MALIBU, Calif. — Bernard Madoff’s massive fraud stunned some of the wealthy denizens of Malibu Colony, especially when a couple devastated by the scheme surrendered their oceanfront home to Wells Fargo Bank.
But some neighbors in the tony gated community in Malibu say the real shocker came when they saw one of the bank’s top executives spending weekends in the $12 million beach house and hosting eye-catching parties there. What’s more, a real-estate agent said Wells Fargo spurned offers to show the property to prospective buyers.
“It’s outrageous to take over a property like that, not make it available and then put someone from the bank in it,” said Phillip Roman, an 18-year Colony resident who lives a few homes away from the property.
Residents identified the home’s occupant as Cheronda Guyton, a Wells Fargo senior vice president who is responsible for foreclosed commercial properties.
Guyton could not be reached at her Los Angeles office. Wells Fargo declined to comment on Guyton, saying in a statement that we “don’t discuss specific team member situations/issues for privacy reasons.”
But the bank said it would “conduct a thorough investigation of the allegations” by neighbors.
The bank also said its ethics code wouldn’t allow employees to make personal use of property that has been surrendered to satisfy debts.
Such conduct would pose a conflict of interest, said W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley University in Waltham, Mass.
“For a business to allow this to happen in today’s ethically charged climate is quite suicidal,” he said.
And because Madoff’s fraud was the root cause of the situation, he added, “it’s like rubbing salt into the wounds of a national tragedy.”
Malibu Colony stretches three-quarters of a mile along the beach in the heart of Malibu. Its residents include actor Tom Hanks, former Univision Chairman A. Jerrold Perenchio and high-profile investment banker Michael Tennenbaum.
Colony residents said the woman they believe to be Guyton, along with her husband and two children, took up occupancy at 106 Malibu Colony Road shortly after Lawrence Elins turned it over to Wells Fargo Bank on May 13.
When a Los Angeles Times reporter used the buzzer at the home’s steel gate on Labor Day, a woman answered the intercom but declined to identify herself or come to the gate.
When asked whether the home had been foreclosed on, she said, “it’s not foreclosed. It’s owned by Collin Equities” — a Wells Fargo unit that liquidates foreclosure properties.
The woman on the intercom denied that she was living at the house or had been using it periodically over the summer. Asked whether she could say why she was at the home, she answered, “No, I cannot.”
