CITY ACCUSES FIRM OF FRAUD; SYNCRO'S EVICTION BATTLE ESCALATES.

Byline: Anne Burke Daily News Staff Writer

The upholstery-shop owners who mobilized community support for their eviction fight at Van Nuys Airport submitted bogus work invoices and are providing space for an unauthorized film studio, city attorneys said Friday.

The accusations - leveled during a Board of Airport Commissioners hearing - were among a long list of alleged improprieties and lease breaches by Syncro Aircraft Interiors, which the city is seeking to evict from the World War II-era hangar it has occupied since 1990.

Assistant City Attorney Bret Lobner said the questionable invoices total about $80,000.

In one case, Syncro gave the city 11 invoices totaling $77,000 from Orange County-based Sadler Roofing. Roofing company officials reported giving Syncro one invoice for about $12,000, Lobner said.

Ira Reiner, the former Los Angeles County District Attorney who is representing Syncro owners Ed and Barbara Cesar, said his clients use ``curious accounting'' methods but are not guilty of fraud.

Reiner said no invoice was submitted for work not performed. He said the improprieties occurred because the Cesars - who cater to celebrity aviators such as John Travolta and Kevin Costner - used invoices from subcontractors to seek reimbursement for work done by their own employees.

``It is not a case study in good management, but it is actually what occurred,'' Reiner said.

The meeting was packed with Syncro employees, who complain that the Cesars - who reportedly started their business with $200 and a sewing machine - are locked in a David and Goliath fight with the city.

``I support my bosses 100 percent. They want to make this a flourishing business for the city of Los Angeles,'' said employee Virginia Pereira.

The Cesars submitted the invoices to support claims that they are owed $319,000 in rental credits for improvements, which transformed a dilapidated sanctuary for vermin and transients into a showcase for jet remodeling and movie production, Reiner said.

The Cesars have been renting the hangar month-to-month, but made improvements because they hoped to obtain a long-term lease.

The couple rents space at the hangar to several firms, among them Warner Bros. and film production companies. However, such uses are not authorized under Syncro's lease, Lobner said.

``Air Force One'' is among movies that used the hangar for filming.

Last May, the city gave the Cesars an eviction notice. The couple is challenging the ouster and asked for Friday's meeting so that city officials could explain the action.

John J. Driscoll, the Department of Airports' executive director, will make the final decision about the eviction. No date has been set.

The decision would normally be made by airport commissioners, but the group has a conflict of interest because board President Daniel Garcia is an executive with Warner Bros.

Lobner said that the Los Angeles Police Department's bunco-forgery unit investigated alleged fraudulence and turned over evidence to the District Attorney's Office.

The office declined to prosecute, Lobner said.

Lobner said that Syncro collected tens of thousands of dollars for renting production space for ``True Lies,'' ``Mortal Combat'' and other movies.

The money was not turned over to the city, Lobner said.

Ed Cesar countered that city officials have known for many years about film production at the hangar.

In another instance of alleged fraudulence, Lobner said that Syncro turned in two invoices totaling $21,000 from a paving company. The paving company said it did not use such invoices, Lobner said.

Syncro also is occupying the hangar's second level, even though the Cesars lease only the ground floor, noted Patricia Mary Schnegg, board vice president.

CAPTION(S):

2 Photos

Photo: (1) City official Kevin Rayan points out data on Syncro's allegedly illegal operations to an Airport Commission hearing Friday.

(2) Former District Attorney Ira Reiner speaks on behalf of Syncro Aircraft Interiors, which is fighting eviction from Van Nuys Airport.

Gene Blevins/Special to the Daily News