Friday, Sept. 3, 2004 | 9:06 a.m.
BLOOMBERG NEWS
A Palm Springs real estate developer will pay $40,000 to settle federal allegations he defrauded investors who had purchased $12.75 million worth of municipal bonds to finance a Nevada casino.
Mark A. Temple, co-owner of Mojave Valley Resort Inc., was the developer of a casino and housing project on land owned near Laughlin by the Fort Mojave Indian Tribe. The U.S. Securities and Exchange Commission claims Temple sold $12.75 million worth of municipal bonds to help finance the project and told investors the bonds were secured by a deed of trust on Mojave's lease of the tribe's property.
In fact, the tribe and the U.S. Bureau of Indian Affairs never approved the deeds securing the bonds, the SEC said. When Temple defaulted on his lease by failing to finish the casino in 2002, Temple disclosed to investors that the bonds were not secure, according to the commission.
SEC officials said the municipal bond investors had no way of knowing whether the bonds were secured.
"Bondholders, when they purchase municipal bonds, look to the security for the bonds, and in this case there was no security," said Sheila O'Callaghan, an attorney in the SEC's San Francisco office.
Temple neither admitted nor denied the allegations as part of the settlement, the SEC said.
Karl Urland, an attorney representing Temple and Mojave Valley Resort, said his client is still in business.
"The company is making every effort to pay the investors," Urland said. "Deposits are being made to the trustee on behalf of the investors on a regular basis."
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