Where Are the Cops?

For five years, Jon Illingworth has led the effort to expose Newport Beach businessman Edgar Dale “Eddie” Allen as a con artist who enjoys a life of luxury by defrauding millions of dollars from conservative Republicans across the country. In September, Illingworth won his biggest victory when a federal judge ruled that Allen gained access to other people's money by deceitfully posing as an affluent Harvard-educated attorney, Wall Street financial genius, and key CIA spy who advised Republican U.S. presidents and had been tortured while a prisoner of war in Vietnam.

But the usually indefatigable Illingworth is exasperated these days. Despite a string of victories—the judge's stinging decision enumerating Allen's “fraudulent modus operandi,” occasional media coverage, and the support of real CIA agents and military heroes—he is no closer to collecting the $40,000 he says was “conned” from his family in 1993.

Worse, Illingworth and other victims of Allen's deceptions note, no law-enforcement agency has moved against Allen. Illingworth thinks he knows why, and it has to do with something Allen told him five years ago: it's politics.

On Dec. 6, 1996, Illingworth, a mild-mannered, former picture-frame manufacturer, visited Allen's office near John Wayne Airport. He told Allen that he had discovered the businessman's sordid history and demanded money then 16 months overdue. Allen—who portrayed himself as worth more than $350 million even though federal records show his annual income was less than $18,000—stood in his trademark gray slacks and double-breasted, blue blazer and responded with what Illingworth calls “his usual, irrelevant small talk.”

“He always had excuses for not paying the money back, and he loved to tell long stories about what an important person he is,” said Illingworth, a 59-year-old retired Tustin resident. “But I didn't want to hear any of it that day because I finally knew he was a liar and a thief. I told him I wanted him to pay me my money then or I would contact the police and file a lawsuit.”

The threat annoyed Allen, who—according to a 1997 complaint Illingworth filed with the FBI—ended the confrontation with a claim that still haunts Illingworth. The businessmen bragged that he is immune from prosecution in conservative Orange County, where he and his wife, Jo Ellen—vice chairwoman of the powerful county Republican Party, an occasional television commentator and spokeswoman for the politically potent energy giant SoCal Edison—are on a first-name basis with fellow GOP prosecutors, judges and congressmen.

According to Illingworth, Allen calmly said, “The law can't touch me, and if it will make you feel any better, go ahead and sue me. Then you will really see how influential and powerful I really am.”


For five years, more than 16 individuals including Illingworth have urged authorities to investigate and prosecute Allen for crimes ranging from fraud to impersonating an attorney to income evasion. Their complaints have come to nothing.

One of those who has repeatedly complained has been Gerald Nowotny, a West Point Military Academy graduate and military veteran who worked with Allen in the mid-1990s until he uncovered suspicious activities. He wrote his first letter to the cops in July 1997. Nowotny nowadays has one question for Orange County law enforcement: “What does it take for you guys to open criminal investigations?”

“I would like to bring a serious crime to your attention involving fraudulent conversion of over $3 million of investors' funds in several different state jurisdictions,” Nowotny wrote in July 1997 to the FBI's Santa Ana bureau, the Orange County district attorney and the Newport Beach Police Department. “Eddie Allen has heavily relied upon the credibility and assistance of his wife—Jo Ellen Allen of the Orange County Republican Party and a [Governor Pete Wilson-appointed] member of the California Bar Association board of governors—to create the aura of credibility necessary to gain the trust and confidence of investors. We have significant documentation that demonstrates that Eddie has operated a Ponzi scheme.”

A Ponzi scheme is one in which the con man brings in new investors to pay off old ones, living off whatever he can keep for himself. Nowotny's “documentation” was apparently powerful enough for the slow-moving bureaucrats at the Securities and Exchange Commission in Washington, D.C.; they revoked Allen's securities license in 1996. But no law-enforcement officers in Orange County investigated the charges. Based on extensive interviews with Allen's victims, the Weekly has learned that the FBI told people to contact the district attorney; the district attorney's office pointed to the Newport Beach Police Department; and Newport Beach detectives have done nothing.

“I would like to think that in a country as great as ours, decent, innocent Americans are entitled to justice,” said Nowotny. “I wish I didn't have to say this, but the law enforcement has been worthless in this case. Eddie Allen has been able to operate in Newport Beach with immunity for some reason I just don't understand.”

Local FBI officials and the district attorney's office—which, records show, has on at least one occasion given Jo Ellen special, behind-the-scenes access to secret criminal databases—declined to comment on their lack of interest in pursuing Eddie Allen, who still conducts business in an executive office park near John Wayne Airport.

But Newport Beach police Sergeant Steve Schulman, the department's public-relations officer, said his detectives are aware of the allegations and acknowledged people may have lost large sums of money to Allen. But, according to Schulman, “the hard part” is proving Allen “intended to steal” the funds. When asked how police could determine the difficulty of a case before opening an investigation, Schulman responded defensively.

“We've decided to re-evaluate the case,” he said. “Check back in a couple of weeks.”


The Allens' victims say they've heard that before and believe police are bluffing in an effort to save face. In the 51 months since they filed detailed complaints, Newport Beach detectives have poured manpower and resources into prosecuting cases involving fewer victims, far less money and politically powerless suspects. A few of those cases include:

•$14,000 theft from a local youth soccer fund.

•allegations that a burglary victim exaggerated losses.

•a $65,000 embezzlement at a retail shop.

•a counterfeit Paul Mitchell shampoo-bottling operation.

•a minor who used the Internet to steal credit-card numbers.

•a telemarketing scheme that targeted elderly locals for a total of $40,000.

•a $700-per-month illegal housing-rental scam.

•a lengthy probe into city parking-meter thefts—a felony police say they will aggressively pursue.

•a three-detective-sting at a Fashion Island steakhouse where two parking valets allegedly stole eight Mobil gas Speed Passes.


Illingworth says police inaction on the Allen case has made “a mockery” of justice in Orange County.

“Somebody has stolen more than $1 million. You'd think the Newport Beach police would he interested. They're not. They don't even return telephone calls about Eddie,” he said. “If they had done something when we first told them about his scam operation, they could have prevented what happened to Mrs. Pickett.”

More than two months after the police were first informed about Allen's business practices, he took $553,000 from Lee Pickett, an 81-year-old who—because Allen has never repaid her one penny—was forced into bankruptcy to save her house from foreclosure.

“What will it take to bring this guy to justice before he destroys any more innocent people?” Illingworth asks.

Schulman says not to worry.

“We're on the victims' side,” he said. “Believe me, it is usually us who want to put the bad guys in jail.”

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