DISGRUNTLED INVESTORS SEEK OWNERSHIP OF PAINTING.

Byline: David Greenberg Staff Writer

Investors who claim to have lost $19 million in a bogus stock scheme are trying to gain ownership of a valuable painting by renowned marine-life artist Robert Wyland in an effort to recoup some of their money.

Iris Limited Partnership, whose 400 members reside mostly in the San Fernando Valley and Ventura County, has taken steps to claim ownership of ``Feeding Frenzy,'' a Wyland work commissioned by Jerry Womack, who has pleaded not guilty to dozens of federal charges in the scheme.

Iris members said lithographs of the painting alone could generate $4 million to $7 million, while the 3-by-4-foot oil rendering of humpback whales in Alaska was almost auctioned off with a minimum bid of $218,000 last month.

``We have every intention of pursuing every legal means necessary to recover the investors' funds,'' said Brian Unsworth, head of Iris' board, who lost $5,000 in the scheme.

``This painting will set an example as to the serious nature of our recovery attempts. This could provide a significant recovery to our investors.

``It also provides notice to other parties that were unjustly enriched that we're not playing games. We're obviously more interested in the cash than the painting,'' he said.

But the dispute over who is the rightful owner of the painting could spill into the courts, Iris members and the gallery's attorney agreed.

Womack, a 51-year-old Las Vegas resident, commissioned Wyland to create the painting in late 1998 for $128,000, half of which he paid as a deposit, according to lawyers for Iris and the gallery.

But he never returned to the gallery or paid the $64,000 balance for the painting, which recently skyrocketed in value because Wyland stopped his painting-by-commission enterprise, Unsworth said.

Wyland, who divides his time between Laguna Beach and Oahu, Hawaii, is listed in the ``Guinness Book of World Records'' for painting the largest mural ever - the three-acre ``Whaling Wall 33'' in Long Beach.

When Iris members learned last month about the painting, they paid the $64,000 balance, using a portion of the $1.3 million in Womack's assets returned to them through the work of the FBI and private attorneys working on the case.

Because questions persist regarding the rightful owner, both sides signed a temporary agreement last month ensuring the gallery will not cash Iris' check or auction the painting until the criminal case against Womack is resolved.

``There are reasons to believe it was commissioned by Mr. Womack as an individual, not as an (Iris) business investment,'' said Marc Risman, the gallery's attorney. ``And the balance was not paid nor was the painting picked up in a timely manner. We need to determine to whom it belongs and also what rights are acquired with it.''

John Wallace, Iris' lawyer, said he might file a suit against the gallery to obtain the paperwork involved in the Womack deal, which Wallace said would prove the painting belongs to Iris' members.

``It was our hope we could work with the gallery and have them sell the painting,'' he said, adding that the gallery would be entitled to a yet-to- be-determined commission on the sale.

Meanwhile, Iris members said they have located approximately $4 million of Womack's assets and are optimistic they will locate more.

``We've done a hell of a job in identifying assets that belong to Iris,'' said Warren Gilliland, an Iris board member who lost $30,000. ``I'm definitely hoping we'll be able to get a significant chunk of each person's investment back.''

Womack was arrested in October 1999 and now faces 10 counts each of money laundering and forfeiture, as well as 12 counts of wire fraud.

Using two bogus Nevada companies - Iris and the now-defunct Jerry Womack LLC - authorities said Womack established a Ponzi scheme using money from later investors to pay off early ones under the guise of profits.

The remainder of the money was used by Womack for a personal nest egg, and was spent on houses, a boat, and expensive cars and jewelry for himself and his now ex-wives, authorities said.

He even invested $214,600 in an online pornography business owned by the ex-husband of his third wife, investigators said.

His defense attorney, Patrick Maginnis, did not return phone calls.

Womack is free on $50,000 bail, pending his Feb. 26 trial.

If found guilty on all counts, he faces up to 120 years in prison and a $20 million fine.

A civil complaint filed last month against Womack by the Securities and Exchange Commission will bring a separate trial sometime next year.