TARGETS OF PROBE SETTLING LAWSUIT SHERMAN OAKS COUPLE TO GET $1.8 MILLION.

Byline: ALEX DOBUZINSKIS Staff Writer

A Sherman Oaks couple whose home was raided by a Glendale Police Department SWAT team in a misguided insurance fraud investigation has won a $1.8 million settlement, officials said Monday.

Rouhel Feinstein, 55, and his wife, Marilyn Slome, were caught up in a 2001 investigation by Glendale police and the National Insurance Crime Bureau, and their home was raided in February of that year.

At the time, police said Feinstein was involved in a large-scale insurance fraud operation, and they impounded $1 million worth of luxury cars he owned, contending they might have been stolen.

``The truth of the matter is that none of it was true, and that's why they paid (the) money that they did pay,'' said Howard Price, an attorney for the couple.

The NICB paid $1.075 million in the settlement, and Glendale paid $750,000. The settlement was finalized last month. Glendale police Sgt. Susan Hayn and former NICB investigator Scott Shaw headed the investigation.

``It was a very, very complex... insurance fraud investigation,'' said Carmen Merino, senior assistant city attorney for Glendale.

``Unfortunately, we discovered that there were some problems in that (Hayn) relied on some improper information given to her by Scott Shaw.''

Shaw's attorney could not be reached for comment.

Police appear to have wrongly believed that Feinstein, a Jew originally from South Africa, was involved with an Iraqi-based terrorist organization called Mujahadeen El Khalq.

That's why they used the SWAT team to raid his upscale home, Price said.

``They used the SWAT team on a case that you never use a SWAT team for,'' Price said. ``There was no violence involved in the case, there was no violence in Feinstein's background, and nevertheless they broke in.''

Feinstein was targeted based on a conversation investigators had with an informant who mentioned him in connection with an insurance fraud case, Price said.

The informant had leased a car from Feinstein, who ran a mechanics shop and a car-leasing business on the side.

Authorities did not charge Feinstein until two years after his arrest, Price said.

He was charged with insurance fraud, possession of an assault weapon and tax evasion, but a judge dismissed the charges.

The NICB is a not-for-profit investigating agency supported by insurance companies.

Earlier this year, the agency fired Shaw, who previously worked for the Ventura County Sheriff's Department, NICB spokesman Frank Scafidi said.

``We had found out that there was some fabrication on his employment application,'' Scafidi said.

Feinstein had to give up his auto mechanic business because of bad publicity resulting from his arrest and now works in real estate.

alex.dobuzinskis(at)dailynews.com

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