Damn Hummer owners

[PARAGON]

Man accused in series of fraud schemes across country
By TIM MCGLONE, The Virginian-Pilot
? July 9, 2006
Last updated: 12:46 AM


In 2004, Franklin E. Hall was looking to retire from the wood pallet business he started in Smithfield.
He put Hallwood Enterprises up for sale and was approached by a man who Hall says identified himself as Thomas J. Alvin, president of Aspen Investment Fund, a Colorado company that, on paper, showed a net worth of $23.2 million.
A series of transactions followed that almost left Hall bankrupt and landed Alvin, who se true identity is James Robert Nance, in jail facing a federal indictment.
Nance, 39, is accused in a series of what the FBI calls "bust-out schemes," in which companies are purchased with small down payments and large loans and then looted.
The government contends that, between 2000 and 2005, Nance and his co-defendants fleeced $2.3 million from seven companies across the country, wiring the money to banks in the Caribbean and South America. The government says the losses are much higher when ruined businesses and lost jobs are included.
Nance is fighting the charges. His Norfolk attorney, Andrew Sacks , argues that Nance simply made some bad business decisions and that some of the blame for the failed companies should lie with the people who sold them.
"The contention of Mr. Nance is that these were legitimate, arm's-length business deals," Sacks said in an interview Friday.
The FBI said bust-out schemes have become more common in recent years. Recent prosecutions in Dallas, Los Angeles and New Jersey resulted in prison terms ranging from 25 to 40 months.
At a bond hearing for Nance last week, FBI agent Christopher O'Donnell explained how a bust-out scheme works. Buyers "cloak themselves in an air of legitimacy," he testified, and then "embezzle as much as they can."
O'Donnell said Nance typically targeted companies that were in financial trouble or companies with owners who wished to retire.
In each case, Nance and the co-defendants submitted phony loan documents from fictitious finance companies to complete the sale, the indictment says.
After taking control, they would purchase equipment on credit and then sell the inventory and drain the company bank accounts, the court record says.
The money would be wired to banks in Texas, St. Kitts, Panama and Brazil, the court record says. During part of the period from 2000 to 2005, Nance was living in Sao Paulo, Brazil, in a large house with a butler and a gardener, according to court testimony.
In the sale of Hallwood Enterprises, Nance, using the alias Thomas J. Alvin, agreed in 2004 to purchase the business for $1.7 million, the indictment says.
He signed promissory notes agreeing to pay the owner, Hall, $32,000 in cash and the rest in monthly installments, the court papers say.
Hall never received any money from Nance, the court record says. Instead, $125,000 from Hallwood's accounts were transferred to a bank in Panama and another bank. Nance abandoned Hallwood in July 2004, the records say.
Eight months later, he targeted a Denver company in a similar scheme, the indictment says.
Hall, who did not return calls for comment, and his family continue to run Hallwood Enterprises, according to state and federal records.
The indictment, filed June 29 in Norfolk's federal court, charges six counts, including racketeering, bank and wire fraud and passing counterfeit securities.
Three co-defendants, Steven Nadroski, his brother Donald Nadroski and Marisa Ponder, are also charged. Ponder is the only one who has not yet been arrested.
Steven Nadroski is scheduled to plead guilty Monday and is expected to testify against Nance. The racketeering charge alone carries a penalty of as long as 20 years in prison.
At last week's bond hearing, Nance was portrayed by family members and his attorney as a caring individual who spent 11 days helping in the aftermath of Hurricane Rita last year.
Nance's uncle William Van Croft, who owns a seafood restaurant in Vidor, Texas, near the Gulf Coast, said he and his nephew slept in a van those 11 days while they fed the emergency crews in 16-hour shifts.
The exchange between Croft and the prosecutor, Assistant U.S. Attorney Michael R. Gill, grew testy when Gill asked Croft if he knew of Nance's business dealings, a $20,000-a-month condominium in Aspen, Colo., or Nance's frequent international trips. Croft said he knew none of that.
Gill asked if Croft ever noticed Nance dressing sharp and driving a large sport utility vehicle.

"I dress nice and I drive a Hummer," Croft answered, adding that didn't make him a criminal.

Sacks grew frustrated by the line of questioning, frequently objecting and being overruled by District Judge Raymond A. Jackson.
"I don't think the court should view this man as Frankenstein," Sacks argued. "It sounds like a Humphrey Bogart movie."
Nance was ordered jailed pending trial. No date has been set.
Nance had argued that he was needed at his parents' home in Texas, where his father is dying of cancer. The judge and prosecutors said they were concerned that Nance continues to hold money in a Panama bank.
The government has recovered an undisclosed sum from Nance's other accounts.
Sacks said Friday that the government has presented "a very one-sided situation." He said the business sellers should bear some responsibility.
"When these deals went sour, it's not totally because of the misjudgment on the part of the buyer but lapses on the part of the seller," he said.
"I'm having trouble with the government's contention that he wrecked these businesses and wrecked these lives. "
Sacks added that it was Nance's prerogative to liquidate the businesses he purchased.
Nance also faces a $2 million civil action in Denver over his purchase of one of the companies named in the indictment.
He is accused in that case of looting an undisclosed sum from the business.


Reach Tim McGlone at (757)446-2343 or tim.mcglone@pilotonline.com.

[DennisAJC]

He's gonna be somebody's beotch.

[PARAGON]

DOJ news release

[blindzebra]

I hear they hand out icy hot instead of vasoline to the inmates when a guy like that comes in

[Adam in CO]

Damn Colorado people.