Heat turned up on alleged Ponzi schemer

SAM MORRIS / LAS VEGAS SUN FILE

Luis Rojas is one of several hundred people hit hard financially when well-known Pahrump developer Hans Seibt filed for bankruptcy. Rojas lost $52,000 in investments with Seibt.

By Jeff German

Tuesday, Aug. 4, 2009 | 2 a.m.

Hundreds of senior citizens have moved a step closer to getting back at least a portion of life savings they invested with bankrupt Pahrump developer Hans Seibt.

Lawyers for both the federal government and the trustee overseeing Seibt’s $70 million bankruptcy case filed separate complaints Friday seeking to prevent Seibt from discharging his debts. Both complaints accused Seibt of defrauding his investors through an illegal Ponzi scheme that collapsed in the declining real estate market.

The FBI recently stepped up its criminal fraud investigation of Seibt, who has been selling land in Pahrump and offering other financial services over the past two decades.

Bill Holland, a Bankruptcy Court investigator, said he gave FBI agents several Seibt case documents they requested, including transcripts of Seibt’s lengthy deposition taken last month. Seibt answered questions under oath without a lawyer on July 7 and July 14. His lawyer withdrew from the case before the deposition.

FBI spokesman Dave Staretz refused to confirm or deny whether the investigation has intensified, but a source close to the Chapter 7 proceedings said several FBI agents are investigating Seibt.

Whether the Pahrump developer loses his bankruptcy protection will be decided at a trial. If he does lose it, his creditors will be allowed to file suit against him to recover not only their losses, but also damages.

In the meantime, Lenard Schwartzer, the trustee overseeing Seibt’s case in U.S. Bankruptcy Court, is trying to gather whatever assets are left from Seibt’s businesses, including his lead investment companies, which also filed for bankruptcy protection.

The latest developments sounded encouraging to several of the senior citizens who invested heavily with Seibt.

“I’m hoping something positive is going to happen,” said Ursula Rollins, a 73-year-old widow who lost $345,000. “I’d like to get something back.”

Nessie Keller, who invested $353,000 with Seibt, said she wants to see him punished.

“I’ve gotten over the big shock and the loss of my income,” the 78-year-old said. “I’m getting by. But there are people who are losing their homes to foreclosure. Those are the ones I feel badly about.”

Luis Rojas, a 68-year-old former waiter, said he’s hoping to get back at least some of the $52,000 he lost to Seibt.

“Anything I can get will be welcome,” Rojas said. “I’m glad they’re going after him.”

Seibt could not be reached for comment.

In their complaints, attorneys for Schwartzer and the Justice Department’s Office of the United States Trustee described Seibt’s business practices as a classic Ponzi scheme.

Seibt would transfer proceeds he received from new investors to his previous investors, falsely leaving the impression that money-making opportunities existed for all of the investors, the complaints charged.

Seibt also left his investors with the impression that his leading development companies were turning a profit, when in fact they weren’t, according to the court papers.

Both HSLV Development and Clark and Nye County Development lost money each year of their decadelong existence, the complaints said. Seibt’s most prominent development was a high-end RV park along the main highway through Pahrump that constantly required “injections of cash” from Seibt’s companies to stay afloat.

Schwartzer’s complaint alleged that in the months before Seibt filed bankruptcy in September, he shifted $8 million in new investment money out of his two main development companies to make interest payments to his earlier investors and take care of his business costs. The actions defrauded his creditors in the bankruptcy proceedings, the complaint alleged.

In all, Seibt listed nearly $70 million in liabilities and only $15.5 million in assets in his bankruptcy papers.

The complaints charged that Seibt also misled many investors into believing they were putting their money into secured first deeds of trust. At the time of Seibt’s bankruptcy filing, however, about $3.6 million worth of trust deeds had not been recorded by Seibt.

Some investors who initially held first position deeds later learned that their deeds had been relegated to second priority liens or unsecured positions, as new investors were brought into the scheme, the court papers charged.

Seibt continued soliciting investments and accepting payments up to the day he consulted with bankruptcy attorneys, the complaint said.

At the same time, the court papers charged, he was enriching himself at the expense of his investors, buying a BMW sedan and loaning himself “thousands of dollars” from one of his companies.

Ultimately, Seibt “drained” the bank accounts of both HSLV Development and Clark and Nye County Development before he filed for bankruptcy, the complaints alleged. He even took $20,000 out of the companies to pay for his bankruptcy lawyer.