Two of the most notorious figures from the 1980s saving-and-loan scandal — a husband and wife who are the former operators of a mortgage company — are once again facing legal problems.
William R. Runnells Jr. and his wife, Marika Williams, have been ordered by a federal judge in Virginia to liquidate their assets and pay off $1 million in restitution still owed to the government. And William Runnells has been jailed for an alleged parole violation of making a bogus loan application when buying a $419,000 Florida condo. Marika Williams has not been charged.
Judge Rebecca Beach Smith of the U.S. District Court in the Eastern District of Virginia has ordered the couple to sell the condo along with their 15 automobiles — “many of which are luxury models” federal prosecutors said — and other assets to pay the restitution from their 1990 conviction on 148 charges that included fraud and racketeering.
“Defendants still owe nearly all of the $1,000,000 in restitution ordered in 1991 by this court to be paid to the government,” according to court documents filed by the U.S. Attorney’s office in Virginia. “Based of review of the materials and documents before the court, the authenticity of which is not disputed by defendants, the court finds the defendants are diverting and concealing assets through corporations to avoid paying restitution.”
According to court records the Runnells have only paid about $35,000 in restitution.
During the 1980s, the Runnells operated Landbank Equity Corp., one of the nation’s largest subprime lenders of second mortgages. But the company went bankrupt in 1985 after the Runnells were accused of bilking investors out of more than $52 million by using bogus credit reports, inflated appraisals and other fraud schemes, prosecutors said.
Savings and loans that had purchased the Runnells portfolios of sham loans lost millions and many had to go out of business, court records show.
The couple each served about 10 years in prison. Since then they have been running Phoenix Wells Institute, a company that uses hypnosis therapy to help people stop smoking and overeating and to deal with alcohol and drug dependency, eating disorders and stress, according to the firm’s Web site.
The Web site describes Runnells as a doctor, though prosecutors say he has no medical or other degrees, as a “hard-driving entrepreneur” who built a “multi-million dollar mortgage and real estate empire.”
On the Web site Runnells blames his financial problems on gambling, overeating and other addictions that he claims to have since overcome.
“We have learned from our own painful experiences,” Marika says on the site, though she mentions nothing specific about the couple’s convictions. “Compulsive behavior…can also result in endless financial, health and legal difficulties. We know. We experienced all this in our past.”
Court records show that the Runnells have filed reports with their federal probation officers of earning only about $5,000 to $6,000 a month. But prosecutors say that the “government’s analysis” of corporate records show the Runnells’ earned $516,296 in just the first six months of last year.
The government is also alleging that the couple is hiding other assets through “alter egos” and “corporate veils.” Judge Smith granted the government’s request that the Runnells turn over all of their financial records within 15 days.
“Piercing the veils would allow the court to reach the income and assets of the corporations in order to satisfy the restitution judgment against the defendants,” prosecutors said in the court filings.
