By KENNETH OFGANG
Staff Writer

Citrus Municipal Court Judge Patrick B. Murphy has accused an Encino lawyer and an Irwindale paralegal of scheming to defraud a friend of his, and has insisted he has been falsely implicated in the affair.

Murphy has not returned repeated calls to his chambers or a call to his home since the MetNews learned that a complicated series of financial transactions, in which the judge was allegedly involved, is being investigated by the Los Angeles District Attorney's Office and other agencies. The transactions are also the subject of two pending suits in U.S. District Court in Los Angeles.

However, the transcript of a deposition taken March 30, provided by a confidential source, shows that the judge has denied the various allegations that have been levelled at him.

According to statements made in court papers and in interviews, Murphy took an active role in jockeying nearly $1.9 million in funds belonging to the estate of his friend, Dr. George Taus, who was in bankruptcy. Taus has been accused of concealing funds to keep them from his ex-wife.

Portraying Taus as the victim of manipulations and himself as an after-the-fact observer, Murphy testified that upon learning of the multiple transfers of Taus' funds, he advised his friend that he appeared to have been "scammed" by Encino attorney Paul Ottosi and Irwindale paralegal Maryanne Baumgarten.

Murphy's deposition was taken by an attorney for Smith Barney, Inc. and Prudential Securities, Inc. The firms are suing to recover more than $780,000 which a National Association of Securities Dealers arbitration panel required them to pay to Susan Taus, George Taus' ex-wife.

The arbitrators ruled that the firms should not have allowed Taus to liquidate Individual Retirement Accounts that were community property.

Defendants Added

At the time Murphy was deposed, Taus was the sole defendant in that suit, and Murphy was not represented by counsel. Since then, Murphy, Ottosi, Baumgarten, attorney and former Azusa Mayor Steven Alexander and others have been named as additional defendants, and Murphy has retained Diamond Bar sole practitioner Thomas Dovidio to represent him.

The same defendants, and others—including Covina lawyer Eugene Cristiano—are also being sued by the trustee in Taus' bankruptcy in connection with the dissipation, loss, or concealment of the funds.

Ottosi, who said he is cooperating with investigators, has insisted that he agreed to receive the money at the behest of Murphy. Murphy told him, prior to the funds being sent by wire transfer, that the money belonged to Murphy and his wife and that Ottosi was to serve as a neutral custodian pending divorce proceedings, Ottosi has recited.

The lawyer has contended he later gave the money, on Murphy's instructions, to Baumgarten, a friend of the judge who once worked for Murphy while he was in law practice. Various parties have asserted, in court records and interviews, that Baumgarten transferred the money to Alexander and others.

Harassment Settlement

Ottosi has explained that after he received the money, he was told by Murphy to pay it to Baumgarten under the guise of a settlement of a sexual harassment claim against Copex, Inc.—a startup company in which Taus invested the $1.9 million, and which had virtually no other funds, according to bank records.

In his deposition, Murphy painted an entirely different picture.

Murphy testified that his first knowledge of the Copex investment came after the money was transferred. Although he and Taus spoke once or twice a week, the judge said, his friend had been too embarrassed to explain how he had lost his entire savings in a questionable investment.

Murphy said Taus told him the money had been spent to settle a sexual harassment claim that a woman named Maryanne Bender had made against Arnold Secord, a friend of Taus and the sole officer of Copex. Taus, Murphy testified, said he had later learned that Bender and Baumgarten were the same person.

"I told [Taus] if it were me, I would sue and I would contact the police immediately," the judge testified. He said he told Taus that parties to be sued were Ottosi, "who ended up with [Taus'] money," Baumgarten, and possibly Secord.

He told Taus to consider suing Secord, Murphy said, because "there was a very real possibility that he was colluding with the other two."

The judge acknowledged having received a quantity of gold from Alexander, but said he merely acted as a go-between for Baumgarten, on whose behalf Alexander had purchased it. A document obtained last month by the MetNews from a confidential source recites that Murphy received more than $85,000 worth of gold from Alexander.

Murphy said he never saw the gold, but was merely told what it was. He said he had no idea how much gold there was, and delivered the still-sealed package to Baumgarten, who refused to tell him what the nature of her business with Alexander was.

Murphy denied having assisted Baumgarten in attempting to "launder"—as Smith Barney counsel Jill Olofson put it—the Taus funds through Las Vegas casinos.

He acknowledged having traveled to Las Vegas with Baumgarten on multiple occasions, but said he had "no recollection" of whether he took a trip in late January or early February 1997, which would be right after Baumgarten is said to have received the money from Ottosi.

He added that he had no recollection of whether Baumgarten tried to cash cashier's checks on one of those trips and that he had "no specific recollection" of accompanying her to any casino cage.

He acknowledged traveling "back and forth" between two casino hotels with Baumgarten, but said he didn't "know what all her business was" and thought that she was engaged in some private business that had nothing to do with him.

This is at odds with the version which Baumgarten's former attorney, Paul Jacobs, and Otossi say that Baumgarten related. In that account, the lawyers have said, Baumgarten and Murphy attempted, unsuccessfully, to cash the checks given to Baumgarten by Otossi.

Jacobs said his client reported that after cashing a check at one casino, they were rebuffed in a similar effort at another casino. Ottosi said the check that was cashed was in the amount of $100,000.

Ottosi explained that casinos in Las Vegas are now linked by a computer network over which they exchange information, accounting for the turn-down at the second casino.

Murphy testified that he telephoned Ottosi and told him "he's got to give the money back" to Taus. Ottosi's response, the judge said, was to tell "many stories"—at first claiming that the sexual harassment claim was legitimate, then that Taus had made a "safe and sound" investment and that his money had been returned, then implicating Murphy.

Murphy also denied any role in the preparation of the Copex/Baumgarten settlement agreement, but said it has been shown to him by Ottosi, Baumgarten, and possibly Taus.

Ottosi said he has turned the original of that agreement over to investigators for fingerprint analysis.

Murphy was not asked in the deposition whether he was shown the original or only copies.

Murphy Trip Disclosure Reflects Links to Scientology

By a MetNews Staff Writer

Testimony by Judge Patrick Murphy in a deposition March 30 reflected the jurist's links with the Church of Scientology—which some view as a factor in Murphy losing a 1996 contest for a seat on the Los Angeles Superior Court.

Responding to questions by Smith Barney, Inc. lawyer Jill Olofson about trips he took in the last three years, Murphy disclosed he had gone to England and Germany in 1997 to give speeches under the auspices of Criminon, an offender rehabilitation program linked to the church.

The church has been involved in a number of controversies. While supporters praise its impact on their lives, often crediting it with helping them recover from emotional and substance abuse problems, others—including a former Scientologist who won a $2.5 million judgment against the church—have accused it of brainwashing its adherents and harassing former members who have left the church.

The Los Angeles Times reported on Nov. 1, 1996—just days before Murphy lost a runoff contest to then-Los Angeles Municipal Court Judge Karl Jaeger—that Murphy had placed some probationers in the Criminon program. A spokesperson described the purpose of the program as instilling a feeling of self-worth in lawbreakers and persuading them to accept a moral code.

The disclosure of the Scientology connection "had a little something to do" with the election outcome, campaign consultant Joseph Cerrell said at the time. Cerrell, who advised Jaeger in the race, is the dean of judicial campaign strategists, having represented scores of judges in uncontested and contested races since 1978.

Murphy had finished first in the primary, in which Los Angeles Municipal Court Judge Stephen Marcus ran third and was eliminated, and was widely expected to win the general election.

In the deposition, Murphy said he was accompanied on the trip by six or seven persons, only three of whose names he could recall. The three were Tammy Terrenzi, executive director of Criminon; Rena Weinberg, president of a Scientology—affiliated organization and a winner of the IAS Freedom Award, one of the church's highest honors; and David Pomerantz, a singer/songwriter who is prominent in the church.

The judge was not asked who paid for the trip. Code of Civil Procedure Sec. 170.9, which limits most gifts to judges to $250 per year from a single source, contains an exception allowing payment of a judge's international travel expenses by a governmental or a tax-exempt nonprofit religious, charitable, or educational organization.

Murphy has been described by Freedom, a church publication, as "the first judge in the nation to initiate the use of the Criminon program in lieu of, or in addition to, incarcerating misdemeanor offenders."

Freedom's German edition quoted Murphy as saying:

"Through the technologies of [church founder] L. Ron Hubbard, I now have the ability to effect significant changes among lawbreakers and make it possible for them to lead honest, productive lives—a result of their participation in the 'Way to Happiness' program—a program built on Hubbard's code of non-religious moral principles."