But the Phoenix man tasked with raising $1.5 billion to finance the massive solar generating plant near Deming has a history of unpaid debts, tax liens and unpaid child support, court records show.
And he recently served time for forgery in a life insurance scheme.
The land office says it doesn't do background checks until deals are closer to being finalized. And office officials say there was no risk at this point: The project involves a desolate tract of land and the state isn't out any cash.
It has received a payment of $6,280 to put a hold on the property.
"If people turned out to be fly-by-night flakes, we would find out anyway and terminate the lease," said Brian Bingham, project manager for the Land Office. "The loss would be on their side."
But if the Land Office had done a background check before proclaiming a world-class project, it would have found a lengthy paper trail for the solar project's money man, J.D. Surber, 68, general manager and managing partner of a company called Solar Torx.
Solar Torx is in charge of coming up with financing to build a 575,000-square-foot solar panel manufacturing plant and a generating facility of up to 3,200 acres in southwestern New Mexico.
Solar Torx is one of two companies involved in the venture. The other, New Solar Ventures, is in charge of technical and engineering issues.
New Solar Ventures signed a lease with the State Land Office, and Land Commissioner Patrick Lyons touted the plant as a great source for non-polluting energy in the state. His office in April issued a news release titled "Land Commissioner Brings Largest Energy Plant In The World To New Mexico."
Ed Balch, director of contracts for New Solar Ventures, didn't return calls seeking comment for this story.
But he told the Journal in July that Solar Torx was working to raise financing from "Wall Street people."
Solar Torx, according to the secretary of state in Nevada, where the corporation is registered, shares the same address as Surber— a UPS mailing and copy store in Phoenix.
Surber is the sole officer of Solar Torx, according to corporation filings, and still owes hundreds of thousands of dollars in unpaid judgments brought by former business partners, his ex-wife and the Internal Revenue Service.
He has declared bankruptcy at least once and was sentenced to nine months in prison, followed by four years of probation, beginning in 1998, after pleading guilty to forgery in a case brought in an Arizona superior court.
Court records from the 1980s and 1990s include at least half a dozen unpaid judgments, most for $100,000 or more from various business dealings, and about $200,000 in unpaid child support. Surber himself in court testimony in 1998 estimated his debt at $2.59 million.
Surber, reached by phone Tuesday, said his past financial dealings wouldn't hamper efforts by Solar Torx to raise money for the solar facility.
"Most of them are all well in the past and are being resolved," he said. "I don't think ... any of that information is pertinent to the transaction down in Deming. Those situations have nothing to do with Solar Torx."
Land is on hold
New Solar Ventures has signed a lease with the state to hold some of the land and has paid about $6,280 in a check drawn on a Wells Fargo account in Arizona. In July, the group said it was experiencing delays as it awaited the results of a feasibility study.
Assistant Land Commissioner Jerry King said that the state has already had questions about the ability of Solar Torx to raise the funds but that it has not yet done a formal background check.
The current hold lease means the companies cannot do anything with the land. Before any lessee could break ground, King said, the Land Office would require financial information, including bank statements, as well as bonds. It requires the same of its 18,000 other land lessees, which include multiple oil and gas interests and three wind farms.
"We've had questions all along, but that doesn't mean we won't go forward," he said. "We're not going to judge anybody, but before this goes anywhere from a holding lease, they'll have to do it the same way anybody would."
Unpaid debts
Former business associates and attorneys, in Journal interviews and in court documents, say Surber is a "promoter" who has problems paying his debts.
Phoenix attorney Claudio Iannitelli represented businessman James Christy in a 1996 lawsuit against Surber.
Iannitelli said in an interview the case resulted in a $200,000 judgment, which has been renewed several times but never paid.
"People have written to us, very upset how they lost money with Mr. Surber in one way or another," he said. "He's made zero, I mean zero, attempts to ever pay one dollar."
Ed Luke, a Phoenix real estate investor, filed suit against Surber in 1988 for about $299,000.
"He raised quite a bit of money from a couple partners and myself, and we have yet to see the return of it," he said, estimating his total loss in the deal, including court costs, at more than $325,000. The judgment, and several similar court decisions, was renewed in 1995 when Surber declared bankruptcy.
"I'll tell you what, anyone who is loaning money to him over there now has a lot to learn," Luke said in an interview. "He told us he had all this collateral, that we just needed to loan him this money. He's a good promoter type, but nothing ever follows (through)."
Internal Revenue Service filings in court records show liens totaling $125,271 in unpaid income taxes for the years between 1989 and 2003.
Surber's former wife, Mary Katherine, filed suit against him for unpaid child support twice— once the year they divorced, 1988, and again in 1990. Her attorney, Randall Kries, continues to renew the judgments, which total more than $200,000, every five years, despite never having received any of the money.
"My client tells me to do it, but she doesn't think he has anything she could go after," Kries said.
Criminal charges
In 1998, Surber pleaded guilty to forgery, a fourth-degree felony, as part of a plea bargain.
Court documents from Maricopa County Superior Court in Phoenix allege that, in 1994, Surber, acting within his capacity as a licensed insurance broker, applied for a $10 million life insurance policy on his own life from Hartford Life and Accident Insurance Company.
He named his own corporation, at the time called Walker Townsend Company Inc., as owner and beneficiary of the policy. The court alleged he directed his sister, Joy Sue Fry Roth, an employee of Walker Townsend, to write checks on the company's account to pay for the policy, despite the account not having sufficient funds. The first check, for $221,021, bounced, as did a second check.
Meanwhile, Surber had collected an insurance broker's commission of $124,166 for selling the policy to himself. Hartford Life alleged he did not return the commission even after the policy was canceled due to the bounced checks.
When interviewed by the Arizona Insurance Department about the incident, he said that he knew the bank account had insufficient funds but that "he was expecting a large business transaction to be completed which would have enabled him to pay the premium," according to court records.
Surber and his sister were each charged with two counts of forgery and one count of theft. Surber's sister was later dismissed from the case as an innocent party to fraud, and Surber later pleaded to a single count of forgery. The court found no prior felony convictions for Surber.
Patricia Wildermuth, then of the Arizona Attorney General's Office, recommended in court documents that Surber serve a year in jail and indicated that "the defendant had been involved in shady business dealings in the past."
Sandy Yaffi, of the Arizona State Department of Insurance Fraud, said in court documents that her office was very familiar with Surber and that he "makes a habit of living off other people, defrauding them of money and never repaying them. This includes his sister."
When he applied for early work release from jail, his probation officer, Joann Roskoski, wrote that she was opposed to work release for fear "he would return to running his own business, and possibly victimizing others."
N.M. solar plant
New Solar officials have not detailed the specific technology they plan to use in the New Mexico project but say they have purchased patents for solar panel devices that could produce energy at 8 cents to 10 cents per kilowatt-hour. Industry averages for photovoltaic power run between 15 cents and 25 cents per kilowatt-hour.
The group says its plant will have a 300-megawatt solar generating capacity— enough to power thousands of homes during daylight hours. That would make the project the world's largest solar generation facility.
In July, Balch said that an early round of investment for the project had fallen through but that Solar Torx was continuing to meet with what he called "Wall Street people."
"We're talking Goldman Sachs-type people," he told the Journal.
Surber said Tuesday that Solar Torx is involved in other energy-related deals but that he could not detail them.
"We are involved in the field on a reasonable broad base, but we haven't yet completed any other situations," he said.
Journal staff writer Rosalie Rayburn contributed to this story. Victims of Investment Scam
J.D. Surber was tied more recently to a high-profile scam that put Jeanette Wilcher of Scottsdale, Ariz., in prison.
In this case, another Surber company and its client ended up as victims.
According to the U.S. Attorney's Office in Arizona, a real estate investment firm run by Surber and a partner received $3.3 million from a California retiree to invest.
The investment firm, Sansea, sent the money to Wilcher, who had said she had a high-yield investment program that involved investing in foreign currency.
Wilcher made a few payments to Sansea, which, according to the U.S. attorney, made some payments to the victim.
But federal prosecutors said Wilcher never invested the money. She used it to buy a house and other items.
Prosecutors said the payments the victim received, via Sansea, came out of her original investment— in other words, she was repaid with some of her own money.
Wilcher was accused of using a nonprofit foundation, Life Foundation Trust, as a money-laundering device. Life Foundation Trust purported to help the needy with food and other assistance.
Sansea said it was innocent of any wrongdoing and in 2001 agreed to a stipulated judgment that it owed the California woman just less than $300,000.
As part of the deal with the U.S. Attorney's Office, Sansea officials agreed to testify against Wilcher, who was found guilty of federal money laundering charges in April. She is in prison awaiting a mid-September sentencing.
Michael Anthony, an attorney for the victim, said there was no indication that Sansea and Surber were aware of Wilcher's scam.
Anthony said Surber and his partner "appeared to be ... as offended by this whole thing as we were," he said. "We did some research, and it appeared they were a successful real estate company."
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