Pacific Holt Figure’s Past Raises Questions

By Tammy Gray-Searles
   Who is Tom Nevis?
   That is the question posed by a blogger whose Sept. 24 post was forwarded by a California citizen to the Holbrook Tribune-News. The blogger was questioning Nevis’ role in a number of land transactions in California.
   In Holbrook, Nevis is known as the driving force behind Pacific Holt Corporation, a development company that has been purchasing large tracts of land in and around Holbrook.
   In the court system, Nevis is known as a man convicted of 24 counts of bank fraud and held liable in a civil suit for $36 million to be paid to the Federal Deposit Insurance Corporation (FDIC). In various court documents, Nevis is referred to as Thomas Edward Nevis, Thomas A. Nevis and even Thomas Acves. He was also subject to a permanent injunction prohibiting him from “conducting business in any nominee names, from holding title to property in any name other than his own and from engaging in any scheme to defraud the FDIC from the collection of the $36 million judgment.”
   Nevis is also known in Oregon, Texas, New Mexico, Colorado and Idaho as a person involved in large land transactions that ended up in court as various criminal and civil cases.
   The Tribune-News asked Nevis to speak about his role in the various court cases, especially the crimi-nal bank fraud case, and he initially agreed. At the scheduled time of the interview, however, Nevis con-tacted the Tribune-News through City Economic Development Director A’kos Kovach and stated that all of the matters had been taken care of and were behind him. He did not provide any written documentation to verify his statement.
   Nevis was offered a second opportunity to comment or provide additional information or documents to clarify the situation prior to press time, but declined to do so.
United States of America v. Thomas Edward Nevis - Criminal Case
   In 1989, Nevis was convicted of 24 counts of bank fraud. The charges included wire fraud, making false statements, misapplying bank funds, bank fraud and making false entries.
   He was sentenced to two years in prison, followed by five years of probation, but his prison sentence was soon reduced to six months in a work release facility so that he could work to pay the $2 million in restitution to the federal government that was owed in the case.
   Nevis was supposed to pay the restitution in annual installments of $400,000 each over a five-year pe-riod, beginning in June 1993. He did not make restitution payments, other than a few $500 monthly pay-ments, and his probation was revoked in November 1995.
   On Feb. 1, 1996, Nevis was sentenced to seven years in prison as the result of his probation being re-voked, and on additional charges of conspiracy to defraud the U.S. by obstructing and impeding the Inter-nal Revenue Service (IRS) in the assessment and collection of tax, and making and subscribing a materially false tax return. In the additional charges, the government held that Nevis tried to avoid paying restitution, as well as amounts owed in a separate civil case, by hiding assets and land transactions. The court found that Nevis used various family members to conceal his holdings.
   Nevis served his sentence and was released from federal prison on May 10, 2000. According to U.S. Assistant Attorney Robert Twiss, it appears that Nevis paid “very little” of his court ordered restitution in the case.
   The criminal case was brought against Nevis following the collapse of State Federal Savings and Loan of Corvallis (Oregon). According to court documents, Nevis was involved in a complex lending scheme that ultimately caused the collapse of the S&L.
   In 1984, the Corvallis S&L foreclosed on an abandoned Air Force base in Roswell, N.M. Soon after, Nevis offered to purchase the property, if the S&L would refinance three other properties he owned.
   A court document notes, “The parties...agreed that in exchange for $16 million in loans on Nevis' prop-erties, Nevis would acquire the Roswell property from the Association for $13.5 million.”
   The problem was that the transaction could not be completed legally, because federal laws prohibit loans exceeding a certain percentage of an institution’s net worth to a single individual. A plan was appar-ently devised to funnel loan money to Nevis by having other individuals act as borrowers. “Shell” corpora-tions were formed, loans were taken out and the money was given to Nevis.
   In a Ninth Circuit Court of Appeals decision on Aug. 21, 1990, related to a co-defendant, Mitchell Brown, the plan is explained. Larry Waters was the bank president, and Brian Olsvick and Brown were nominee borrowers.
   “...State Federal was subject to a ‘loans to one borrower’ regulation, which limited the amount that could be loaned to any one person, and Nevis had reached that limit.
   “With that regulation lurking in the background, Waters, Olsvik and Nevis commenced a series of maneuvers in early 1984. That series continued through the year and on into the early part of 1985. Each of those was designed to conceal the fact that Nevis was the actual borrower of certain funds, a concealment accomplished by the use of various nominees, the use of schemes to direct proceeds from one person to another and the like. The actual facts were not reflected in the records of State Federal. To put it simply then, Nevis received funds he should not have received and did so because he, Waters and Olsvik were willing to conceal the facts from State Federal, its regulators and FSLIC.
   “In October of 1984, Brown participated in one of the transactions. He, in effect, had one of his compa-nies, Marin Federal, purchase certain property from Nevis and obtain a loan from State Federal to finance that purchase. The money went to Nevis, and Nevis retained possession of and the right to repurchase the property. Brown guaranteed the loan but Nevis agreed to pay it off.
   “...Shortly after Brown acted as a nominee for the purpose of funneling State Federal's money to Nevis, the favor was repaid. Nevis acted in the same capacity for the purpose of funneling money from First Na-tional Bank of Marin to Brown. ...application of a simple circumstantial reasoning process shows that it took no great leap of logic to divine that a kind of logrolling was going on here. Each person simply helped the other obtain money that might not otherwise have been available.
   “...The nature of the scheme was a conspiracy to place large sums of money in the hands of Nevis so that he could purchase property from State Federal and continue servicing that debt and others, thereby keeping the whole scheme afloat."
   Some other co-defendants, such as Albert Yarbrow, were paid for their role in the plan. According to court documents, Yarbrow was paid $200,000 for forming Roswell Properties Inc. (RPI) and using it to borrow money that was then forwarded to Nevis.
   That court document, dated Jan. 22, 1993, notes, “After RPI defaulted on its loan obligation to the As-sociation, the FDIC foreclosed on the Roswell property on July 20, 1987. On Sept. 7, 1987, a deficiency judgment was entered against RPI in the sum of $4,019,621.59. The deficiency judgment remains almost entirely unsatisfied.
   “...Yarbrow's conviction establishes that Yarbrow formed RPI as a corporation without assets and with no purpose other than to be nominee for Nevis on the Roswell loan, i.e., a ‘shell’ corporation. RPI was merely an alter ego for Yarbrow and Nevis, an undercapitalized sham corporation formed solely for fraudu-lent and illegal purposes.”
   Nevis filed several appeals in his criminal case, as did his co-defendants, but higher courts upheld the decisions made in the lower courts. When Nevis’ probation was revoked, he filed one appeal claiming that his failure to pay restitution was “not willful.”
   In that appeal, court documents note, “After a hearing, the district court in the Eastern District of Cali-fornia found that Nevis could have paid more restitution than he did and that his failure to pay was willful.
   “...The fact that Nevis was also supposed to pay his other creditors does not require a different result. The FDIC was Nevis’ largest creditor; he owed it approximately $36 million from various civil judgments, not just the $2 million in restitution. Even if the probation conditions did not specify that the FDIC be paid first, Nevis should have made some payment towards this debt. The district court did not, as Nevis com-plains, require that he pay all of the money he received to the FDIC. Its concern was that he gave almost nothing to the FDIC and instead used his money to prop up failing family enterprises. This behavior goes beyond what the original sentencing court contemplated when it allowed him to carry on his real estate business to earn money for restitution. As a result, we reject the claim that his failure to pay was not will-ful.”
   In a co-defendant’s appeal, the court document noted as to evidence, “Nevis, too, claims that the evi-dence will not support the verdict against him. He, too, failed to make a proper motion for acquittal. He, too, makes his claim in the face of a record which contains ample evidence to sustain a conviction. His conviction must also be upheld.”
United States of America v. Thomas E. Nevis, Goshute Corporation, NBC Leasing and South Butte Warehouse -
Civil Case
   In addition to the Oregon S&L fraud, a similar scheme was played out in a Texas Savings and Loan. The FDIC filed several civil suits and eventually was awarded $36 million, to be paid by Nevis. According to prosecutor Robert Twiss, Nevis wound up owing approximately $21.9 million in the Oregon case and $14.9 million in the Texas case. The cases were combined and filed in the U.S. District Court for the East-ern District of California in Sacramento.
   Nevis’ assets were seized, including those of his companies Goshute Corporation, NBC Leasing and South Butte Warehouse. The assets were liquidated and used to pay the FDIC, however, Nevis managed to place some of his assets into the hands of family members. Those family members included his wife, Saundra Nevis, his son, Richard Nevis, and his brother, Samuel Nevis. The assets were identified by the court as belonging to Nevis, resulting in the permanent injunction prohibiting Nevis from owning land or conducting business in any name but his own.
   According to information provided by the Arizona Corporation Commission, Saundra Nevis is listed as the president of Pacific Holt, John Gurrola as the director and James A. Miller as the statutory agent. The address given for all is on Finley Road in Mayer, Ariz. The business was incorporated on Sept. 22, 2006.
   Nevis claims that his obligations to the courts have been satisfied, but the final document filed in the case, which terminates receivership, indicates that liquidation of the companies did not satisfy the debts and that the injunction is still in place.
   The document states, “It is further ordered, that title to any assets of Goshute Corporation, NBC Leas-ing and South Butte Warehouse Inc. discovered after the termination of the receivership shall vest in the FDIC.
   “Nothing in this order shall affect or modify the permanent injunctions set out in the 1995 order.”
   The order is dated March 4, 2005.
Other Civil Cases
   Nevis is involved in a number of other civil cases, most often as a defendant. Several of those cases involve the FDIC trying to recover the $36 million judgment against Nevis.
   In one case, the FDIC sought to recover assets from Stock Petroleum Company held by Nevis and his family members. In another, the FDIC attempted to receive a finders fee owed to Nevis as part of a prop-erty transaction.
   The court documents explain the transaction: “Thomas Nevis, who had previously been associated in business deals with (Robert) Leal, approached Leal and informed him that he had located prospective buy-ers (the Smith Group) for the Barbican Farms property.
   “...Leal made a deal with Barbican Farms to purchase the property himself through Goshute Corp., a nominee and alter ego of Nevis, for $4,750,000 so that Leal could then sell the property to the Smith Group for $8,444,800. Although Leal never appeared in the chain of title, Leal ultimately had the Smith Group note and deed of trust assigned to the Leal Family Trust as payee on the Smith note. In brief, after a ‘wash’ down payment scenario, Leal held a note of much greater value than the note held by Barbican Farms.
   “Leal promised Nevis a ‘finders fee’ in the amount of $750,000 for Nevis supplying the Smith Group buyers, and for Nevis’ help in structuring the transactions. The finders fee was to be split--one half to a principal of the Smith Group, and one half to Nevis, structured as a benefit to Nevis’ son Richard.”
   The FDIC also fought a long and complex battle to recover property held by Nevis in Eagle County, Colorado. The case went all the way to the Supreme Court of Colorado in June 2003. A chain of transac-tions clouded the issue as to who owned the shares of the company and what time limits applied in the case.
   As to Nevis, the court documents explain, “In 1983, Battle Mountain Corporation (BMC), through its sole shareholder Thomas Nevis, signed a promissory note secured by a deed of trust on the property. The FDIC eventually became the holder of the note. The FDIC sued for default on the note in 1990 and ob-tained a judgment in California for $7,485,907.
   “...In 1993, the FDIC assigned the judgment and deed of trust to Mortgage Investment Corporation (MIC).
   “...In 1994, Nevis allegedly sold the ‘corpus’ of BMC to Jeff Tucker. Tucker claimed that his lawyer sent a check for $1,000 and a letter to Nevis offering to purchase the ‘corpus’ of BMC. Tucker further claimed he became the sole shareholder of BMC when Nevis cashed the check. Tucker admitted, however, that he never received the BMC stock certificates, and he failed to produce any of BMC's records... At the time of Tucker’s alleged purchase, BMC was not in good standing with the secretary of state and the corpo-rate name was no longer available. Consequently, Tucker changed BMC’s name to Anglo American Con-solidated Corporation.
   “In 1995, Nevis entered into a transaction with (Glenn) Miller in which Nevis sold all of his BMC shares to Miller and conveyed the property to him by quit claim deed. Miller filed for bankruptcy in 1996. His assets included the BMC stock and property.”
   It is not clear in the court documents whether the FDIC actually ever recovered any money from Nevis’ Battle Mountain Corporation.
   Another suit against Nevis includes an action brought by Fidelity New York (formerly known as Fidel-ity Savings and Loan Association). The documents in that case note, “Thomas and Samuel Nevis are broth-ers who each own fifty percent of the stock in Doe Valley Inc. Doe Valley Inc. entered a joint venture, Country River Ltd., to develop real property in Elko, Nevada. Country River Ltd. obtained loans, and Thomas Nevis signed as guarantor of the loans for himself and as attorney-in-fact for Samuel, Saundra and Melinda Nevis. Saundra and Melinda Nevis are the wives of Thomas and Samuel, respectively. Fidelity New York unknowingly disbursed loan proceeds for work that was incomplete and for improvements that were not properly constructed. When the project was ‘funded out,’ it was incomplete, and the loans went into default.”
Holbrook and Pacific Holt
   With Pacific Holt, Nevis titles himself “acquisitions,” however, former City Manager David Newlin and City Economic Development Director A’kos Kovach have previously referred to him as head of Pacific Holt. Nevis has appeared at city council meetings, economic development meetings and written letters presenting himself as a top decision-maker with Pacific Holt. His wife Saundra, who is listed as the company president, has not commented at any of the council meetings or signed any of the agreement documents provided to the Tribune-News. The development agreements with the city were signed by John Gurrola, who is listed as vice president/operations manager.
   According to Gurrola, Pacific Holt owns a large tract of land in Perkins Valley on which they intend to construct approximately 300 homes, and 102 acres near the city’s heavy industrial park south of town. The company also owns about 400 acres known as the old Finley property, located south of East Hermosa Drive, near the former Northland Pioneer College (NPC) campus.
   Pacific Holt purchased the Finley property from the city in September for $1,250 per acre. The price was $250 per acre more than the highest previous offer, and at the time, the city did not have any other offers for the property. The city has first right of refusal to purchase the land if after 10 years, Pacific Holt has not “substantially developed” it.
   As part of two separate development agreements, the city has agreed to create a community facilities district that will reimburse Pacific Holt for the cost of installing infrastructure, such as roads, water and sewer lines on the Finley property.
   The agreement titled “Development Agreement for the Construction of Public Improvements” states, “Upon demand of city and/or the community facilities district, developer shall advance cash deposits to pay for the public improvements, appraisal and project engineering services, plus any other sums required by the project. Developer shall also pay all design, engineering and other project related fees and costs, all of which may be subject to reimbursement from the proceeds of any bonds approved by city and/or the community facilities district.”
   An agreement titled “Infrastructure Financing Development Agreement” states, “Developer will, from time to time, purchase from city and others the property above described (Finley property) subject to city creating a community facilities district to install, or create a community facilities district which will provide reimbursement to the developer for the cost of installing, public infrastructure acceptable to the city, including, but not limited to, roads and utilities.”
   Pacific Holt has agreed to pay for the cost of all “legal and financing consultant expenses” for creating the community facilities district.
   Gurrola has told the city council that Pacific Holt plans to develop the Finley property for both housing and commercial use. The northern portion of the property has been designated as commercial, the center for multi-family housing and the southern portion for single-family housing.
   In Perkins Valley, Pacific Holt has been working on a residential development that company officials have indicated will include approximately 300 single-family homes. The Navajo County Planning and Zon-ing Commission approved a zone change and master development site plan application for the project in October 2006. Approval for the tentative plat was given by the commission in July of this year.
   Gurrola recently explained that there still is no timetable for construction to begin on infrastructure at the site. He noted that he has been working with the Arizona Department of Transportation (ADOT) to se-cure the necessary right-of-way access to run water and sewer lines to the property. According to Gurrola, he is also working with the city to get a water connection from Buffalo Street and 13th Avenue made avail-able.
   City officials and Gurrola have indicated that they anticipate annexation of the Perkins Valley property once homes are constructed.
   Currently, Pacific Holt is negotiating with the city to purchase approximately 440 acres in the heavy industrial park located along Highway 77, across from the Navajo County Complex. The city council is expected to vote on an ordinance authorizing the sale on Nov. 13. Pacific Holt submitted a letter of intent to purchase the property in January, offering $6,000 per acre. An appraisal dated May 31, 2007, values the property at $420,000, or approximately $955 per acre. The high purchase price would likely raise the value of the other tracts of land in the Holbrook area.
   Holbrook has had problems with rapidly inflated land values in the past. In the early 1970s, American Savings Life was duped into financing infrastructure improvements for subdivisions in the Sun Valley area whose value had been artificially inflated as part of an elaborate scheme by Ned Warren Sr., who has been referred to as the “godfather” of Arizona land fraud. Warren purchased the Sun Valley land, then had friends purchase several similar tracts of land at much higher prices, artificially inflating their value. Once Warren obtained the loan money based on the artificial values, he walked away. American Savings Life wound up foreclosing on land that was valued at much less than the loan amount. The majority of the property involved in that scheme remains vacant.
Other Projects
   Pacific Holt has purchased large tracts of land in many other areas, and has proposed numerous housing developments.
   In June 2003, the company received approval to subdivide 68 acres in Stockton, Calif., for the purpose of building 248 homes.
   In November 2003, Pacific Holt received approval of a tentative plan to build 25 single-family homes in North Las Vegas.
   In the City of Merced, Calif., Pacific Holt took out building permits for two homes in March 2004 and for a triplex in December 2004.
   In December 2006, the firm applied in Lassen County, Calif., to subdivide a 120-acre property into 10-acre parcels suitable to construct homes, and in September 2007, Pacific Holt purchased 36 acres in Porterville, Calif., that is listed as having “approved tentative map, 120 paper lots.”
   In Barstow, Calif., the firm has an agreement to build 301 single-family homes within 10 years at a rate of 30 homes per year. That project, known as the Soap Mine Road development, has caused controversy due to Pacific Holt’s plan to install septic tanks in an area with high water levels. The agreement with the City of Barstow was first signed in January 2006, and was revised in September 2007 to extend the dead-lines.
   According to Dun and Bradstreet, Pacific Holt was incorporated in California in 2000, and has 18 employees and estimated annual sales of $7 million.