QMA BACK IN NEWS Residents seeking repayment of lost investments
February 25, 2011
In a story that just seems to never roll over and play dead, two events have recently taken place.
Some Altus residents are seeking repayment of funds lost in Colorado land investments. In a suit filed in Jackson County District Court, locals have accused Paul Doughty, F. Don Anderson, William R. Grissom and other defendants with various types of fraudulent business practices. Both Doughty and Anderson were original players in the Luscombe Aircraft Corporation / Quartz Mountain Aerospace debacle.
The defendants are being sued by David Braddock, chair of the Economic Development Commission, and businessman William C. Ray and physician Dr. Joe Leverett. They invested in several property development subsidiaries of the former First State Bank (FSB) Bancorp involved in Colorado property development. Some of the former FSB land developments in Colorado were: The Villages at Hayden, Lake Village, Mount Harris at the Cliffs, and Hidden Springs. Some of these developments left disappointed land holders high and dry, with partial slip-shod construction.
Doughty was former FSB President, Anderson was CFO for Luscombe Aircraft Corporation, which became Quartz Mountain Aerospace and was Executive Vice-President of Altus Ventures. Grissom was Chief Operating Officer of Altus Ventures. The various FSB subsidiaries shared officers, with most of them having Doughty as president and Anderson as vice-president. Some of those subsidiaries were: Altus Ventures, Mountain Adventure Property Investments, LLC, Grassy Creek Holding, 4-S Developing, and Oasis Development. FSB made a loan to 4-S for $9 million of which $4.8 million was dispersed before the fraud was revealed.
On Feb. 27, 2009, the Federal Reserve Board issued a cease and desist order to FSB for violating part of the Federal Reserve Act.
The new First State Bank Of Altus is a branch of Herring Bank. There is no relationship between the old FSB and the new one, according to President Larry McLaughlin. All the FSB subsidiaries were dissolved when the Herring Bank took over March 1, 2009.
Former QMA CEO Arciero violated federal law
A ruling by U.S. District Court Judge Timothy DeGiusti, stated that former Quartz Mountain Aerospace CEO Mark Arciero violated federal law but was not personally liable for not remitting almost $40,000 in employee premiums. These payments were to pay for welfare benefits.
In the suit filed by the U.S. Department of Labor against Arciero, the department alleged that Arciero "violated the Employee Retirement Income Security Act (ERISA) by failing to remit employee premiums to the plan for a period of Aug. 8, 2008 through Nov. 15, 2008..." The department asked that Arciero "repay to the plan all losses with interest, correct any transactions prohibited by law, be permanently barred from service in a fiduciary capacity to any plan governed by ERISA in the future and, if necessary, offset any claims or benefits owed to the defendant against losses by the plan."
Roger Hilburn, the regional director of Employee Benefits Security Administration in Dallas, sought to protect "The hard-earned benefits of workers" by holding Arciero responsible.
The judge said Labor Department's charges had been substantiated and ruled Arciero violated federal law by mismanaging assets. Arciero was ordered to complete 12 hours of training before Jan. 31, 2012.