Page 4 of 6
In August 1990, Smith pleaded guilty to three felony counts of grand theft. It was a deal that included the remodeling scams in Union City, which were still moving through the court system there. He spent 90 days in a minimum security prison and was sentenced to five years probation and restitution.
On Nov. 15, 1996, as Smith prepared to launch the Lamborghini test-drive business, he petitioned the Alameda Superior Court to release him from those past sins. Judge Carl Morris granted that petition on Dec. 16, dismissing him from penalties and reducing the conviction to a misdemeanor.
Neither the Araujos nor the Senegals had any idea where Smith was, let alone that he was back in court. And no one contested his petition.
"That was probably the only thing that I intentionally did to acquire money on a temporary basis that I'm actually guilty of," Smith says. "I was going to use the money and then pay them back. I'm guilty of intentionally taking the money, but it was just supposed to be taking it temporarily."
Smith says he took the money to invest in property, having just attended an inspiring real estate seminar. The plan was to buy the property, sell it for a profit, and then repay the security deposits. But there was a problem: He got arrested before the plan was fully executed.
"I unethically did this little thing to borrow the money and I was going to pay them back," he says. "They probably don't believe that I was going to pay them back."
But, Smith insists, he will.
"I've taken a year off to stop making payments and get on my feet."
By 8:50 a.m., an assortment of people start to gravitate toward Department 8 of the Hayward Courthouse, waiting for their chances to participate in what is truly the People's Court.
When the door to small claims court opens, the group files into theater seats, clearly awaiting someone to tell them what to do next. A clerk swears the whole bunch in at once. A deputy shuffles in and, almost as an aside to his conversation with the clerk, announces that court is now in session.
Judge Julia Spain begins to call each case on the roster -- evictions, rent due, money owed on a loan. Eventually comes the call, "Porter versus Smith."
Stephanie Porter moves up to the table in front of the judge. Daniel Smith is not present this morning. Judge Spain studies the paperwork in front of her. It seems that Smith was supposed to make payments on a car, and Porter has not received them. Inside of 10 minutes, the case that took more than two years to get here is over. The judgment against Smith is for $3,500.
In October of 1994, Stephanie Porter advertised her 1979 Fiat for sale in the Hayward Daily Review. She says she got a call from a man calling himself D.W. Smith, who asked if she would be interested in investing in a business by giving him her car. He was putting together a group investors to buy a restaurant, he said.
They met at the Old Spaghetti House in Newark, where Smith explained his proposition.
"He was very professional," she remembers. "He showed us all around the restaurant. People seemed to know him.
"He was dressed in a nice suit, carried a briefcase. He was very polite, very nice, very charming. He had an answer for every question."
Before it was over, Porter had signed an agreement with Smith, giving him the Fiat. He would, in turn, give her $3,500 -- paid in $500 monthly payments -- and co-ownership in a company called Panther Financial Group, which would own the new restaurant. To be exact, she was to get seven shares of Panther Financial.
The agreement gives the address for Panther Financial Group as 44 Montgomery St. in San Francisco. Attached to the agreement are four pages of the various rules and specifics of a business deal in which investors pay $30 monthly dues to eat, drink, enjoy VIP parking, and have priority in employment opportunities at the new restaurant. And that's not to mention the "drawings and contests for fabulous prizes."
Porter remembers that Smith also told her he was going to buy a Lamborghini for the investors' use.
The first payment on the car was due Feb. 1, 1995. It didn't come. Instead, Smith called a couple of times, Porter says, telling her that things weren't going quite the way he'd planned and that he didn't have the money together. But if she gave him a few more months, he said, everything would be fine.
Porter says she received a $25 payment on May 3, 1995, and a $30 payment the next month. She has not received anything since, nor has she seen her car again. Smith told her that he'd sold it but didn't get enough money to pay her back.
Panther Financial Group does not exist. The restaurant owners later told Porter that Smith had approached them about buying the place but never did. After Porter spent two years and $400 searching for Smith to serve him court papers, she read about Dreamshare International in the newspaper and realized it involved the person who had taken her car.
Smith called Porter after he was served and told her that he had a money order for her, but had lost her address and didn't know where to send it.
Porter has never received it.
The day after Thanksgiving 1996, Postal Inspector Judy Groome was at home reading the San Francisco Chronicle, when she saw Dreamshare International's advertisement offering test drives of a Lamborghini.
The same advertisement ran in the San Francisco Examiner, the San Jose Mercury News, the Oakland Tribune, and several other Bay Area newspapers. Above the picture of the car was: "Experience the Dream." The ad included a vehicle identification number for the car and said that Dreamshare International was a member of the Better Business Bureau.
