Drug Dealer Testifies That He Believes Paduano Orchestrated Armed Robbery

A small-time cocaine dealer testified Thursday he learned that a robbery of his Balboa Island home a year ago was orchestrated by Robert (Fat Bobby) Paduano and that Paduano spread the word he was taking over the drug traffic in Newport Beach.

The drug dealer said he got that information from Diedre O’Shea, a former girlfriend of Paduano’s and a key witness against him. Paduano, a 44-year-old lending firm owner reputed to have underworld connections, was indicted by the Orange County Grand Jury last month on 73 counts of robbery, burglary, assault and extortion in a major drug investigation.

Prosecutors allege in the indictment that the robberies, which occurred in Newport Beach, Fountain Valley and the Palm Springs area in 1986 and 1987, were part of a plan by Paduano to shake down suspected drug dealers.

The opening testimony at Paduano’s preliminary hearing in West Municipal Court in Westminster on Thursday came from three people who claim that they were victims of either robbery or extortion by gunmen. Prosecutors say they will eventually tie Paduano to the crimes.

Paduano’s 20-year-old son, Anthony, and 18-year-old daughter, Dina, said outside the courtroom that the prosecution theory is “ridiculous” and that Paduano is being set up by Diedre O’Shea and others.

“She’s been out to get my father for years,” Anthony Paduano said. “They just keep bringing her back.”

O’Shea was a witness against Paduano two years ago when he was charged in federal court in Los Angeles with defrauding stockholders of a Montana firm through illegal stock transfers. But he was acquitted of those charges. He was also arrested in 1981 on loan sharking charges in Orange County but was never convicted.

Paduano does have an earlier arson conviction from 1973 and a 1977 drug-related conviction.

Prosecutors told Judge Alan N. McKone on Thursday that O’Shea may end up an unindicted co-conspirator in the Paduano case. She testified against Paduano before the grand jury.

At Thursday’s hearing, McKone heard testimony from Eric Mendel, an admitted cocaine dealer from Balboa Island, and his girlfriend, Yvonne Nassi, a former employee of the Mustang topless bar in Santa Ana. They described in detail a Jan. 19, 1987, robbery at Mendel’s home.

Two gunmen, identified by both later as Johnny Matua, 22, of Westminster, and Rodney Tia, 18, of Anaheim, told them and another couple in the house that they were from the Mafia and were taking over drugs in Newport Beach.

Mendel and a male friend were handcuffed. Nassi said the gunmen ordered her to put on handcuffs, but she refused. The two couples were ordered to keep their heads down while the two gunmen ransacked the house, looking for money, jewelry and drugs. (Both alleged gunmen are now in prison on other robbery convictions.)

Nassi testified that one of the gunmen, identified as Tia, quickly moved toward her when she raised her head once. “He put the gun right next to my head and said, ‘If you look up again, I’ll blow your goddamned head off.’ ”

Mendel said he was too scared later to call the police but called a friend of his, Jimmy Milsap, in hopes that he might be able to tell him who the robbers were. Mendel said Milsap put him in touch with O’Shea.

Mendel testified that O’Shea told him in detail the kind of jewelry stolen during the robbery, which convinced him that she knew something about it.

Mendel said O’Shea told him she was representing Paduano.

“She said that Paduano had my stuff and that I could get it back if I would give them (an acquaintance’s) address,” Mendel said.

Deputy Dist. Atty. Wallace J. Wade said after the hearing that he cannot discuss future witnesses. But asked about the O’Shea allegation that Paduano used the robberies as a way to expand his drug territory, Wade answered, “That’s the way the evidence appears to be developing.”

But Paduano’s attorney, Alan May, scoffed at that theory.

O’Shea and Paduano broke up about three years ago--before her 1986 testimony.

“Why would she be associated with Mr. Paduano in 1987--after she has already testified against him?” May said. “That doesn’t make sense.”

May also said prosecutors have been inconsistent in their portrayals of Paduano.

“If he is really this big-time Mafia figure like the prosecutors say, then why would he be pulling penny-ante robberies of small-time drug dealers?” May said.

Paduano’s preliminary hearing is scheduled to continue Monday and is expected to last two weeks.