By KENNETH OFGANG
Staff Writer

An April 11 trial date was tentatively set yesterday for the trial of a U.S. District Court action in which Judge Patrick Murphy is charged with fraud and conversion.

Senior U.S. District Judge Wm. Matthew Byrne Jr. set the date after lawyers reported being unable to complete a proposed settlement involving four of Murphy's co-defendants.

The date is contingent on the trial schedule of the attorney for one of the co-defendants. Byrne said he would give priority to the lawyer's previously scheduled trials if they go forward before the new date.

Also yesterday, in response to an inquiry from the judge about settlement prospects, Murphy's attorney, Thomas Dovidio of Diamond Bar, said he didn't know where his client was. Dovidio reportedly said during an earlier settlement conference that the judge was out of the country and was seeking disability retirement from the bench.

He has been away from the court since September due to what were said to be cardiac- and stress-related problems.

Murphy's judicial status could not be determined as of yesterday afternoon. He was a judge of the Citrus Municipal Court, to which he was first elected in 1992, but that court ceased to exist when court unification took effect Saturday.

Murphy did not appear Saturday at the mass swearing-in for former municipal court judges. Officials said judges who did not take the oath Saturday would have do to so before acting as Superior Court judges, but it could not be immediately determined whether Murphy had done so or is required to do so within a time limit.

The case--in which the securities firms of Smith Barney Inc. and Prudential Securities, Inc. have accused Murphy and others of fraud and conversion, seeking damages in excess of $785,000, including interest--was originally to be tried next Tuesday. But defense lawyers sought a continuance for various reasons, one of which was that discovery has not yet been completed.

The plaintiffs claim that Murphy helped a close friend, Dr. George Taus, conceal from the doctor's ex-wife, Susan Taus, a portion of the funds to which she was entitled as a result of a marital settlement agreement.

The firms are suing because a National Association of Securities Dealers arbitration panel held them responsible for having paid the funds over to the doctor and required them to reimburse Susan Taus.

Also pending, based on similar allegations and involving the same defendants plus others, is a suit by Taus' bankruptcy trustee. He is seeking to recover funds on behalf of Susan Taus, who has filed a claim that she is still owed more than $300,000 by her ex-husband, and on behalf of the doctor's brother and mother, who also claim he owes them money.

The two suits have been combined for purposes of discovery only.

Attorneys explained in court yesterday that four defendants through whose hands portions of Taus' money allegedly passed--Encino lawyer Paul Ottosi, Irwindale paralegal Maryanne Baumgarten, Baumgarten's sister Winnie Eisen, and Taus friend Arnold Secord--were prepared to pay a total of $105,000 to be dismissed from the two suits.

Ottosi, who offered to put up $75,000 of the settlement, did so only to avoid defense costs and continues to deny any culpability, his attorney, Gerry DeSimone, reiterated yesterday.

But the attorneys reported that after considerable discussion, the settlement had been rejected by the bankruptcy trustee. Trustee's counsel Richard Burstein of Danning, Gill, Diamond & Kollitz said the proposed deal was unfair to the creditors.

Byrne was visibly agitated at the news that the case wouldn't at least partially settle.

"We can't get settlements, we can't get anything, all we can get is lawyer's fees," the judge scolded the assembled attorneys. Byrne estimated that fees in the case are already over $1 million, well in excess of the claim.

Several settlement proposals have been openly discussed in the case in recent weeks.

One plan--under which Murphy and his sister, Barbara Parsons, would have contributed to a global settlement--fell through, attorneys said, because of Murphy's insistence that the United States Attorney's Office promise not to prosecute him in connection with the allegations made by the securities firms and the trustee.

It was previously disclosed in court papers that one of the co-defendants, Secord, testified before a federal grand jury in December.

Parsons is not currently a party to either suit. But the trustee has moved to add her to his action, and Burstein claimed in court yesterday that she had possession of more than $300,000 of Taus' money at one time.

Another settlement proposal, Taus attorney Richard Seone told the MetNews, would not have included Murphy or Parsons but would have included his client, who would have contributed the bulk of a $400,000 total. The plaintiffs "dealt with us in bad faith," he said, upping their demand to $550,000 at the last minute.

Plaintiffs' counsel David Bartholomew of Keesal, Young & Logan declined comment.