Three Men Indicted For Extensive Timber Scam Offered To Remove Diseased Trees, Sold Healthy Timber For $15 Million

Sat., July 20, 1996

Associated Press

Three men who offered to remove diseased timber from private land in Northern California allegedly cut about 7,000 truckloads of healthy timber and sold it for $15 million to Oregon mills, a grand jury says.

Theodore A. Combis of Klamath Falls, owner of Thena Inc., and two others were indicted Thursday on charges of mail fraud, interstate transportation of stolen property and prohibited monetary transactions.

Also charged were James T. Smith of Prineville and Albert E. Cornelius III, 49, of Mount Shasta, Calif.

Combis, 50, also faces charges of willful failure to pay payroll taxes, obstruction of justice and tampering with a witness.

The indictment alleges that the three men fraudulently removed about 25 million board feet of timber between 1993 and 1995 from property in a development called California Pines, near Alturas, Calif., then sold it to various Oregon mills for as much as $15 million.

“In terms of financial fraud, this is significant,” Assistant U.S. Attorney Lance Caldwell said. “It’s one of the larger cases we’re working right now.’

None of the men could be reached for comment. They are scheduled to appear in court Aug. 5.

In 1993, Thena Inc. sent letters to thousands of landowners in California Pines, offering to remove dead and dying trees at no charge after drought and an insect infestation damaged white fir trees in the area.

But while insects had damaged as much as half the white fir, it had damaged few of the Ponderosa pine and cedar in the area. Yet the loggers also removed much of that healthy timber from the lots, Caldwell said.

When some property owners canceled permission for Combis and his contractors to go on their property, Combis directed loggers to immediately log that property, the indictment charges.

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