Friday, Feb. 14, 2003 | 9:54 a.m.
Seven years ago Dan Grey began lugging boxes of paperwork around and telling whomever would listen that he was one of the victims in a multimillion-dollar mortgage scandal.
On Thursday, a federal jury found former Assemblyman Harley L. Harmon guilty of 34 counts of mail fraud in connection with the scandal.
The ruling ended what Grey said were a lot of sleepless nights for him.
"I feel sorry for the man," Grey said of Harmon. "He is a sick person who continually lied to investors.
"I personally won't get any satisfaction if he goes to jail, but I think it has to be done to make an example so others will think twice about doing this."
I personally won't get any satisfaction if he goes to jail, but I think it has to be done to make an example so others will think twice about doing this."
Harmon, 55, faces up to five years in prison on each count -- a potential sentence of 170 years. He could also be fined when he is sentenced before U.S. District Judge Philip Pro on May 2. He could be fined up to $8.5 million, a maximum of $250,000 on each count.
Lt. Steve Franks, head of the Metro Police fraud unit, said that it was a long road to the conviction.
"I think all the victims were going to different places and no one really wanted to listen to them at first," Franks said. "This was actually an instance where federal law enforcement and local law enforcement worked together."
Franks said two detectives from his bureau were assigned to the Harmon case for 18 months, and the FBI was also investigating.
Harmon was tried on 34 counts of mail fraud after the joint investigation into the operations of the now-defunct Harley L. Harmon mortgage company. He had been indicted in April 2001 on 71 counts, but most were dropped because some witnesses were unavailable.
At issue was millions of dollars of investors' money lost through Harmon's mortgage company in loans made to developers of two housing projects, a mobile home park and a storage center, between 1994 and December 1997. The Harley L. Harmon Mortgage Co., which operated at 1108 S. Eighth St., was handling 44 separate loans involving $23.9 million from 694 investors when the Nevada Financial Institutions Division stripped the company of its license in December 1997.
At a hearing scheduled for a week from today, Pro will determine how much, if any, money Harmon will be ordered to forfeit as part of his sentence.
Harmon's attorney, Frank Cremen, waived the right to have the jury decide the forfeiture issue, and the details could be stipulated to by the parties or hammered out in front of Pro next week.
Kaye Ellsworth, 54, owner of a charter fishing boat company in Hawaii, said his family invested about $320,000 with Harmon and lost about half of it.
"We would look forward to having the money returned to us, and to all the people who lost part of their investments," Ellsworth said.
Cremen said that he would "take all appropriate measures" for his client and that would likely mean an appeal.
Members of the jury of eight women and four men declined to comment on the trial, with one man saying only that "it was a tough trial, but we all ended up coming to the same decision."
The jury deliberated for more than 13 hours over three days. Assistant U.S. Attorney Dan Schiess said he expected the deliberations to be lengthy because of the complexity of the case.
"There were voluminous amounts of documents for the jury to make its way through," Schiess said. "I think we had a very conscientious jury that paid attention to the details."
Schiess said the biggest challenge he had was to simplify the case and show that Harmon dealt dishonestly with investors. During the trial Schiess explained that investors thought they were in safer first deeds of trust when they were actually in second, third and even worse positions on loans brokered by Harmon's mortgage company.
Money was also diverted from the projects in which investors were involved to projects that were on the brink of foreclosure. Interest payments and reports mailed to investors kept them in the dark about what Harmon was doing, Schiess said.
Harmon, who served as speaker pro tem of the Assembly in 1977 and as its majority leader in 1979, has a political lineage that extends back to his grandfather, Harley A. Harmon, a former chairman of the Nevada Public Service Commission. Harmon's father, Harley E. Harmon, served in the Assembly and on the Clark County Commission.
After Harmon was stripped of his license in 1997 the Sun reported that many investors had given him money without knowing that he was under state investigation. That and other revelations reported by the Sun led the Nevada Legislature in 1999 to revise state mortgage broker laws aimed at giving investors more protection from potentially unscrupulous companies.
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