Invest America Founder Pleads InnocentAP , Associated Press
Jan. 3, 1992 6:38 PM ET
SAN FRANCISCO (AP) _ The founder of Invest America Inc. pleaded innocent Friday to charges of mail fraud and criminal contempt stemming from the bankrupt financial-planning chain.
Bernhard Dohrmann, a former Mill Valley business executive, was released on a $50,000 personal recognizance bond and ordered to appear next Thursday before U.S. District Judge John Vukasin.
Invest America was supposed to provide nationwide advertising, training, insurance and other support services for independent financial planners. It was sold to U.S. Capital Corp. of Chicago in June 1988 and went into bankruptcy the same year.
Dohrmann ''denies making any intentionally false representations, and denies violating any order of the court,'' his attorney, Lawrence Callaghan, said in a statement.
''These are stale allegations by disgruntled former officers,'' said Callaghan's statement. ''We are in the process of reviewing documents and fully expect a not guilty verdict.''
Callaghan said a ''point-by-point'' rebuttal of the accusations will have to await a review of company files in 20 boxes he said were in the government's possession.
Dohrmann faces a maximum penalty of five years in jail and $250,000 on each mail-fraud count, according to Robert Dondero, an assistant U.S. attorney. He said the penalty for criminal contempt is up to the judge's discretion.
Dohrmann, 43, was indicted by a federal grand jury in December after a three-year investigation by the FBI, the Securities and Exchange Commission and the U.S. Attorney's office.
He faces 10 counts of mail fraud in connection with Invest America's promotion of Liberty Pacific Telephone, based in Fresno. The indictment alleges that Invest America made false representations about investments in pay telephones.
The criminal-contempt allegation stems from Invest America's bond offering which sought to raise $3 million. Investors lost about $2.5 million, according to the indictment.
The offering allegedly included misrepresentations that violated a permanent injunction issued in 1987. The injunction settled SEC charges of securities fraud in connection with Invest America's promotion of solar- heating investments.
Dohrmann was convicted in 1975 of securities fraud for his role as president of U.S. Tank Car Corp. of Seattle, which sold nonexistent railcars to investors. He served five months in the federal prison at Lompoc.
He and three other officers of International Diamond Corp. of San Rafael later were charged by the Federal Trade Commission with making false claims and guarantees about diamond investments.
International Diamond went bankrupt in 1982. Without admitting guilt, the defendants settled the suit and customers received $6.7 million in refunds.