God Bless America

How a Newport Beach power couple used right-wing politics to build an empire worth absolutely nothing

He is a financial genius who manages "assets in the billions" for wealthy investors; earned a law degree at Harvard University; played baseball for the New York Yankees; flew Air Force One for President John F. Kennedy; and, as a colonel in the Air Force, was injured and held as a POW in the 1960s after performing covert missions for the Central Intelligence Agency (CIA) in Southeast Asia. She is the high-profile vice chairperson of the Orange County Republican Central Committee, a public-relations officer for Southern California Edison, and a frequent television commentator who espouses Christian traditional values and conservative politics.

Together, Edgar Dale "Eddie" Allen, 70, and his wife, Jo Ellen, 55, appear the ultimate storybook Corona del Mar couple, living model lives in their $900,000 ocean-view Spy Glass Hill house.

But last month, federal bankruptcy Judge Robert W. Alberts shattered the impressive façade, ruling that Eddie had for years fabricated his life story in schemes to defraud wealthy and modest-income individuals of millions of dollars. The Allens had hoped that the court would give Eddie and his company, American Life Underwriters, bankruptcy protection to block the investors from ever collecting their missing money. But after reviewing more than two years' worth of evidence, Alberts was unequivocal: Eddie had been "thoroughly discredited," in part by knowingly giving false testimony and presenting doctored evidence. The judge also accused Allen of continuing to hide several million dollars from creditors.

"At the outset of the trial, it was contended on Allen's behalf that there was only a 'kernel of truth' in the plaintiff's allegations. The court concludes that, quite to the contrary, the evidence before it indicates only kernels of truth in Allen's contentions," Alberts wrote in his 86-page Sept. 6 ruling. "This court finds that Allen was not a colonel in the U.S. Air Force; he was not shot down, captured and held prisoner during the war in Southeast Asia; he is not a Harvard-educated attorney or, for that matter, an attorney at all; and he was not the very successful, wealthy and astute businessman portrayed. Plaintiffs justifiably relied upon such misrepresentations when investing. . . . [Allen] is liable for fraud and is not entitled to the economic fresh start afforded to honest debtors under the [bankruptcy] code."

Nor are these accusations ancient history. On June 25, 2001, Mrs. Lee Pickett of Port Ludlow, Washington, asked the FBI to investigate the Allens. "Jo Ellen Allen is an accomplice to the façade by participating in recruitment dinners and social events with prospective victims," wrote Pickett, who gave Eddie $550,000 to invest for her. "Jo Ellen was present at a dinner I attended and gave a persuasive presentation about her husband's business venture. She uses her well-connected Republican Party alliances to promote Eddie's stature in the business community."

Pickett closed her letter by begging the FBI to intervene, saying Eddie's "fraud" had driven her and her husband into financial hell. "I'm 79 years old and have been told to prepare to go blind," Pickett wrote. "My husband is handicapped with a debilitating disease, and we have been forced to declare bankruptcy to try and save our home. Mr. Allen has bled us financially and destroyed what is left of our lives." The bankruptcy judge cited Pickett's courtroom testimony in his decision that Allen had defrauded his clients.

Allen, however, remains defiant. He told a reporter that the judge was "totally confused" and didn't understand the insurance business. His latest attorney, Donald Segretti—a former Nixon administration staff member convicted of crimes associated with the Watergate scandal in the 1970s—told the Weekly he and Allen are preparing an appeal.

With eyebrow-raising charges of sexual infidelity as well as colorful courtroom appearances by high-ranking CIA agents, past presidential advisers and decorated Vietnam-era military officers—all of whom refuted Allen's claims—it was Orange County's most fascinating bankruptcy trial. But news of the case—and Alberts' bombshell ruling—almost didn't make it out of the Ronald Reagan Federal Courthouse in Santa Ana. The Orange County Register—whose editors and management often share the Allens' politics and circulate in the same social and political circles—ignored the story altogether. The Los Angeles Times' Jean Pasco, a longtime friend of Jo Ellen's, sat on the story for nine days until Saturday—the least-read edition of the week. The Times also buried Pasco's coverage on Page 3 of the local news section. Not surprisingly, Pasco's version of events noticeably omitted evidence of Jo Ellen's participation in what Alberts called Eddie's "business machinations."

Jo Ellen Chatham was born in Indiana in 1946 on either Aug. 8 or Aug. 26; she has listed both dates on official documents. When she was a 21-year-old Los Angeles college student in 1968, a Malibu district judge married her to Ronald W. Thurber, a defense-industry budget analyst. They lived in a modest Granada Hills house, and she worked as an assistant professor at West Los Angeles College, teaching U.S. government classes and, for a short time, coordinating student campus activities. Thurber recently stated that his then-wife "wanted to be somebody," "wanted to be in politics her whole life," and was "snobbish."

The couple had been married less than eight years when Jo Ellen met the smooth-talking Eddie—already twice married and divorced—during a Little League baseball game in Northridge. Two months after her divorce of Thurber was final in May 1976, Jo Ellen and Eddie were married by a Baptist minister.

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