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Millions missing in funds controlled by L.A. federal judge

At least $5 million, and perhaps 10 times that amount, appears to be unaccounted for in funds entrusted to U.S. District Court Judge Manuel L. Real, and the rival Filipino claimants to the account want the controversy-plagued Los Angeles judge to provide full details of what happened with their money.

In a protracted legal action brought by victims of late Philippines dictator Ferdinand Marcos, Real had been given control over about $34 million in assets seized from a Swiss bank account and a Panamanian shell company while the Manila government, the Philippines National Bank and individuals abused by Marcos pressed their claims to rightful ownership of the funds in U.S. courts.

But the U.S. Supreme Court last year sent the battle to Philippines' courts to resolve, and it ordered Real to remit the entrusted funds to a Merrill, Lynch, Pierce, Fenner and Smith Inc., account for safekeeping while the ownership issues are resolved.

Real, 85, who has been privately reprimanded by the judicial council of the U.S. 9th Circuit Court of Appeals for misconduct and been stripped of responsibility for at least eight cases, has so far refused to provide more than a perplexing half-page list of account activity that leaves unclear whether or how much interest was earned on the funds over nearly a decade. His account mentions a $63,000 payment for trustees fees and nearly $5 million in "other disbursements." It also alludes to $98 million in purchases and $118 million in sales, suggesting the account earned at least $20 million in transactions.

Real "doesn't comment on things," his clerk, William Horrell, said when The Times called the judge's chambers for his reaction to demands that he explain what happened to the plaintiffs' money.

On behalf of the Philippine National Bank and other claimants, attorneys in New York, Washington and Honolulu have appealed to the 9th Circuit to demand a detailed report on the fund activity since 2000 because "we are concerned Judge Real's purported accounting of the assets was incomplete and failed to provide us with adequate certainty that the right amount of assets was returned to Merrill Lynch," said Kenneth S. Geller, an attorney with Mayer Brown in New York, which is representing the bank.

"There could be as much as $50 [million] or $60 million that hasn't been returned," Geller said of the absence of any discernible records. While court escrow funds are usually invested conservatively, Geller noted, "we don't know if it was invested in 1% interest or aggressively traded and earned a lot of money."

-- Carol J. Williams

Comments () | Archives (21)

118 million in sales and 98 million in purchases suggest at least 20 million in earnings? that's pretty suggestive and not very objective for a news report.

if you start with 200 million in stocks at the beginning of 08, get out of the market as it crashes and preserve 118 million, then take 98 million of the 118 and invest it in bonds, you still lost 82 million...

No honest men among the rich and powerful.

I'm perplexed. A judge handles investments? And "trustees fees" would indicate a trustee. Would not that person be the fiduciary handling the money, with the judge with eventual oversight? Like happens in probate court everyday? I would think the judge's role would be oversight to assure the trustee's actions were prudent.

Where is the trustee's report? Did the judge choose the trustee? And only $63,000.00 for trustees fees?

"Real, 85, who has been privately reprimanded by the judicial council of the U.S. 9th Circuit Court of Appeals for misconduct and been stripped of responsibility for at least eight cases,"
Why is this guy still on the bench much less entrusted with $34 million of somebody else's money? Don't these courts police themselves at all? Don't bother answering that. We all know the answer anyway.

There is a reason why M. Real has repeatedly been reprimanded by the 9th and is generally considered to be the worst judge in the Central District.


And this guy isn't being hung?

This article is basically unintelligible. You start out talking about $5 million - and never explain that figure - then segue to $34 million and never really account for that, then make an allusion to an alluded-to $98 million and $118 million - $216 million in all - and never resolve any of the questions. Did Judge Real personally control the investment of these assets? Did he have a stock broker to whom he entrusted them? Did they go to Bernie Madoff or Arthur Nadell or any of the half-dozen multimillion/billion-dollar crooks who have recently been exposed? For heaven's sakes, at least tell us what bank they were kept in!

Drink your Alcohol.
Watch your Television.
And, above all....
Have Faith in the System.

We are A Nation of Laws.

Where are the basic facts? When did he get control of the money (34 million)? What does "control" mean in this case? Does it mean that he personally made investment decisions? What does the district court usually do with money that is in dispute? Was something done differently here? How much did he turn over to Merrill Lynch and when?

Horrell is right, Judge Real does not comment on things.

Judge Real does not obey the law either. Judge Real takes the law into his own hands. Sounds like he's done it again.

In violation of federal law, he prevents litigants from filing documents, if he feels like it, and if you complain about it - he has D.O.J. police come to your house and harass you - like they did to me. Fortunately I got their license plate as they were leaving and reported them, but of course he got away with it and so did the D.O.J. police.

In violation of federal law, he thumbs his nose at the authority of the United States Court of Appeals above him, ignoring their rulings on cases like mine that get sent back to his court: Lechner v. Capital Group, American Funds et al USCA 9th Circuit docket #07-56859

so I had to file a second appeal, which is the one now pending

let's see if the United States Court of Appeals lets Judge Real over-rule them, that would really be quite something

Judge Real over-ruling the higher court

now that's really something

Maybe we should come right out and accuse him of the obvious: HE STOLE IT.

With all due respect to the octogenarians out there, I don't understand why an 80+ year old judge is allowed to stay on the bench. 80+ year old judges should be consulting or tinkering in the garden, not on the bench.

Must be a liberal democrat. Probably a hippie left over from 1960.

He probably gave it to Madoff.

Lock this creep up. Charge him with theft. Strip him of his pension! Are there any sane people in California government?

A curious response to a request to the court for clarification " "The judged does not comment on things". Hm.

He must of taken the "madoff 101" course from bernie.

i had a judge when i did not want to serve in a jury for religious reasons,here in Tennnessee,he before many,many people,stated that anyone that did not want to serve on a jury because of their religion,they are not a part of the system or society.this was a judge acting in capacity as a form of State case.I showed him a paper,of the 19430r 1942 WVA Case and he was so angry,furious,he was shaking,lips quivering.he still,retired is used by our State to decide cases,why?I have wanted to sue the state,others over this even though it happened in 1990's,in Tennessee.

It's time to stop deifying the Judiciary.

Corrupt Judges belong in the stocks, with egg and excrement on their faces.

I was to appear for jury duty on nov02,1992,and the judge here in tennessee made remarks publicly in front of hundreds of people,dressed in robe,at bench,about someone that did not want to serve on a jury for religious reasons,was not part of the system or society.I showed him letter citing Ct.ofAppleals W.Va,1943,and others in 1963,1966,other courts,and he was angry,shaking,lips quivering.earlier,a Court employee,told me that my grounds were not valid,yet she exempted a student from jury duty.My june 12,1993 vice president of the US 0ffice letter said this was"very serious",and yet this judge later retired,and then has from time to time been used by the state to decide(or judge?)on the bench by our State even after he did this.would a State harass,persecute someone over reporting this?

C'mon people. Wake up. All the Fed Judges are like little Saddams.
Once they are in, the only way out is for them to drop dead, and that rarely happens. Just like tenured professors, they are there for life.

Remember, our Justice system is:

"By the Criminals, For the Criminals".

You can always get all the justice you can afford.
That is exactly why Lady Justice is blindfolded; indicating
that justice pays attention only to the CASH.


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