Harriet Lyons
The Quixtar Diamond who never was....
Charged with 54 counts of fraud.

iAchieve May/June 2002
 Hal & Harriet's Diamond Tape Excerpts

Original page on the Lyons

Santa Barbara News-Press
Local News

Woman accused of scam arrested on new charges




A Goleta woman awaiting trial on charges that she bilked two elderly women out of about $925,000 -- by falsely claiming she needed cancer treatments and her son had been kidnapped -- now is also charged with stealing at least $1.5 million from eight other victims through bogus investments, according to a prosecutor and court records.

Harriet Lyons, 57, who had been free on $50,000 bail, was arrested by sheriff's detectives last week on 19 felony counts. She is being held in County Jail with bail set at $2 million. She has pleaded not guilty and is scheduled for a preliminary hearing on the new charges before Superior Court Judge Brian Hill on Aug. 12 , Deputy District Attorney Mary Barron said.

She said those allegations involve "theft by false pretenses," using what appear to be fraudulent investment schemes. Ms. Lyons "either didn't pay back any of their money or only repaid portions of it," she said.

Quixtar Achieve May/June 2002
Pages 10, 11
(Quixtar Diamond Club in Hawaii)

Ms. Lyons' lawyer in the new case, Deputy Public Defender Michael Ganschow, could not be reached for comment.

The five-page complaint filed against her last week alleges she induced Scott and Diana Haskins to invest about $427,000 in a fraudulent business investment scheme involving the purchase of educational products.

The other alleged victims include Dr. Dennis Dierenfield, a Santa Barbara dentist, Kathleen Mary Gregory, Deborah Branch, Alison Hubbard, Mary Anderson and 79-year-old Marilyn Perry.

Ms. Barron said their combined losses are probably more than $1.5 million.

"That's a conservative estimate," she added.

The former teacher was facing up to 12 years and eight months in prison for the 2003 charges of theft by false pretenses from the two elderly women. Ms. Lyons was arrested in July 2003 on suspicion of conning a 77-year-old acquaintance, Hazel Lyon of Hope Ranch, out of $325,000, authorities said. That money was supposedly to pay ransom for the defendant's 24-year-old son, who she claimed had been kidnapped in Chicago, according to court documents. Sheriff's detectives determined no kidnapping had occurred and said Ms. Lyons instead used most of the money to pay off other debts.

At a preliminary hearing in December, the elderly victim testified Ms. Lyons arrived at the Hope Ranch home "crying and upset" and said she desperately needed money to pay ransom so her son wouldn't be killed. She said she wrote the check for $325,000 "because I thought it would save his life."

After reading a News-Press story about Ms. Lyons' arrest, an 86-year-old Montecito woman, Barbara Ward, reported to sheriff's detectives that she had given the defendant checks totaling about $600,000 from 1987 to 1997, thinking the money was for cancer treatments and medical care for Ms. Lyons and her husband, Harold. Less than $200,000 has been repaid, Ms. Ward testified in December.

Quixtar iAchieve May/June 2002

Detectives determined that none of the hospitals mentioned by Ms. Lyons had ever treated her or her husband for cancer, according to the felony complaint.

Defense lawyer Michael Carty, who is representing Ms. Lyons on the original charges, said Wednesday that efforts are being made to repay both of the elderly women as soon as possible. He characterized his client's actions as "borrowing by false representations" and contended she had planned to repay the money quickly.

Mr. Carty confirmed that Ms. Lyons was formerly a teacher at Laguna Blanca School and other local elementary schools -- "and a very good one," he said.




Harriet Lyons is accused of being an unusual sort of scam artist.

Unlike the con man who hits town, stokes investors' confidence then disappears with the money, the Goleta woman is accused of victimizing people who have been her friends here for years.

They trusted the former teacher when she promised high returns by buying discontinued textbooks and supplies wholesale, then selling them to school districts for big profits.

Sheriff's detectives have turned up no evidence that such a business ever existed, and they allege all the money she collected -- perhaps more than $2 million -- was used for other purposes, including paying off her personal debts.

Several investors met Ms. Lyons, 57, through the Amway Corp. or at Quixtar meetings. Others have children she taught at Montecito Union School or Laguna Blanca School. Some attended the same church as she and her children. Her connections with several passed through the Knowlwood Tennis Club on East Valley Road, where she had a family membership and played regularly.

"I was playing tennis with her son even before I knew who she was," recalled Dr. Dennis Dierenfield, a Santa Barbara dentist who met her about three years ago and is one of 15 people Ms. Lyons is charged with collectively bilking out of more than $2 million.

The total includes money from two elderly women whom authorities said she conned out of a combined $925,000 by falsely claiming her son had been kidnapped and that she needed money for cancer treatments for herself and her husband. The son was never abducted, detectives said, and there's no evidence either Ms. Lyons or her husband, Hal, ever had or were treated for cancer.

She has pleaded not guilty to all charges, and her defense lawyers have declined to discuss specifics of the criminal allegations with the News-Press. Ms. Lyons' preliminary hearing is expected to conclude today on 54 counts stemming from the alleged investment scams.

She already faces trial in October on felony charges of defrauding the elderly women, charges punishable by up to 12 years and eight months in prison if she's convicted.

Ms. Lyons was arrested on the previous fraud charges in July 2003. While free on $50,000 bail in that case, she was arrested again July 26 on the investment allegations and remains in County Jail in lieu of bail, now set at $2 million.

"I think a lot of people she touched (financially) were people she knew, who never suspected she was a criminal," said Dr. Dierenfield, who invested $155,000 with her from December 2002 to July 2003. Most of that was eventually repaid, but much later than promised and only after he badgered her to get it back, he said. He never collected any interest.

Unsuspecting friends included Deborah Branch, who until recently owned the Tennis Shop of Montecito. She first met Ms. Lyons about 34 years ago. "She was my son's first teacher at Montecito Union School, in the fall of 1970," said Ms. Branch, who lost all but $1,000 of the $10,000 she invested in March 2003. "She's a wonderful teacher and such a competent person. That's what's such a mystery about this for me."

Another investor from Montecito, who asked to remain anonymous, added: "She was really part of the community. She taught all of our kids in school."

Ms. Lyons was also described, however, as someone who could convincingly talk a blue streak.

"This woman could have sold the Nile (River) to somebody .Ê.Ê. she was that persuasive," said UCSB volleyball coach Kathy Gregory, who invested $20,000 with Ms. Lyons in November 2002. She allegedly was promised -- like most the others -- to be repaid in full, plus 20 percent interest, within one year.

"It was partly my fault, to be honest," said Ms. Gregory, who has recouped only $1,000. "If something sounds too good to be true, it probably is."

Ms. Lyons' daughter was a high school volleyball player and once attended Ms. Gregory's volleyball camp. "I wouldn't say we were good friends, but I have known her" for about 20 years, Ms. Gregory said.

She recalled "having a bad feeling about it the minute I gave her the money," she said. "I should have realized, .Ê.Ê. but she's a woman who was a teacher and is married. It's not like you'd think she was some con person."

"The fact that she had been a teacher and was involved in education made it seem so plausible," Ms. Branch said. "It's just so unbelievable to me because I liked her and considered her a friend."

One of her fellow parishioners at Trinity Baptist Church, Mary Anderson of Goleta, was going through a divorce and struggling financially in early 2000 when Ms. Lyons coaxed her into investing $25,000, according to court records and hearing testimony. She did so with the understanding all that money would be repaid, along with the trademark 20 percent interest, in four to six weeks.

Ms. Anderson told investigators she was only able to make that too-tempting investment by taking large cash advances on her credit cards. That led to major credit problems for her when Ms. Lyons failed to repay the money as promised, said Jalaine Hogue, a district attorney's investigator.

Several more alleged victims came forward in response to a News-Press story on her case published on Aug. 5, Deputy District Attorney Mary Barron said.

"All the victims," the prosecutor noted, "had one thing in common: They trusted her."

Scott Haskins of Goleta said he considered Ms. Lyons "a very good friend" for several years until she failed to pay back most of the estimated $427,000 he and his wife, Diana, invested with her in 1999 and 2000. As a result, the couple sued Ms. Lyons two years ago in Superior Court and eventually settled for $350,000, court documents show.

"This was the kind of person who would come to our family birthday parties, .Ê.Ê. and then to have this kind of thing happen is really a heartbreaker," Mr. Haskins remarked, adding that he first met Ms. Lyons at an Amway meeting in 1997. She assured him she could "get deals," he said, on books and other educational materials that could then be sold to charter schools and homeschoolers for big profits, which they would split.

"She's a very good liar," he added. "Everything about her presentation was a lie."

When investments are based "on friendship and a large level of trust," he said, "you let some things slide a little."

Ms. Lyons had occasionally worked Ms. Branch's tennis shop, and she even expressed an interest in buying the store last summer, before Ms. Branch sold it to someone else in December.

"She pressured me for a long time" to invest with her, offering 20 percent profit as a carrot, Ms. Branch said.

"As a con artist, she's fabulous. I could talk to her for half an hour and still not be sure what she said."

"I can't figure out what she spent all that money on," she added.

Lyons to face 54 fraud counts




Harriet Lyons of Goleta was ordered Monday to stand trial on 54 felony counts of defrauding 13 investors out of more than $1 million through phony schemes to resell educational materials.

Although authorities said she promised 20 percent or more interest, and usually full repayment within a year, most investors got little or no money or profit back, according to testimony at her preliminary hearing before Superior Court Judge Thomas Adams.

When concerned investors tried to contact Ms. Lyons for explanations, she often ignored their repeated phone calls and e-mails -- and fabricated a wide array of excuses for why their money hadn't been repaid by specified dates, sheriff's detectives and a district attorney's investigator testified. Ms. Lyons allegedly told one investor her money was tied up by a federal lawsuit, another that repayment had been delayed because of her father's medical problems, and to another she apologetically claimed she couldn't write a promised reimbursement check because her checkbook had been stolen.

The former teacher was first arrested last summer on charges of conning two elderly women out a combined $925,000. Free on $50,000 bail while awaiting trial in that case, she was rearrested July 26 on suspicion of the investment fraud. She now remains in County Jail in lieu of $2 million bail, and she is due back in court Sept. 3 for pretrial matters on both cases.

Ms. Lyons has pleaded not guilty to all charges.

The maximum penalty on the previous fraud case is 12 years and eight months. She would face an undetermined number of additional years if also convicted of the dozens of counts of grand theft by false pretenses, attempting to dissuade an alleged victim from reporting her losses to law enforcement, and related charges.

Her lawyer, Deputy Public Defender Michael Ganschow, presented no evidence or testimony in her defense at the three-day hearing and declined to discuss the allegations with a reporter.

Deputy District Attorney Mary Barron was pleased that Judge Adams found justification for all of the charges. "I think the evidence spoke for itself," she said. "And the judge made the right decision."

In the new case, Ms. Lyons is also accused of financial abuse of elderly persons. Two victims of the alleged investment scams are in their 70s.

The losses allegedly ranged from $10,000 to $427,000, with several individuals or couples having invested more than $100,000 apiece.

One woman invested about $150,000 in late 2002 and early 2003, even though her financial consultant had warned the deal offered by Ms. Lyons "sounded too good to be true," court documents state.

Authorities said Ms. Lyons told investors their money would be used to buy discontinued or discounted textbooks and educational products, which she claimed would be resold to schools for large profits. Detectives said they have turned up no evidence that she ever operated such a business.

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