Ameriquest - Town & Country - Ameriquest Capital Corporation ripoff Article from Today's LA Times Business Section ."Activists demonstration outside of AMC headquarters" Ex-Wife finance investigation Orange California

Ex-Wife of Loan Exec Asks for Probe
She files for a look at Ameriquest founder's finances in hopes of a bigger settlement.

By E. Scott Reckard, Times Staff Writer

Ameriquest Mortgage Co. founder Roland E. Arnall has plenty of distractions these days an investigation of his company by authorities in 30 states, protesters at Ameriquest headquarters in Orange and an expected U.S. Senate confirmation hearing on his nomination to be ambassador to the Netherlands.

Now add this to his worry list: a court filing by his ex-wife, who claims the billionaire businessman concealed his true wealth when their 37-year marriage broke up and pressured her into accepting an inadequate settlement

In court papers, Sally Arnall is asking a Los Angeles County Superior Court judge to approve a broad investigation of her ex-husband's finances in hopes of winning a higher divorce settlement.

Judge Richard E. Denner on Wednesday is scheduled to consider a request by Roland Arnall's attorney to limit the scope of the investigation on the basis that it would violate his client's right to confidentiality.

The ambassadorial nominee declined to discuss the case, saying in a statement that it was a "personal and private family matter."

Details of the mediated settlement with his ex-wife weren't disclosed in the original records of their 1998 divorce, which gathered dust in the Los Angeles County archives until June, when Sally Arnall moved to reopen proceedings.

According to responses newly filed by Roland Arnall, she received $11 million and homes in Hancock Park and Palm Springs in the split-up.

He received two other houses along with Ameriquest Capital Corp., his company, and its subsidiaries. That included Ameriquest Mortgage, which since has become the nation's biggest lender in the "sub-prime" market for borrowers with credit problems or other issues that prevent them from getting lower-cost prime loans.

Sally Arnall also was indemnified from liability in the home lender's $4-million settlement in 1996 of a U.S. Justice Department lawsuit accusing the private company of financial bias against women, minorities and the elderly.

The company which at the time was community property under California law disputed the government's statistics and admitted no wrongdoing in settling the case while the Arnalls' divorce mediation was underway.

In her new declaration, Sally Arnall acknowledged that she still had the two residences and most of the money she received.

"However," her declaration continued, "I believe I was misled and that I received substantially less than my share of the financial empire we amassed during our marriage."

Her attorney, Vicki Greene of Century City, contended that Roland Arnall failed to make a series of required legal disclosures, including detailing the scope and expansion plans of his business empire.

Arnall's disclosure filing, including an "essentially blank" income and expense statement, "was completely inadequate and did not comply with California statutory requirements," Greene said.

Arnall's attorney, Leonard J. Meyberg Jr. of Century City, declined to comment. Citing confidentiality protections resulting from mediation, Meyberg has asked Denner to limit the investigation to the issue of whether any community assets existing when the couple separated in March 1996 were not divided by the time their divorce settlement was finalized April 15, 1998.

Meyberg also argues that because of confidentially protections, Denner should strike from the record much of the declarations from Sally Arnall, Greene, and Scott Mowrey, an accounting consultant to Sally Arnall.

"I was not provided with important financial information that I needed," Mowrey said in a statement filed with the court. He said Roland Arnall had provided no documents showing his income from the time of the separation and no access to his business and personal ledgers.

In her account to the court, Sally Arnall said she had no idea of the extent of Arnall's business operations until she saw the November 2004 issue of Forbes magazine, which estimated her former husband's net worth at $2 billion.

"I could not believe it," she said. "I had no idea he was this wealthy."

Her exhibits included a June 25 article in The Times, shortly after she filed to reopen her divorce case, reporting that Arnall was under consideration to become ambassador to the Netherlands. The article noted that Ameriquest and its subsidiaries gave $1 million to Bush's second inauguration and that Ameriquest had agreed to pay as much as $50 million to settle a class-action suit accusing it of using "bait and switch" tactics in California and three other states.

Another exhibit was a July 29 article in The Times reporting that Ameriquest had set aside $325 million to help resolve a 30-state investigation into complaints of hidden fees, overcharges, inflated appraisals and fabricated borrower income statements.

Activists staged a demonstration outside Ameriquest headquarters last week to protest its lending practices, but the company maintains that it adheres to the highest standards in the industry to protect customers. It has not admitted legal liability in its settlements to date, describing them instead as means to avoid costly litigation.

In her statement, Sally Arnall said her former husband considered the businesses "his as opposed to ours," and told her "as little as was necessary" about them.

She said her lawyer during most of the mediation resigned in March 1998 before the process was complete. She said she did not have an attorney during the final stages of the mediation and contends she didn't understand the ramifications of proceeding on her own.

Arnall initially had urged her to settle for $1 million without mediation, Sally Arnall said.

"He told me that I did not need as high a lifestyle as him and that this sum would be more than enough for my support," she said.

In the end, she contended, Arnall "wore me down," and her legal and accounting experts "were not able to help me" because he provided so little financial information.

"No one, especially me, knew enough about [his] earnings and acquisitions and time was running out," she said. "I was afraid and felt alone. I felt [he was] too powerful to deal with and was afraid I would be left penniless if I did not take the amount of money" he agreed to pay.

Former
Los Angeles, California
U.S.A.

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