CHURCH LEADER ON TRIAL FOR BAD INVESTMENTS.

Byline: Janet Gilmore Daily News Staff Writer

They knew his family as good churchgoing people, and they came to know Rodney Swanson as a trustworthy, active lay leader of their church who once portrayed Jesus Christ in a play.

But in the end, several parishioners of Emmanuel Free Church in Burbank say they didn't know enough about Swanson the real estate salesman and investor, who offered them partnerships and attractive returns with the millions they invested with him.

``He always presented himself as an honest person to me,'' Carlo Napolitano said. ``I knew his family to be good Christian people. I assumed from those factors that he was an honest person. I trusted him.''

Napolitano was on the witness stand, testifying against Swanson in an Alhambra courtroom, where he is being tried on 66 felony counts - from securities violations to money laundering - stemming from what prosecutors call a real estate investment swindle they have documented from 1979 to about 1990.

Napolitano is one of 70 to 80 investors, many of them parishioners at Emmanuel Free Church and many of them elderly, who contend they lost millions with Swanson during those years.

Swanson, 47, has denied any wrongdoing.

During opening statements in his month-old trial, defense lawyer John Powers told jurors that the investments lost by Swanson were the result of a collapsed real estate market, nothing more.

``I think what the evidence will show is not that Mr. Swanson committed a fraud,'' Powers said, ``not that he lied and deceived. What he did was he got involved in other people who trusted him. And they took risks and they entered into investment transactions and transactions failed. People lost money. Swanson lost his fortune.''

Deputy District Attorney Anthony Colannino, who is still calling witnesses to testify against Swanson, calls the case an ``affinity'' crime. For the trial, Colannino built his case on complaints pursued by 10 people who claim to be victims.

``It is unusual in that the case involves large money loss and it involves a fairly large amount of people,'' Colannino said.

For Pete Peterson, a retired Burbank man who claims to have lost nearly $500,000, the sense of betrayal is key.

``This is what has made it so difficult,'' he said ``It was not just business; it was a close association of business.''

A number of Swanson's clients attended his church, knew his parents, met him through such avenues as Little League or co-workers. Some of them still perceive him as a nice guy.

And Swanson has received support and backing from members of Lake Avenue Congregational Church in Pasadena, his present church, where friends pledged their property to post his $5 million bail.

Robert Harris said he and a group of others at the church have offered assistance in the form of prayer, money and emotional support. Their concern, he said, is for Swanson, his wife and his three children.

``It's not a value judgment of what went wrong - right or wrong - that's going to be decided in the court system,'' Harris said. ``As a group of Christians, we're just trying to support them.

``A number of us have been close to the family for a number of years and believe that there is remorse and believe that this man is not a shrewd, merciless manipulator.

``This is a man who cares deeply about people and is sorry about what happened.''

Prosecutors contend that Swanson, for several years, received cash and property investments worth as much as $500,000 after offering double-digit interest payments plus potentially lucrative partnerships in real estate purchases.

For a while, some investors said, the real estate salesman seemed to be operating his business aboveboard. Some investors even received interest payments of a few thousand dollars, according to testimony.

But Swanson is believed to have issued phony grant deeds purporting to show that investors owned a percentage of residential or commercial property. Investors have recalled how Swanson moved their funds from one residential or commercial property to another without their consent.

Napolitano, on the stand, recalled how Swanson failed to place his name on property records as instructed and made numerous purported investments in a series of other properties without his consent and with no return on the investments.

Prosecutors said they learned of Swanson's activities in 1990, when congregation members complained that the Sierra Madre man had told them $10 million in investments had gone bad.

One churchgoer, reaching out to Swanson years ago when the defendant's mother was killed in a car crash, invested $50,000 in a real estate partnership deal.

The investor, Tom Kettering, said he has not seen that money since.

``Rod frauded me,'' he said in an interview. ``I'm very upset that we lost this money. We were becoming financially set for retirement.''

Thirty-four people sued Swanson in 1991, accusing him of being a shill for an accountant, escrow company and others who sought to defraud investors. By last year, with no opposition from the investors' attorney, a federal judge granted a motion to dismiss the case.

Some investors indicate they are still scratching their heads over the outcome, questioning both the legal system and the commitment of their counsel.

Some still hope that they'll somehow find a way to get some small percentage of their investment back.

If convicted, Colannino said, Swanson would face up to 12 years in jail and a fine.

Before his arrest in 1993, investors said, Swanson led an upscale lifestyle - he drove a Mercedes and a Lincoln Town Car and had a million-dollar house in San Marino, tickets to pro sporting events and monogrammed shirts.

``He was just too clean,'' Kettering said, recalling his wife's aversion to the defendant. ``So clean and smooth-talking. She did not care for him.''

Swanson talks about how his family is the most important thing to him, but Kettering said, ``What I keep wondering is what does he feel about our family, about those of us who are victims of his foolishness?''

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Photo

PHOTO Rodney Swanson, left, in Alhambra Superior Court on T hursday, is accused of bilking fellow church members, many of them elderly.

Tom Mendoza/Daily News