The Master Bilkers

How a Valley development scheme ripped off investors, contractors and homeowners while bank, building and bar officials watched

The Winskis' loan application contained a few other stretchers: Brian said his salary was $94,000 at the time, and Amy said hers was $71,000. The couple's actual incomes were $47,000 and $19,000, respectively, according to the FBI.

The Winskis also claimed they had more than $155,000 in antiques, while witnesses reported that their home was almost barren.

And finally, the couple told the lender they owned more than $180,000 in gold coins and jewelry. Investigators said they couldn't disprove this, but added that "fraudulent loan applications often reflect large dollar values for noncash items like furs, jewelry and coins."

Brian was charged--Amy wasn't--and he pleaded guilty to the fraud. As sentencing neared, his court file grew thick with letters from former and current law partners, pleading for leniency and vouching for their colleague's character. The head of a local charity golf tournament benefiting children with cancer even took up for Winski, calling the 31-year-old attorney a tribute to the spirit of volunteerism.

Finally, on December 15, 1994, Winski wrote to Judge Ronald S. Reinstein on his own behalf:

"Please be assured that while this entire matter will never be forgotten, the events which led up to it will never be repeated. Once again, thank you for all you have done and your faith in me as an individual."

Reinstein sentenced Winski to two years' probation. Most important, though, Winski's defense attorney convinced Reinstein to reserve the right to downgrade the young barrister's felony to a misdemeanor if he completed probation without a hitch.

That defense attorney was A. Melvin McDonald--the former U.S. attorney who had sent Orians to prison 14 years earlier and who, ironically, would soon find himself defending Brian Winski again--for the alleged swindle of investors at Los Portones and other Orians' developments.

By convincing Reinstein to leave Winski's felony offense undesignated, McDonald all but ensured that the bar would not take action against his client.

"A misdemeanor conviction under our rules does not mean that we go to the next step of imposing discipline on the attorney," explains bar attorney Alan Shayo. "We would need a felony for that."

Just as the bar was aware of Brian Winski's lapses, the state Banking Board knew that Amy Winski, Cambria's president at the time, had been named as an unindicted co-conspirator in the home-loan fraud case.

Banking Department investigators also had reported that, on a previous loan application to another lender, Amy Winski had submitted a series of forged checks from Cambria in an attempt to convince the loan officer that the family company was paying off personal debts for Amy and Brian.

Indeed, the Banking Department's files are replete with scores of other gripes against Cambria, ranging from the imposition of arbitrary fees to the failure to file its licensing paperwork on time.

Yet the department never moved against the company's license.
Neither Richard C. Houseworth, the state Banking Department's superintendent, nor John Coyle, division manager for the Banking Department, returned calls seeking an explanation.

It's not entirely clear how the Winskis met Orians. Investigators' reports quote Brian Winski as saying his brother C.J. may have known Orians for years, while C.J. Winski has said it was his father who had first dealt with Orians.

Whatever the case, by early 1994, Cambria had begun soliciting lenders to finance construction at four Orians subdivisions across the Valley, including Los Portones. Such deals were not unique in the home-mortgage industry, and they were nothing new to Cambria, which, at the time, was handling about $32 million in residential and commercial mortgages annually.

According to prosecutors, the deals were supposed to have worked like this: Lenders--usually individual investors--would write checks to Cambria for between $80,000 and $110,000, depending on the type of home they were financing. About a third of that money would be used to buy the lot on which the home would stand; the rest would go into a "construction impound account" used to fund the home's construction.

As the developer--Orians--built the home, he would submit an invoice of completed work to Cambria and attest that he had paid off the workers. Carl Winski would then inspect the homes to ensure that the work had been done. Once satisfied, the elder Winski would write a letter to the law firm overseeing the account and authorize it to release the funds to the developer.

Typically, funds would be released in seven "draws," each one representing a separate stage of construction. For instance, once the foundation had been poured, the developer would request the first draw. Once the walls were framed, he would request the second, and so on until the account was empty.

The lenders would get their money back once the completed home was sold, plus about a 15.5 percent profit on what had been a nine-month loan.

"It looked like a safe deal," says Bill Flanigan, who heard about Cambria through a solicitation he got in the mail. Furthermore, Flanigan adds, the contracts he signed specified that his money would be watched over by the law firm of Brandes, Lane and Joffe.

What investors weren't told, he says, was that the lawyer handling their account for Brandes, Lane and Joffe was Brian Winski. Likewise, Gregory Orians' name never appeared in any of the contracts.

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