By KENNETH OFGANG
Staff Writer

Three lawsuits involving Los Angeles Superior Court Judge Patrick B. Murphy, including one in which the judge was accused of fraud and money laundering, have been settled, lawyers said yesterday.

Prudential Securities Inc. and Smith Barney Inc. will receive $450,000 to settle their 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 sued Taus, Murphy, and six other people who apparently received portions of the money after a National Association of Securities Dealers arbitration panel held them responsible for paying the funds over to the doctor and required them to reimburse Susan Taus.

Another $75,000 will be paid, the attorneys said, to the trustee of George Taus' bankruptcy estate, who sued the same defendants and others for the return of nearly $1.9 million that the trustee claims was wrongfully taken from the estate, including funds which allegedly ended up in the possession of Murphy and other defendants.

Settlement Money

Taus' attorney, Richard Seone, said his client was paying $259,000, plus loaning $12,000 to attorney Stephen J. Alexander to cover part of his contribution. Murphy's sister, Barbara Parsons, is to pay $145,000, with $60,000 coming from Encino attorney Paul Ottosi.

Smaller sums, varying between $2,000 and $20,000 each, are to be paid by Alexander, former mayor of Azusa; businessman Arnold Secord; Irwindale paralegal Maryanne Baumgarten; Baumgarten's sister, Winnie Eisen; Orange County resident Essam Seif; and Colby Cota, a nurse and longtime friend of Murphy.

The settlement agreement provides that Murphy is to pay nothing. One attorney, however, said on condition of anonimity that he believes $90,000 of Parson's contribution is actually coming from Murphy.

Lawyers for Murphy and Parsons disputed that assertion.

"Judge Murphy is putting in no funds at all," attorney Gary Laff told the MetNews. Laff represents Parsons, who was not named in the Smith Barney suit, in the trustee's suit.

Legal Fees

Laff said Parsons was willing to pay the money rather than remain embroiled in the case, which Senior U.S. District Judge Wm. Matthew Byrne Jr.--who would have presided over the trial--estimated to have spawned over $1 million in legal fees. Parsons admitted no liability and felt "vindicated" by the settlement, Laff said.

Laff also represents Murphy in a suit, which is being dismissed as part of the global settlement, in which the judge accused Ottosi and attorney Paul Jacobs of Newport Beach of invasion of privacy.

Richard Moss, a Pasadena lawyer who represents Murphy in the Smith Barney suit, also said that the judge was not contributing to the settlement.

According to a pretrial stipulation filed with the court on behalf of the parties in the Smith Barney case, Taus cashed out the brokerage accounts, then moved the money from a Bank of America account here to one in Nevada under the control of Secord, a friend of his.

The money, it was stipulated, was invested in a startup company run by Secord called Copex. The funds were then transferred to Ottosi, and disbursed by him to Baumgarten under the guise of a settlement of a sexual harassment claim by Baumgarten against Secord and Copex.

It was further stipulated that funds were transferred by Baumgarten to various other persons, including Alexander, Eisen, and Seif.

Ottosi, a co-defendant in the Smith Barney and trustee's suits, is a former friend of the judge who claims he received money from the judge, which Murphy said was his, and distributed it on Murphy's instructions. Murphy denied having said anything of the sort, and claimed that when he learned Ottosi had the money, he told him to give it back to Taus.

Ottosi's lawyer, Gerry DeSimone of Agoura Hills, reiterated yesterday that his client had no culpability, but was prepared to participate in the settlement because the costs of trying the case would have been double the contribution.

In the invasion-of-privacy suit, Murphy claimed that Ottosi illegally recorded conversations between them and that Ottosi and Jacobs--who has known Murphy for years and represented him in litigation relating to the 1996 campaign in which Judge Karl Jaeger defeated Murphy for a Superior Court seat--disseminated the contents.

The dissemination of the recordings, Murphy alleged in his complaint, was a substantial factor in the cardiac and stress-related health problems that have kept him off the bench for most of the past three years and helped trigger an investigation by the Commission on Judicial Performance.

The CJP hasn't charged Murphy with wrongdoing as a result of the financial transactions, but has accused him of dereliction of duties based on his missing over 500 workdays in the past four years.

The offices of the district attorney and U.S. attorney have also investigated Murphy's alleged activities in connection with the Taus money, but no results have been announced.