Auction House: Las Vegan buys Spanish Trail home for $1.3 million

Wednesday, Oct. 22, 2003 | 11:01 a.m.

Moments after dozens of men and women imagined their house filled with the sounds of the ivory keys of a player piano, or debated whether a $1.2 million house with a golf course view across the street was worth more than one in which they were standing, the shouting was over.

Less than an hour after the government auction of the house that a convicted swindler had bought for his Playboy bunny girlfriend, 29 of 32 bidders left empty-handed: a lawyer-turned-investor, real estate brokers. Lots of brokers. A Los Angeles producer who has recorded Michael Jackson and Madonna. Indian investors, an Israeli couple, an Iranian builder, an Armenian Realtor.

Meanwhile, all over the country, there will be more than 100 victims of the home's former owner who will also be disappointed to find that the total proceeds of the auction -- about $1.45 million -- will probably pay back only a fraction of the millions that he took from them.

Only three people walked away with what they came for.

One placed a $22,500 winning bid on the Steinway baby grand player piano and another a successful $10,000 bid on a custom-made safe.

And then, emerging from the crowd was Joyce Kwan, a Spanish Hills resident described by her real estate broker Betty Chan as a "private person." She had outbid everyone else and became the proud owner of the Spanish Trail house plus most of its furnishings, for a little more than $1.3 million.

The house had a history that included its tenant, former Playboy bunny Sandy Bentley and its former owner and her former boyfriend, Mark Yagalla, the man convicted of bilking 110 people of more than $50 million. That's a lot of "formers," but no one said they thought the house was haunted.

Chan said Kwan bought the house for her mother, who lives in Canada, as a vacation home. The house went for $1.35 million, and Kwan got all of the furnishings -- save for the piano and the safe that held Bentley's jewelry on the second floor -- for $70,000.

The broker also said she didn't understand all the fuss over the house, adding that "houses sell for a million in Las Vegas all the time."

Shortly after noon, some who had dreamed and others who had crunched numbers only hours earlier filed from the five-bedroom, 5,600-square-foot house right out of "Lifestyles of the Rich and Famous" a little disappointed.

Linda Ben-Samochan had imagined the place for herself and her husband, Mordechai. "It was just a dream ... for the two of us," she said.

Mani and Nancy Patel, a couple originally from India who flew in from Los Angeles, had considered the house as an investment. But they weren't willing to go beyond $1.1 million. Mani, who owns a mortgage company called Itech Financial, said the house wasn't worth more because of its location looking over Hacienda Drive.

Tim Powers, a real estate investor from San Francisco, said he thought a house across the street overlooking a golf course was a better deal at $1.2 million.

Paul Rohani, a home builder and Realtor, came to bid on the house and its furnishings, but backed off when he saw Chan and Kwan.

"I know them and their bidding limits, and I wasn't willing to go that high," he said.

Greg D'Angelo, who said he said the house was "very masculine ... with its muted colors and heavy furniture," had thought of the house as an investment, a sideline to his business at Jake's Place studio in Los Angeles, where stars record their songs.

Britney Sheehan, spokeswoman for EG&G, the federal government contractor that held the auction, said her company called Yagalla in federal prison, where he is serving a five-year, five-month sentence for the Ponzi scheme he pled guilty to in December 2001.

"We asked him if had any comment on the sale," she said. "He said no."

Yagalla probably will also have no comment on the outcome of Tuesday's sale when it comes to his victims.

Only one of a series of sales held by the government to recoup some of the millions Yagalla promised to invest and then squandered on himself and his girlfriend, Tuesday's auction didn't do much to fill a $50 million hole.

"We recoup as much as we can, but unfortunately in most of these cases, the money is blown before you get to this stage," said Anthony Pounders, an official with EG&G.

Attorney Eugene Licker of New York, representing the court-appointed agent to identify and retrieve Yagalla's assets, said the house had an outstanding mortgage of about $1 million that must be paid before the auction's proceeds can be distributed to Yagalla's victims.

Then there's the lawsuit Bentley has pending over the $70,000 spent on the furnishings, which she says belong to her, since those furnishings -- marble tables, a Swiss music box, 19th century paintings, a brass lamp, a bronze clock, and so on -- were gifts from Yagalla.

Licker will be submitting a preliminary plan of distribution for Yagalla's assets to the Southern U.S. District Court in New York in the coming weeks, but he didn't see much coming from Tuesday's sale.

"You do the math," the attorney said, shortly before catching his flight back East.

"The proceeds of this sale probably won't amount to much.

"But it's better than nothing, for somebody who has lost everything."