Danville Express

Newsfront - July 6, 2007

Houston investments trial set for Sept. 25

Plaintiffs claim father and son defrauded them of their savings

by Jordan M. Doronila

State Assemblyman Guy Houston (R, District 15) is headed to trial in September for allegedly defrauding seniors in an investment scheme.

A judge said the trial was set for Sept. 14, at a public hearing in Oakland on Thursday, June 28, but it now has been changed to Sept. 25.

Plaintiffs Gerald Stefanski of Dublin, Samuel and Joann Story of Concord, and Carol Tomasa filed a civil lawsuit in 2004 against Houston and his father Fred Houston. They claimed they were encouraged by the Houstons to invest thousands of dollars from their retirement funds; however, they never saw profits or their original investments.

Stefanski said he has lost more than $300,000.

"I think we will put on a strong case on trial," said Morgan King, the plaintiffs' lawyer.

Houston's lawyer, Michael W. Rupprecht, argued on grounds that the plaintiffs had no evidence to support their claim, King said. However, King submitted a 1,200-page response in return that demonstrated substantial evidence of his clients' lawsuit, he said.

"I'm pleased we prevailed in the motions," King said.

Houston has denied many of their claims, and he said he has never had any conversations or solicited and received money from Tomasa. Rupprecht did not return phone calls from the Danville Weekly as of press time.

Houston, a former mayor of Dublin, was elected in 2002 to represent the 15th district, which covers Danville, Alamo, Livermore, San Ramon, Walnut Creek, Brentwood, Discovery Bay and part of Pleasanton.

The civil lawsuit claimed the plaintiffs had invested money with Winning Action Investments, which was operated by the Houston family and contained other businesses called the Investment Partnership and the Houston Napa Development.

As a result, they said they have lost their money due to fraud and negligent representation, according to court documents.

The Houstons are being accused of diverting funds and other assets of the Investment Partnership to other than partnership uses; and diverting assets from the Investment Partnerships to themselves and to other business entities to the detriment of their creditors, including the plaintiffs, legal documents said.

King said there have been opportunities for Houston to settle but Houston decided not to do so.

"Naturally, the plaintiffs would rather settle than go to trial. My clients have their right to their day in court," said King. "Mr. Houston has his right to his day in court."

The trial will be held at the Alameda County Superior Court, 600 Washington St. in Oakland.

Contact Jordan M. Doronila at jdoronila@DanvilleWeekly.com

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