DanvilleSanRamon.com

Newsfront - August 24, 2007

Houston settles lawsuit

Suit claims scheme defrauded seniors

by Jordan M. Doronila

State Assemblyman Guy Houston (R, District 15) has settled a lawsuit that alleged he defrauded seniors in an investment scheme.

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 said they saw little profit and lost thousands of dollars.

The lawsuit went to mediation in early August and was resolved, although terms of the settlement were not disclosed.

"The plaintiffs are happy with the settlement," said Morgan King, the attorney representing the plaintiffs. "Our clients are quite happy with the settlement."

Houston has denied many of the claims, and has said he never had any conversations or solicited and received money from Tomasa. His lawyer, Michael W. Rupprecht, declined to comment.

Houston, a former mayor of Dublin, has declared his intention to run for Contra Costa County Supervisor for District 3, a position currently held by Mary N. Piepho. He was elected in 2002 to the State Assembly to represent the 15th District, which covers Danville, Alamo, Livermore, San Ramon, Walnut Creek, Brentwood, Discovery Bay and part of Pleasanton but term limits prevent him from running for another term.

The civil lawsuit claimed the plaintiffs had invested money with Winning Action Investments, which was operated by the Houston family and encompassed other businesses called the Investment Partnership and the Houston Napa Development. They said they have lost their money due to fraud and negligent representation, according to court documents.

The Houstons were accused of diverting funds and other assets of the Investment Partnership to non-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 he invited Houston to settle a year ago but received no response.

"I tried to keep it out of the press," the attorney said.

He noted it is important for seniors to be wary of how they invest their money.

"The problem with older people is that they tend to trust people who they meet in the community," he said.

Contact Jordan M. Doronila at jdoronila@DanvilleWeekly.com

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