Man Who Escaped From Prison Indicted in Mail, Bankruptcy Fraud

An Orange County businessman who is still at large after escaping from prison last month has been indicted in U.S. District Court in San Diego on 28 counts of mail and bankruptcy fraud.

Ronald L. Rushton, 45, allegedly acquired title to 500 residential properties in Southern California and elsewhere by falsely promising owners that their delinquent mortgages would be assumed, Assistant U.S. Atty. Stephen P. Clark said Thursday.

Rushton, who did business at a La Jolla address as Tierrasanta Development, would then collect rent on the properties but make no payments on the mortgages, Clark said. Rushton transferred title of several properties to a bankrupt corporation, obtaining an automatic stay from foreclosure and extending the time he could collect rent checks.

The indictments allege that Rushton placed the companies in bankruptcy merely to maximize the illegal skimming of rent checks. Rushton used six different corporations for his illegal scheme, Clark said, but his principal base apparently was Western Consolidated Capital in Laguna Hills.

The plan often generated monthly rental income of $100,000 over a period between 1983 and 1985, Clark said. Rushton allegedly drummed up business with newspaper advertising directed at financially troubled homeowners.

Rushton was convicted of two counts of mail fraud by a U.S. court in Reno last April in an unrelated case and sentenced to prison. He escaped from a federal prison camp at Boron, Calif., on Nov. 10 and is still at large.