, to restore white supremacy.
An explosion of violence accompanied the campaign for the Mississippi’s 1875 election, in which Red Shirts and Democratic rifle clubs, operating in the open and without disguise, threatened or shot enough Republicans to decide the election for the Democrats.
The campaigns and elections of 1876 were marked by additional murders and attacks on Republicans in Louisiana, North and South Carolina, and Florida. In South Carolina the campaign season of 1876 was marked by murderous outbreaks and fraud against freedmen. Red Shirts paraded with arms behind Democratic candidates; they killed blacks in the Hamburg and Ellenton SC massacres; and one historian estimated 150 blacks were killed in the weeks before the 1876 election across South Carolina. Red Shirts prevented almost all black voting in two majority-black counties.
Reconstruction continued in South Carolina, Louisiana and Florida until 1877. The end of Reconstruction marked the beginning of a period, 1877–1900, in which white legislators passed laws and new constitutions that created barriers to voter registration and voting for African-Americans
From 1890 to 1908, starting with Mississippi, ten of the eleven states of the Confederacy passed new constitutions or amendments that created new requirements for voter registration, such as poll taxes, literacy and understanding tests, grandfather clauses and residency requirements. The effect on black disfranchisement was immediate and devastating. Hundreds of thousands of African Americans were removed from voter registration rolls across the South and effectively disfranchised.
One-party rule under white Democrats was established.
Reconstruction civil rights legislation was overturned by the United States Supreme Court. Most notably, the court held in the Civil Rights Cases (1883), that the 14th Amendment gave Congress the power only to outlaw public, rather than private, discrimination. In Plessy v. Ferguson (1896), the court went further, ruling that state-mandated segregation was legal as long as the law provided for “separate but equal” facilities.
African Americans immediately started raising legal challenges to disfranchisement which lasted until deep into the 20th century.
Re-establishment of white supremacy meant that within a decade, people forgot that blacks were creating thriving middle classes in many states of the South. African Americans’ lack of representation meant they were treated as second-class citizens, with schools and services consistently underfunded in segregated societies, no representation on juries or in law enforcement, and bias in other legislation. It was not until the Civil Rights Movement and the passage of Federal legislation that African Americans regained their suffrage and civil rights in the South.
The passage of the Federal legislation or civil rights legislation not only covered African Americans, but it also covered women, religion, Latinos, Asian Americans, etc.
Fast forward to November 4, 2008, and some 44 years after the passage of the voter rights act, and the civil rights act and the death of many black and non-blacks, America elected her first African American President.
Colbert I. King posted the following article in the Washington Post. With the above historical background, true Americans may have reason to fear something awful is brewing with the Tea Party.
Take a read and decide for yourself.
A Dangerous Kind of Hate There’s an ugliness and hatred loose in the land — unleashed by the angry right.
By: Colbert I. King, Op-Ed Columinst
On Aug. 16, pastor Steven L. Anderson of Faithful Word Baptist Church in Tempe, Ariz., told his congregation that he prays for the death of President Obama. In a sermon titled “Why I Hate Barack Obama,” Anderson preached: “I’m not going to pray for his good, I’m going to pray he dies and goes to hell.”
Anderson is not the only man of the cloth to wish widowhood upon Michelle Obama. In June, the Rev. Wiley Drake of First Southern Baptist Church in Buena Park, Calif., said he was praying for the president’s death.
Anderson, however, was explicit in his wish. “I’d like him to die of natural causes. I don’t want him to be a martyr; we don’t need another holiday. I’d like to see him die, like Ted Kennedy, of brain cancer.”
I pray God will not answer their petitions. While I’m at it, I’m going to send up one for the men and women of the Secret Service who endeavor to protect the nation’s 44th president and his family.
There’s something loose in the land, an ugliness and hatred directed toward Barack Obama, the nation’s first African American president, that takes the breath away. The thread of resentment is woven through conservative commentary, right-wing radio and cable TV shows, all the way to Capitol Hill.
Look back to Obama’s speech to a joint session of Congress Wednesday night and South Carolina Republican Joe Wilson’s crude “you lie” shout. Witness the boorish behavior in the GOP seats.
They are an inspiration to Obama-haters.
It’s not just those calling on God to harm the president who cause worry; consider what comes with the territory.
The day after Anderson’s “I Hate Barack Obama” sermon, Chris Broughton, a member of Anderson’s congregation, appeared at Obama’s speech in Arizona with an AR-15 and a pistol — not to harm the president, Broughton said, but to exercise his constitutional right to have weapons.
Then there are the walking time bombs.
Richard Poplawski of Pittsburgh slept with a gun under his pillow, hated Jews, feared Obama was scheming to take away his guns, and thought Obama got good press because he was black. In April, Poplawski showed he meant business. He fatally shot three police officers and wounded a fourth when they showed up at his house in response to a 911 call. Then there’s George Sodini, who went to a Bridgeville, Pa., health club in August, opened his gym bag, pulled out a weapon and shot and killed three women and wounded nine others. Sodini had planned the shooting for the summer, but delayed because, as he wrote on his Web site, he wanted to “stick around to see the [presidential] election outcome.”
Sodini wrote of Obama: “The liberal media LOVES him. Amerika has chosen The Black Man.”
Sodini’s writings revealed his contempt for black men and for white women whom he believed were beyond his reach. He wrote that, “dem white hoez dig da bruthrs! LOL. More so than they dig the white dudes! Every daddy know when he sends his little girl to college, she be [reference to sexual act] a bruthr real good. I saw it. Black dudes have their choice of the best white hoez.”
Inflamed by sexual rejection and his hatred of black men, Sodini opened fire on those attending a fitness class filled with white women he apparently couldn’t have.
Okay, now let me have it: “King, you’re generalizing, making a big story out of small, isolated examples. People like Anderson, Broughton and Drake, and shooters Poplawski and Sodini, are kooks, representing no one but themselves. Most people who oppose Obama don’t want him dead. They wish him and his family no physical harm.” I won’t argue with that.
What I will say, however, is that a lot of malicious words have been thrown around about Obama since his election: words that inflame and that inspire the kind of hatred spewed from those two Arizona and California pulpits.
Right-wing ranters don’t regard the president as a political opponent. Barack Obama, in their minds, is the enemy. He is, to them, dangerous and harmful to the country.
Do the Andersons and Drakes have a right to say they hate Obama and want him to die? Yes. Did Poplawski and Sodini have a right to trash the “liberal” press and expound their racist views? You bet.
Still, the depth of the hostility is extraordinary.
From a right-wing talk show host who opposed allowing students to see the president’s education speech: “Make September 8 Parentally Approved Skip Day. You are your child’s moral tutor, not that shady lawyer from Chicago.” And from a parent’s e-mail to a Florida TV station’s Web site: “This is exactly how Hitler rose to power in Germany, by preaching to those most vulnerable members of society.”
Smears? Paranoia? It’s all sweet music to the ears of Lee Harvey Oswald wannabes.
If the president of the United States ever needed heartfelt prayers, it’s now.