Wed08052015

News

Residents help police nab burglary suspects

Residents help police nab burglary suspects


Courtesy of Los Altos Police Department
Police used security-camera footage to identify two burglary suspects.

With assistance from the public, Los Altos Police identified two suspects in a residential burglary earlier this year. Police arrested...

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Schools

BCS parents host summer bridge camp for students in need

BCS parents host summer bridge camp for students in need


Zoe Morgan/Town Crier Editorial Intern
Bullis Boosters Summer Bridge Camp counselor Sonia Uppal teaches students the basics of computer coding last week.

The Bullis Boosters Summer Bridge Camp aims to reduce the achievement gap by offering a hands-...

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Community

Los Altos resident continues work toward eradicating No. 1 cause of infant deaths

Los Altos resident continues work toward eradicating No. 1 cause of infant deaths


Courtesy of Marge Shively
Kathy Radford, from left, Ann Roper, Sandy Harapat, Betty Gillmore, Jane Halligan and Laura Griswald stuff envelopes to raise money for spinal muscular atrophy research.

Proceeds from the 13th annual NorCal Walk-n-Roll,...

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Sports

Lovin' Levi's

Lovin' Levi's


Megan V. Winslow/Town Crier
Mountain View’s Austin Johnson, running after the catch, played multiple positions in Saturday’s game.

For Mountain View High’s Austin Johnson and Homestead’s John Rak, the highlight of playing in Saturday’s 41st annu...

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Comment

My solar clothes dryer: A Piece of My Mind

My cousin periodically sends me Internet nostalgia with comments along the lines of “Are you old enough to remember this?” One of her recent items struck me as newly useful in our energy-conservation-conscious times:

The Basic Rules for ...

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Special Sections

Killer crossover

Killer crossover


Gary Anderson/Special to the Town Crier
The 2016 Mercedes-Benz GLC crossover is scheduled to debut this fall in the United States.

After a press drive through the Alsace wine region between France and Germany in the 2016 Mercedes-Benz GLC, we have ...

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Business

Cetrella ventures from seaside to Silicon Valley

Cetrella ventures from seaside to Silicon Valley


Alicia Castro/Town Crier
Managing partner M’hamed Bahet oversees the new downtown Los Altos restaurant Cetrella, which features coastal cuisine and decor that celebrates the Peninsula region.

“Rustic,” “worldly” and ...

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Books

Book Signings

• Fritz and Nomi Trapnell have scheduled a book-signing party 4-6 p.m. Aug. 1 at their home, 648 University Ave., Los Altos.

Fritz and his daughter, Dana Tibbitts, co-authored “Harnessing the Sky: Frederick ‘Trap’ Trapnell, ...

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People

LILLIAN FLORENCE SLAVIN

LILLIAN FLORENCE SLAVIN

April 9, 1921 – July 17, 2015

Lillian Florence Slavin, long-time resident of Los Altos and The Forum at Rancho San Antonio, died peacefully on July 17, 2015.  She was 94 years old.

Lillian was born on April 9, 1921 to William Broadley and Fl...

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Travel

Gearing up: Make travel more civilized with accessories

Gearing up: Make travel more civilized with accessories


Eren Göknar/Special to the Town Crier
San Francisco-based humangear Inc. sells totes, tubes and tubs for traveling.

In travel, as in romance, it’s the little things that count.

Beyond the glossy brochures lie the travel discomforts too mun...

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Stepping Out

Funny 'Forum'

Funny 'Forum'


David Allen/Special to the Town Crier
Foothill Music Theatre’s “A Funny Thing Happened on the Way to the Forum” features, from left, Tomas Theriot, Todd Wright, Mike Meadors and Ray D’Ambrosio.

Some plays are meant to be quite serious, while oth...

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Spiritual Life

Life is fleeting – and you can't take stuff with you

Anyone who knows me knows that I love going to garage and estate sales. I love a bargain. I have enough stuff to live on, so now I seek out things that are interesting to me. I like looking for interesting artwork, though now my wife has tasked me ...

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Magazine

Inside Mountain View

Residents gather at NASA Ames for Pluto Flyby event

Residents gather at NASA Ames for Pluto Flyby event


Megan V. Winslow/Town Crier
NASA Ames’ Pluto Flyover event kindles the imaginations of young attendees.

Sue Moore watched the July 20, 1969, moon landing beside patients and staff members of the San Francisco hospital where she worked as a nurse...

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Both sides move for decision in Ponzi case

In what may prove a last barrage of documents, the Securities and Exchange Commission and Los Altos resident Mark Feathers filed dueling requests for a judge’s final decision last month.

Feathers, accused of misleading investors in the funds he managed, asked U.S. District Judge Edward J. Davila for a summary judgment exonerating him.

His Los Altos-based company, SB Capital Corp., managed two funds that had gathered approximately $42 million from investors over the past five years. When the SEC seized them in June, an appointed receiver assessed the funds’ holdings at approximately 75 percent of their stated value, suggesting that investors lost some but not all of their money.

SEC prosecutor John Bulgozdy seeks more than $12.3 million from Feathers, the amount approximately representing what his 400 investors stand to lose as the business is dismantled, plus a $300,000 additional penalty. Bulgozdy did not suggest that Feathers necessarily had that money among his assets, currently frozen by the court.

In its case, the SEC depicts SB Capital as a company that had lost money on underperforming investments in recent years.

Bulgozdy presented evidence that Feathers had moved money around the business to disguise losses, present investors with the appearance of success and continue to pay himself.

Feathers, in turn, submitted documentation of SB Capital investor correspondence that he believes demonstrates that his company operated transparently and with investor notification and approval.

At the heart of the case lie questions of comprehension: Did investors understand, read and sign documents concurring with SB Capital’s business practices; and did the company break the law even if it had investor support?

Investor approval or deception?

One document, an SB Capital mailing introduced as evidence, illustrates the contending interpretations heard in court. In it, Feathers cheerily stated that fund note investments were “performing as agreed” but requested that investors sign a form allowing the company to make a loan to itself, or, as he defined it, “assume any deficit to the note amount through a receivable to the fund.” He assured them that “this action will not likely have any material bearing on future fund member earnings.”

According to the SEC’s interpretation, Feathers sought to borrow funds so that he could continue to return interest at a rate approaching 7.5 percent and fund his business, even as the investments failed to perform. Feathers alleged that this act of borrowing was explained in writing, but some investors interviewed by the SEC claimed they absolutely did not understand that their investments were not performing as well as returns seemed to indicate.

Campbell resident Robert Morris described investing larger and larger increments of money with Feathers’ company, as his account statements showed a rosy rate of return each month. He reinvested that return, sinking himself deeper into the enterprise.

“At no time did I understand that I was being asked to approve (SB Capital) borrowing money from IPF (Investors Prime Fund) or SPF (SBC Portfolio Fund), nor did I understand that I was being asked to ratify prior borrowing from the two funds,” he wrote in a declaration.

Decoding assets and liabilities

In addition to arguing that he fully met disclosure requirements, Feathers counters in his court filing that the borrowed money was used properly as “reimbursement of expense or for monies to be spent for expenses.”

David Gruebele, a consultant who worked with SB Capital on accounting issues, explained in a declaration that because SB Capital borrowed the money as a “due from” or manager’s note, it was recorded as an “asset” of the funds rather than an expense.

“I advised Mr. Feathers that (the funds) had distributed more to investors than the funds’ income at that point in time,” Gruebele said. “In response, Mr. Feathers usually assured me that additional income was going to be generated in the near future from new transactions that would balance the overdistributions and/or generate net management. From early 2010 through early 2012, the amount owed by (SB Capital) to the funds grew by millions of dollars.”

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