The Siena TIC investors are a group of 28 people who collectively spent millions on the purchase of a commercial real estate property in Henderson, Nev. Unfortunately, this deal went sour when we became the victims of a large-scale Ponzi scheme. We believe key information about the transaction was omitted by entities involved in the deal, and we filed suit in Nevada’s Clark County District Court for damages and jury demand against Wells Fargo, Stewart Title Company and Holland & Hart LLP. The complaint alleges a number of improprieties, including aiding and abetting fraud, legal malpractice and breach of contract.
The complaint stems from our purchase of two Henderson buildings within the Siena Office Park in June 2007. While we were initially eager to invest our hard-earned money in the property, we feel the transaction was flawed from the start and served little purpose other than to generate fees and other income for the entities involved in its creation. In response to what we feel were unscrupulous practices, we are seeking a judgment of more than $16 million for the recovery of the investment, plus attorneys’ fees and lost profits.
At the time of the purchase, we were unaware the property was linked to a Ponzi scheme led by Utah businessman Val Southwick and VesCor Capital Corp. The Utah Attorney General was investigating the Ponzi scheme as the Siena transaction was going through the closing process. Our complaint alleges the sponsor and the lender, Wachovia (now Wells Fargo), failed to disclose the existence of the Ponzi scheme investigation.
The Siena property was sold by ROCSEV Capital LLC, an entity held by Southwick, who was convicted of running the largest Ponzi scheme in Utah’s history. As a result of the Ponzi scheme investigation, $2.8 million of our money was seized. Recently, a U.S. District Court judge in Utah awarded us $2 million of the $2.8 million.
In an effort to help us recover our investment, we hired Breakwater Equity Partners, a San Diego company that specializes in distressed commercial real estate workouts, to restructure the debt on the property, retain and manage litigation counsel, assist in the recovery of the lost investment and other cash outlays, and oversee bankruptcy reorganization, if necessary.
We feel these large entities took advantage of us, and we will stand up for ourselves in court. Our litigation is handled by Kolesar & Leatham, a Las Vegas law firm.
This blog was designed to provide information and updates regarding the case and resources for reporters who are covering tenant-in-common disputes. We have also provided contact information and welcome hearing from other TIC investors who would like to connect with us, learn more about workout options and support our efforts.