Companies Bilked of $680,000 : Man in Credit Scam Gets 6-Year Term

A Van Nuys man who bilked scores of companies out of more than $680,000 through phony credit orders was sentenced Wednesday to six years in federal prison.

Thomas Leonard Balla, who pleaded guilty to five counts of mail fraud Jan. 9, was sentenced by U.S. District Judge A. Wallace Tashima. The federal probation department had recommended a five-year sentence, but Tashima said he added 12 months because of Balla’s involvement in a highly publicized vice trial in London. Balla could have received five years for each count.

In the London case, Balla, 24, was accused of running a sophisticated call-girl ring that employed more than 200 prostitutes in the ritzy Mayfair district. Balla was arrested in London on Sept. 28, 1987.

British authorities dropped the charges against Balla and four other defendants June 8 amid allegations, extensively reported in the tabloid press there, that one of the ring’s prostitutes was romantically involved with a veteran Scotland Yard detective. British prosecutors apparently believed that the publicity had compromised their case, Assistant U.S. Atty. David Katz said.

During Wednesday’s hearing, Katz cited declarations by women who had said Balla had hired them as prostitutes in England. The declarations were provided by British prosecutors. Tashima said they show that Balla’s British escort service, Brookwise Ltd., was really a front for prostitution.

‘Bust-Out’ Scheme

The U.S. charges against Balla stem from his involvement in a “bust-out” scheme that he operated in Oxnard and Canoga Park, Katz said. Balla used the good credit rating of Knolls Vacuum & Sewing, a Long Beach store he purchased in 1984, to order more than $1 million in food, clothing, exercise equipment and electronic goods, he said.

Balla set up a phony storefront in Oxnard to receive the merchandise, later resold through two warehouses in Canoga Park, Katz said. Balla was indicted in the scheme June 4, 1986, but prosecutors believe that he was already in England by then.

He was extradited from London to Los Angeles on Nov. 22, 1988.

In an agreement with prosecutors, Balla admitted defrauding five companies. But Katz said authorities believe that 209 companies across the country lost $686,786 in the scheme. Another 61 companies lost unknown amounts, he said.

Tashima ordered Balla to make restitution to the victims, but Katz said Balla has no money. “Unless Balla wins the Big Spin, how’s he going to pay it?” he asked.