Cox Is Dropped as Defendant in 1 First Pension Suit

SANTA ANA —  Rep. Christopher Cox has been dropped as a defendant in one of two lawsuits that accused him of helping to cover up the long-running Ponzi scheme at fraud-ridden First Pension Corp. when he was a private lawyer.

Robb Evans of Los Angeles, the court-appointed receiver for First Pension’s parent company, said Friday that he would not pursue the Orange County Superior Court complaint against the Newport Beach Republican and his former law partner at Latham & Watkins, John R. Stahr.

But an amended complaint by Evans alleges that the law firm and a former associate, Gary Mendoza, were negligent in handling legal matters for the Irvine pension administrator.

“We are very pleased,” said George Link, attorney for Cox. “The complaint against my client wasn’t meritorious from the get-go.” The receiver’s decision, however, doesn’t affect a fraud and malpractice lawsuit filed on behalf of about 8,000 investors who were swindled out of $136 million. Cox and Stahr remain as defendants in that case along with the firm and Mendoza, who recently served as commissioner of the state Department of Corporations and now is deputy mayor of Los Angeles.

The law firm and the three lawyers have denied any wrongdoing in their work for First Pension, which collapsed two years ago.

First Pension founder William E. Cooper and two cohorts admitted they operated a Ponzi scheme--paying off earlier investors with money taken from later ones. They are serving prison terms for a 12-year scam that bilked victims of $136 million.

In early April, Superior Court Judge Francisco F. Firmat threw out the receiver’s allegations of fraud and malpractice against Cox, Stahr, Mendoza and Latham & Watkins, but the judge allowed Evans to amend the lawsuit to fix defects.

“We dropped Stahr and Cox to streamline the case,” Evans said. No hearing has been scheduled on the amended complaint.

Meantime, the state Supreme Court this week refused to hear a petition by another defendant, the accounting firm of Coopers & Lybrand, which appealed after Firmat refused to remove the firm from the receiver’s suit.