Wednesday, June 16, 2010
Builders Facing Fraud Charges
By Michael G. Murphy
Copyright © 2010 Albuquerque Journal
Journal Business Editor
A federal grand jury has indicted longtime Downtown Albuquerque businessman and developer Vincent Garcia, his son David Garcia and business partner Derek Barnhill on more than a dozen counts of bank fraud and money laundering totaling about $2.45 million.
The indictment alleges the defendants took draws on loans from First Financial Credit Union in Albuquerque and Columbian Bank and Trust of Kansas and instead of using the money for building projects spent it on items such as a private residence for David Garcia and an interest in a casino for Vince Garcia.
Attorneys for the Garcias said charges in the indictment filed in federal court in Albuquerque would be contested.
Vince Garcia was the public face on construction of the $9 million Anasazi Downtown — a nine-story condominium project at the southeast corner of Sixth and Central.
Work was stopped several months after federal regulators seized the Kansas-based bank that was financing it.
Vince Garcia told the Journal at the time, "The only way I can explain it is the banking and financial crisis has hit home. It's an amazing personal experience for us here."
The 90,000-square-foot Anasazi building was to have commercial space on the first floor, a parking structure and 45 residential condos on the upper floors.
Lockhaven Estates LLC and Copper Square Condominiums list the same physical address as Anasazi, according to state incorporation filings.
None of the projects was ever finished.
The Federal Deposit Insurance Corp. in August of 2009 seized the project's main lender, Columbian Bank and Trust Co. of Topeka, the same institution named in the indictment. That bank is no longer in business.
Construction continued until Oct. 6, when about 150 workers with another Garcia company, Blue Dot Corp., and its subcontractors were laid off.
Garcia said he was "optimistic" that he would find a new lender to get the project going again.
Blue Dot last year attracted attention by posting tentative plans on its website about potential construction of a pair of 30-story condo towers at the west end of Downtown.
"If we build it, it will undoubtedly become 'the address' in all of New Mexico," Garcia told the Journal.
The indictment alleges phony expenses were submitted on the three projects — Anasazi Downtown, Copper Square Condominium and Lockhaven Estates LLC developments — "by means of false and fraudulent pretenses, representations and promises," according to court documents.
It said the trio of defendants illegally obtained hundreds of thousands of dollars and spent the money "on such unrelated projects as the construction of a private residence for defendant David Garcia, or the purchase of an ownership interest in a gambling casino by defendant Vincent J. Garcia."
Nineteen specific instances of the defendants illegally obtaining money adding up to $2.45 million are listed in the indictment. They include two such transactions of $174,453 and $167,717 submitted in connection with Copper Square Condominium LLC "fraudulently incorporating expenditures on David Garcia's personal residence."
Vincent Garcia also specifically used cashier's checks for almost $500,000 to purchase an interest in something called J&J Casino, according to court documents.
Amy Sirignano, attorney for David Garcia, told the Journal her client is "looking forward to receiving the documents that support the government's case, and to a prompt and positive resolution of the matter." Jason Bowles, who represents Vincent J. Garcia, called the charges "disappointing."
"At all times he was acting with no criminal intent. He was trying to protect the bank and its assets. ...We're going to contest these charges, and the bank is going to have a lot to answer to," he said.
Journal staff writers Scott Sandlin and Rivkela Brodsky contributed to this report