Deputies’ Use of Allegedly Stolen Money Described : Drug funds: Cashier’s checks, cash paid for car, other items. Businessmen testify at money-skimming trial.

Building contractors and bank officials were among the parade of witnesses who took the stand Wednesday to testify about how seven Los Angeles County sheriff’s deputies accused of money skimming spent the cash they allegedly stole.

It was the first full day of testimony in which the prosecution attempted to show how the defendants--all members of elite narcotics investigation teams--disposed of some of the $1.4 million they are accused of stealing from drug dealers and money launderers in 1988 and 1989.

Prosecutors focused primarily on the purchases and financial transactions of Deputy Macario M. Duran, who Assistant U.S. Atty. Thomas A. Hagemann called in his opening statement a “classic” example of how the defendants laundered their money.

Geniel Williams, an assistant vice president and custodian of records for First Interstate Bank, testified that Duran and his wife, Maria, used cash to buy a series of cashier’s checks ranging in amounts from a few hundred to several thousand dollars during 1988 and 1989.

Several of the checks--made out to various entities, including Coldwell Banker Escrow Inc. and a financing company that assisted the Durans in purchasing a $55,000 Mercedes-Benz--were for more than $5,000, said Williams. However, none exceeded $9,500--a critical point, since a cash purchase of a $10,000 cashier’s check would have triggered the filing of a currency transaction report with the Internal Revenue Service.

Another witness, Larry Kositcheck, testified that in the course of doing thousands of dollars in electrical, repair and remodeling work for the Durans, he was once paid as much as $5,000 in cash by the couple.

Kositcheck testified that he spoke to Duran shortly before he was to be interviewed by IRS agents in regard to work he had done for the deputy.

“He didn’t want me to say anything about the cash I’d received,” said Kositcheck when questioned by Assistant U.S. Atty. Jeffrey C. Eglash. “I told him I had it in my records and I had to report it. I wasn’t going to lie to the IRS.”

Kositcheck added that he later saw a copy of the memorandum of the interview at Duran’s home. Duran asked Kositcheck if everything attributed to him in the memorandum was true and then disputed a statement in which Kositcheck told agents that Duran had said his Mercedes-Benz was his undercover county vehicle.

“He said he’d never said that. And his wife said he must have been joking if he did,” Kositcheck said.

“But had he in fact told you that?” Eglash asked.

“Yes,” the witness answered.

Under cross-examination by Duran’s attorney, Kositcheck acknowledged that the Durans did not appear to be trying to hide their financial transactions since their names appeared on the cashier’s checks they often used to pay him. The witness added that the couple paid him in amounts that were in accord with the demands he had established.

Testimony was not limited to Duran’s expenditures.

Ross Reinoso, a custom home builder in Bullhead City, Ariz., said he was working on a project when defendant Eufrasio G. Cortez and his wife stopped by and asked if he built other homes. In March, 1989, he contracted to build a home for Cortez that, when completed, cost about $86,000.

After an initial payment of $5,000 by personal check, Reinoso testified that Cortez later paid him $19,000 in cash. Subsequent payments were made primarily in the form of cashier’s checks to cover amounts as high as $24,000.

However, Reinoso added that he told Cortez he preferred payment in a form other than personal check, because such checks took too long to clear.

Under cross-examination by Cortez’s attorney, the witness further acknowledged that Cortez never tried to hide his financial transactions by asking Reinoso not to go to the bank or to deposit the payments in amounts less than $10,000 to avoid the IRS.

The $19,000 transaction is critical, because Cortez was specifically charged in the federal indictment with making the payment in cash so he could dispose of the money and hide the fact that it had been stolen.