Couples from San Luis Obispo and Santa Barbara are among the plaintiffs in a lawsuit charging that a former Santa Barbara man and other people and companies allegedly stole more than ,80 million from 130 people in 12 states.

The class-action lawsuit filed by the Santa Barbara law firm of Hollister & Brace claims the money was stolen in a complicated Ponzi scheme involving &#82201031 exchangesC of commercial real estate.

The focus of the lawsuit is Donald Kay McGhan, described as a pioneer in the breast implant industry, and exchange accommodators Southwest Exchange, or SWX, of Nevada and Qualified Exchange Services, or QES, of Santa Barbara.

&#8220Exchange accommodatorsC are companies that hold funds in trust for &#82201031 exchangesC of commercial property in a process that allows sellers to avoid paying capital gains taxes (see related story).

But the lawsuit also names such high-powered companies as Citigroup Global Markets, Salomon Smith Barney and UBS Financial Services and some of their employees, who allegedly handled accounts for McGhan as part of their duties.

Also named are McGhan/s son, Jim J. McGhan, and daughter, Nikki M. Pomeroy.

Calls seeking comment from Donald McGhan/s attorney, Mark Dzarnoski of Las Vegas, were not returned by press time, and McGhan/s phone number in Las Vegas has been disconnected.

James R. and Mary Ciernia of San Luis Obispo and Jon R. and Marie L. Sorrell of Santa Barbara are among those suing McGhan and the other individuals and companies.

According to the suit, the Ciernias lost ,25,000 in the scheme, but the Sorrells lost more than ,719,600. The highest individual loss reported in the suit was more than ,2.74 million by SCCAA Holdings of Nevada.

The Sorrells could not be reached for comment, but James Ciernia said he is encouraged by the chain of liability laid out by the lawsuit.

&#8220When I contacted the lawyer (at Hollister & Brace), he said, >You/re one of the lucky ones,/C Ciernia said. &#8220How can you be lucky to lose ,25,000?

&#8220But, I guess, I only lost ,25,000,C he added. &#8220Some of these people lost their whole life savings.C

The lawsuit says the Sorrells sold property they owned in Lake Arrowhead and had the equity from the sale deposited with QES to purchase similar property in Santa Ynez.

When the scheme collapsed in January, they lost ,719,610 that QES was holding in trust to pay for the Santa Ynez property.

Ciernia said his case is not typical of the other plaintiffs/ cases because he had not yet sold his property nor had he started the process of purchasing another property to replace it.

But anticipating the sale, Ciernia deposited ,25,000 with QES.

&#8220It was part of the down payment to complete a sale,C he explained

&#8220I told them to put it into a trust fund as a nonrefundable deposit,C he continued. &#8220Then, when another buyer stepped in, we/d complete the 1031.C

But the scheme fell apart before that happened, and Ciernia/s ,25,000 also disappeared.

According to the lawsuit, many of the victims not only lost the funds from the sale of their properties but also now must pay capital gains taxes on those funds and are liable for additional damages to the sellers for defaulting on purchase contracts.

Michael P. Denver, one of the plaintiffs/ attorneys, said that as far as he knows, no criminal charges are pending against McGhan and the other defendants, although investigations are under way.

&#8220The information I have are the FBI and some Nevada agencies have interviewed some of the people involved,C said Denver, who was in Nevada this week with fellow attorney Robert L. Brace for a hearing on the case.

Attempts to reach Denver and Brace in Nevada for comments on the hearing were unsuccessful.

Calls to the Nevada Secretary of State/s Office also were not returned by press time.

But the Pacific Coast Business Times, without naming sources, reported the Nevada Secretary of State/s Office was proceeding with a criminal search warrant on SWX and had issued a cease-and-desist order to four principals of the company.

Among the other companies listed as defendants in the suit are five registered in Delaware, including Medicor Ltd., a medical device company based in Las Vegas that once had an office in Santa Barbara and was controlled by McGhan.

The companies have no listed phone numbers, some have no employees and all share the same address or building as Medicor in Las Vegas.

Mike Hodgson can be reached at 739-2221 or mhodgson@ santamariatimes.com.