Shine A Light and Bang The Drum

Think Walter’s sleeping well tonight?  How about Kelly?  Unlikely.  Here’s the link to the story by Dan Noyes and the I-Team crew at KGO:

http://abclocal.go.com/kgo/video?id=8321351

Thank you to EVERYONE who helped make this happen and those who were brave enough to appear on camera.  We have had an amazing amount of traffic to the blog today (nearly 2,000).  That means people saw the story and wanted to learn more.  THIS, friends, is our moment in time.  We need to make hay.  I propose that you send the video link to everyone you know and especially to ANY politicians you know.  Send it to the dog catcher.  Send it far and wide.  Oh, and send it to the FBI, the SEC, the Dept. of Corporations and for the hell of it send it to Tracy Green.  May that sweet woman receive 1,000 emails tonight 🙂

Good luck tomorrow to us all at court and let’s spread the word so that other outlets start picking up our story, like THIS ONE.

Here’s the text of the Noyes story:

Dan Noyes , Chief Investigative Reporter
More: Bio, E-mail, Blog, Facebook, Twitter, News Team

An investment scandal that started in the East Bay could turn out to be the largest securities fraud in California history. At stake, according to a class action lawsuit, is $750 million from about 3,000 investors.

With so much money and so many investors involved, this drama is playing out right now on several fronts with lawsuits, bankruptcies and an FBI investigation.

The 3,000 investors are feeling the impact of the scandal in many different ways.

Related Content

blog: I-Team investigates Ng investments

“It’s just outright thievery,” said investor Dr. Richard Homrighausen. “It’s such deception on such a monstrous scale.”

Homrighausen has had to scale back his plans for retirement after losing almost a million dollars.

“I have accepted that I will never get any money from this,” said Homrighausen. “I think I, at age 84, will not live to see any money come out, if any money comes out.”

Nurse Arlyss Rothman and her husband, also a doctor, now have to delay their retirement after investing seven figures; she’s uncomfortable saying exactly how much.

“And we understood they’d never lost a penny, this was repeated millions and millions of times, they’ve never lost a penny of investors’ money,” said Rothman.

And graphic artist John McGuire’s two sons have had to put off going to college. The family’s $300,000 account , which also included money for McGuire’s future medical expenses, is gone.

“They just kept taking checks,” said McGuire. “They knew this was coming down like a house of cards.”

Over the past 35 years, Walter Ng, his sons Barney and Kelly, the varsity volleyball coach at UC Berkeley, and pediatrician Bruce Horwitz ran a series of limited partnerships that made loans to developers. They told investors the properties were primarily in California.

“As it turned out, most of the holdings were out of state,” said lawyer Richard Brown who has filed a class action lawsuit against Ng and his partners. “They were very speculative, you know, the classic desert land outside of Utah or desert land in Texas or swampland in North Carolina.”

Horwitz recruited fellow doctors and his friends at the Orinda Roadrunners Club to invest. Ng worked the Sequoya Country Club in Oakland, and each year, they rented out the Silver Dragon restaurant for several nights of investor appreciation dinners. The message was always the same.

“It was safety first, safety second, safety third,” said McGuire. “You know, everything’s going great.”

And that message continued, even during the real estate slump. Ng has filed for Chapter 11 bankruptcy, and in response, Brown has filed that class action lawsuit. it accuses Ng of embezzlement, of violating federal securities laws, and of lying to investors to keep the money flowing into the latest fund, R.E. Loans.

“They set up the second fund, Mortgage Fund ’08, they began to use part of that money to pay off investors in R.E. Loans and their friends and family members, and that’s what made it a Ponzi scheme,” said Brown.

Brown says Ng and his partners took out a $50 million Wells Fargo line of credit and continued the disbursements to family and friends, and they didn’t disclose that the line of credit put the investors in a secondary position — the bank will have to be paid, before any investor sees a dime.

This is a complex case, and the I-Team has confirmed a coordinated criminal investigation is fully underway with the FBI, the SEC and the Department of Labor.

“It’s money, but the main thing is justice,” said McGuire, who is among the first investors to sue to get his money back.

Ng and Horwitz answered the complaint by saying, “At all times herein, they used their good faith business judgment in the conduct of the affairs of R.E. Loans, LLC.”

Ng got out of the trial by declaring bankruptcy. But the jury found Horwitz “failed to act as required by law” and “breached his fiduciary duties,” and awarded McGuire $150,000 in damages. He’s asking the trial judge to increase the amount at a hearing this week.

McGuire is struck by the elderly investors who’ve been watching his case so closely.

“At the trial, we had probably 10 to 12 investors. I get choked up& you would hear the stories of ‘Yeah, you know, i mortgaged my house and invested it with these people,’ ‘I took out my retirement and invested it with these people,'” he said. “They’re older and they can’t get that back.”

Late Monday, the I-Team received an email from Ng’s criminal defense attorney. It says, “He is distraught about the losses to investors. As an investor himself, Mr. Ng has also suffered losses that have caused him to file for bankruptcy. He knows that many of his investors were even more devastated, and he hopes they will be able to recover their losses through the bankruptcy proceeding and restructuring efforts.”

There is so much background on this complex case, we’re posting important links in a new I-Team Blog.

(Copyright ©2011 KGO-TV/DT. All Rights Reserved.)

Advertisements

18 thoughts on “Shine A Light and Bang The Drum

    • Over 5,200 people have visited the site in the past 48 hours. This is what they call “viral”. Thanks to Dan Noyes, Equitatus, Robert Brower, John McGuire, Dixon Collins and Richard Brown for bringing us to this point.

      Now…maybe the FBI and SEC and other governmental agencies can step up. We need you.

    • RE Loan’s line of credit is with Wells Fargo Foothill, which is NOT the same as Wells Fargo Bank. I think it’s important to make that distinction. The loan is totally above board – no impropriety at all. I also don’t think Barney Ng should be lumped in with his brother and father. Barney is an honorable man who used personal funds to pay off investors who wanted to redeem their investments.

      • “Barney is an honorable man who used personal funds to pay off investors who wanted to redeem their investments.”

        To whom did he return those investments? Certainly not to me, nor any other person I know who is likewise invested in RE Reno, LLC. True, RE Reno. LLC is owned and managed by Walter, but I have a ‘guarantee’, one which was used to induce me to invest in the Siena Hotel/Casino loan, that’s signed by BOTH of them.

        Neither will respond to, much less pay, my formal demands for the return of my investment. (Not to mention the 9% interest due for how long now?)

        I know that Barney likes to tell people that he used his “personal funds” to make interest payments but even that’s not true. Barney leased the hotel/casino to himself, from himself in so many ways that it’s hard to keep track, but the bottom line is that he took MILLIONS of dollars more out of the property than he paid in interest payments. Then, with no warning whatsoever, he quit making those interest payments and lied to us for months thereafter before we finally figured out that he wasn’t going to pay us back anything.

        Barney claims to have paid out $32 million in interest payments on the $50 million loan. Baloney! Let him prove it.

        I didn’t receive anywhere near the value of my investment in the interest payments that were made to me.

        There’s no honor whatsoever in Barney Ng.

        He may be escaping his due infamy right now because he’s obviously helping those who are currently concentrating on Walter and Bruce, but I guarantee you that before this is all said and done Barney’s villainous role will be revealed.

        • I find it curious that the tiny Ng fan club boasts the (alleged) $32 million interest paid on the $50 million loan as some sort of success. Didn’t everyone lose their principal? In simple math, that sounds like the investors are down $18 million dollars, although probably really more than that. There is lots of room at Barney’s large Orinda mansion to bury many coffee cans!

          How many millions did Walter get paid in recent years? Because I thought I read it was at least a few million a year, for many years, and yet now he’s bankrupt? How inept would somebody have to be to lose that kind of money? My neighbors cat could probably have a better track record than this investment gurus.

          Hopefully anyone thinking of handing Barney or Kelly any money in future investments googles a bit and checks out their history.

      • If he were honorable he’d use ‘personal funds to pay off ALL investors who wanted to redeem their investments.’

        I inserted a word for you, Mike. Must have been a typo.

        We hope you enjoy your preferential return. We certainly haven’t.

      • No impropriety, this WFF loan taken using investors first deeds of trust, informing victims after the fact and the NG’s taking a commission on obtaining this money. This came out at the McGuire trial. You have low standards of conduct and I don’t think you are “Mike”. There is no honor among thieves.

  1. To the administrator: thank you for managing this site. I’m one of the 3,000 and found your blog via the ABC iTeam page. Please use the WordPress menu to add an RSS Feed option so that interested parties are able to receive automatic updates.

  2. Question re: Bankruptcy Paper filing.

    Can we mail it to the Oakland courthouse or does it need to be in person?
    I would sure hope mail is sufficient. Deadline on the papers i 9/6.

    Thank you,
    Adrea

    • Equitatus posted (see above) under Proof of Claim. I am still confused if those that have filed a suit against Ng should file Proof of Claim. Also, what about class action people. Quoted from Page 3, second paragraph

      http://apps.americanbar.org/buslaw/committees/CL160000pub/newsletter/200702/anderson.pdf

      Quote below:

      A proof of claim should be filed in order to assert and preserve a creditor’s right to share
      in a distribution of the assets of the bankruptcy estate. Note, however, that, by filing a proof of
      claim, a creditor submits itself to the bankruptcy court’s jurisdiction and waives its right to a jury
      trial. In re Ha-Lo Industries, 326 B.R. 116 (Bankr. N.D. Ill. 2005) (the filing of any claim
      against the estate makes any litigation against the claimant part of the claims allowance process,
      thereby subjecting the creditor to the bankruptcy court’s equitable powers and waiving its right
      to a jury trial). If that entity is a governmental unit, it has waived its right to assert a sovereign
      immunity defense as an objection to the claim. 11 U.S.C. § 106(b).

  3. A 49 page class action complaint was filed Yoko Oshima and Arlene Dea against RE Loans, B-4 Partners, Mortgage Fund 08, Bar-K, Bruce Horwitz, Barney & Kelly Ng, Greenberg Traurig, Wells Fargo Capital Finance, Wells Fargo Foothill.

    Read the complaint here

    http://equitatus.wordpress.com/

    • Thank you Equitatus!

      This is a class action that will be prosecuted for this class of investors
      by a law firm in Phoenix. Their website is http://www.bffb.com. They are the
      attorneys who are suing Greenberg Traurig in the Radical Bunny class
      action litigation in Arizona. Equitatus has posted some of those case
      documents on his or her blog.

      The case was filed in Alameda County Superior Court on August 31st
      which might have been the last day to file a lawsuit alleging violations
      of the securities law by R.E. Loans.

      Another case was filed on Tuesday in Contra Costa County Superior Court.
      This new case has individual investors; it is not a class action.

  4. Now that you are a plaintiff in a class action, how do you
    follow your case?

    Simple. The Alameda County Superior Court scans most
    documents and posts them on a public access page. That
    page is called DomainWeb.

    The first step is to get to the Case Summary page of DomainWeb.

    Click here first:

    http://apps.alameda.courts.ca.gov/domainweb/html/index.html

    You will see several paragraphs. Find the Case Summary page
    highlight, and click there.

    You will now see a box for the case number.

    In that box type your case number: RG11593201

    No spaces, no dashes, capitalize “RG.” It must be exact or you
    cannot get to the next step.

    The next page will be the page for your case:

    “Oshima v. R.E. Loans, LLC.”

    On the left column, you will see “Register of Actions.” Click there.

    The case documents appear. There should be the Complaint, the
    Civil Cover Sheet and the Summons. There are two places to click
    on the right side of each document. I use “TIFF.”

    If everything has worked so far, when you click on the “TIFF” for the
    Complaint, 49 pages appear in a list. Click on page 1. You will see
    first scanned page.

    To get back to the list to see page 2, use your “go back” button. If you
    “close” page 1, the program will send you farther back and you will have
    to retrace your steps. So, always use you “go back” button.

    Equitatus did this 49 times, saving each page as he or she went along
    and then connected them together just for you.

    A big job and very well done.

    As documents are filed, they are scanned and you can see them.

    The next step? In a few days, the Court will assign your case to a Judge.

    Check DomainWeb every day and see which Judge wins the lottery.

  5. Thank you, Equitatus.

    I think I understand why Walter Ng isn’t named, but I have to ask ‘Why not RE Reno, LLC’? Could not filing against RE Reno (which is owned by Walter Ng) be part of why Walter isn’t named as an individual, because he’s filed bankruptcy?

    If this is correct then it’s all the more reason to file a claim in Walter’s BK for our loans in RE Reno.

    But the question remains . . . are we ‘Secured’ creditors based upon the statement re. the first deed of trust of the Siena property, or are we ‘Unsecured’ creditors because we have only the quasi, ‘feel good documents’?

    Can these quasi ‘guarantees’ be considered promissory notes for the sake of the claims?

    So many questions and so few answers . . . as time grows ever shorter.

  6. Too many questions, not enought answers.

    I don’t really know what their thinking was.

    Walter left out maybe becuase he is in BK. But the stay would only be in effect as to him, not the other defendants.

    RE Reno- Too much of a side issue. Losses for REL folks would be convered in class action. RE Reno direct investors could bring their own claims against Walter and Barney in NV or CA number may be too smaill for a class action maybe?

    Gurantees- Too complicated don’t know answer.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s