Tuesday, Sept. 23, 2003 | 11:03 a.m.
Alleging the company has committed several violations of state rules, the state Financial Institutions Division on Monday ordered an Oct. 8 hearing for Las Vegas-based Global Express Capital Mortgage.
Global Express raises money from investors in order to make real estate loans. The hearings, the FID's complaint said, could result in fines against the company or the loss of the company's mortgage license.
In a 22-page Notice of Fair Hearing, the FID outlined alleged violations surrounding a $3.8 million investor-funded loan the company made in 2000 for the purchase of an office building called Corporate Park at 120 Corporate Park Circle in Henderson.
Charles Clawson, an attorney representing Global Express, disputed the allegations.
"The FID began harassing Global during its 2002 annual examination and this hearing is the latest example of the FID's arbitrary and capricious modus operandi," Clawson said in a statement, adding that the allegations in the notice are "without merit."
He said the FID audited the Corporate Park loan twice before it was able to "invent allegations." Clawson also accused an FID examiner of impersonating an investor in efforts to obtain negative information.
"Whether or not the allegations are cleared through the administrative hearing, Global looks forward to pursuing its judicial options in order to clear it name," he said.
The hearing notice stems from investigations that were initiated when the FID took possession of Global Express on June 13.
The 60-day conservatorship, which ended by statute in August, was based on a series of loans that that went bad when three builders defaulted, Global Express President Connie Farris said in June. Those loans totaled about $20 million and involved about 400 investors, she said.
In its June order, the state said Global Express was operating in a manner that "may result in danger to the public."
Amanda Getzoff, a spokeswoman for the state Department of Business and Industry, said the new hearing notice does not preclude additional complaints from being added.
In Monday's notice, the FID alleges that Global Express published an unauthorized advertisement seeking investors in the Corporate Park project. FID also claims that the advertisement stated a 66 percent loan-to-value ratio in the project, implying a $5.8 million project value.
A month after the advertisement was published, FID said a recorded declaration of value on the Corporate Park property was listed at $2.6 million, creating a $3.2 million disparity. Those facts gave rise to a series of violations, the FID's hearing notice said.
"Such a misrepresentation, if known or should have been known by the exercise of reasonable diligence, is a material misrepresentation in violation of (state statute), is grossly negligent or incompetent in violation of (state statute) and is conduct constituting a deceitful, fraudulent or dishonest business practice in violation of (state statute)," the FID notice said.
The notice also alleges that a $40,000-a-month lease Global Express claimed was in place at the property could not be proved, based on a failure by the lender to produce a copy of the lease.
The notice also alleges that Global Express, in a letter to an investor, indicated that rents would be collected and disbursements would be made to investors until the loan was paid off. The FID alleges that between August 19, 2002, and August 14, 2003, Global failed to disburse rents and failed to provide an accounting to investors.
FID also claims a subsequent letter to an investor contradicts the first letter, and that a letter from a Corporate Park tenant indicates that it never paid rent to the Global borrower, Ed Perusse, or Global Express Capital Mortgage.
FID also alleges that Global Express based part of the loan value on personal property in violation of state statutes. FID also claims that the listed value of the property -- computer equipment -- was based on replacement value, not an appraised value.
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