Walter gets sentenced to 5 years of probation.
Kelly sentenced to 18 months in prison.
Walter gets sentenced to 5 years of probation.
Kelly sentenced to 18 months in prison.
The charging document, “the United States of America versus Walter Ng and Kelly Ng,” says they, in effect, looted the funds by making repeated cash withdrawals. The Ng’s are charged with “structuring transactions for the purpose of evading a reporting requirement;” 11 counts for Walter, 20 for Kelly. Each count carries a possible 10 years in prison and a $500,000 fine.
May they live that long to serve out their potential prison terms….
Where’s Bruce, we ask?
While many of us are beyond the age when a tax write off is helpful, it may provide solace for some. John Robie’s message to everyone who got ripped off: KEEP UP THE FIGHT. Anyone who invested in RE Loans, RE Reno, or Mortgage Fund ’08 needs each and every one of you to stay strong and keep the pressure on. Kudos to Brown and Bernard Wittenburg, amongst many others, for their efforts.
Finally, thanks to Dan Noyes for being the only reporter in the NATION who has stayed on top of this story.
RE Loans filed for bankruptcy. While this was inevitable, no doubt, it’s still a shock to the system. Despite the fact that it’s our money, our lives and our futures, the real bankrupt entity is the Ng Family Dynasty. They’re morally bankrupt. They’re ethically bankrupt. Yet they’re still out there doing business and tricking more suckers like us out of their hard-earned savings.
Maybe Led Zepplin said it best in “When the levee breaks”
If it keeps on rainin’, levee’s goin’ to break,
When The Levee Breaks I’ll have no place to stay.
Mean old levee taught me to weep and moan,
Got what it takes to make a mountain man leave his home
Equitatus posted the following a few minutes ago: Continue reading
The Siena saga is nearly over, but info keeps landing in our laps. Therefore, we present another document with the following reader comment:
3 Page Notice that all claims close 15 April, then 26 pages of creditors. Wouldn’t you love to know how much American Document Destruction is owed, and exactly what their services were? It takes some major cajones to stiff your shredding company.
Click here for the document: Creditors Doc 265
Just know that the Siena story isn’t simply history. It is a story that is constantly evolving and unfolding right before our very eyes. It is an amazingly instructive story that can only help us if we pay attention. Continue reading
On May 14, 2009 Barney Ng wrote the following to RE Reno investors:
Barney’s commitment to paying off the loan should be lauded. His follow-through, however, is laughable (so is yours, Walter – you, too, signed the personal guarantee). Barney continues… Continue reading
We’ve had a lot of action here today. Why not end the day on a positive (unless your name is Barney Ng). An obscure blogger sent the following to us today:
Walter’s letter to RE Reno investors, dated November 11, 2010, states that the sale of the Siena “has not closed as of November 15, 2010.” That’s just the beginning of the absurdity contained within Walter’s letter, found HERE.
Walter states that “it appears likely that the aggregate distribution to R.E. Reno from the sale proceeds will be in the range of $2 million to $2.5 million.” Is Walter so senile as to actually believe that RER will command over half of the sale price when companies like IGT, Konami Gaming and the various city and state agencies are all vying for the proceeds? This is just another case of half-truths and nonsensical blue sky B.S.
Rage faded to disappointment overnight, but returned with a vengeance this morning. The realization (or was it a reminder?) that the valuations provided by the NG family aren’t simply inflated, but greatly exaggerated, hit like a ton of bricks. Weissenborn and his high-priced team have been noticeably quiet. They apparently don’t have time to update us on anything, let alone the great financial loss we sustained yesterday. Arent Fox made money. Stephanie & Matthew Kelly made a few bucks. So did Innovation Capital, to the tune of $300,000 plus consulting fees of $10,000 per month. We, however, lost everything unless, of course, you believe in divine intervention.
“So tomorrow is the auction. I’m a bit of an insider and have been following the activity closely. There was only one party who conducted a thorough due diligence inspection of the Siena as far as I can tell (I read vanity plates and the contractor signs on the F-150s in the parking lot). I think the opening bid will be $1. And I have no indication that there is a back up bidder. I don’t think that RE Reno or Loans has the deep pockets anymore to enter the fray. Meaning you investors will be wiped out 100%.”
We know Konami Gaming filed another objection yesterday. We read what REreno wrote above.
WHAT DOES THIS MEAN?
Following up on the September 14th posting entitled “Siena Bankruptcy”, we stated that we were anxiously anticipating the day the Wild Game Ng / Hi-Five and/or Five-Way Development lease would be made public. That day is upon us.
There are two leases that we could find. The original lease from March 6, 2000 and the amended lease from April 14, 2000. Are we to believe that the original lease Barney signed with Barney wasn’t rich enough for Barney in hindsight (6 weeks later)?
It turns out that we were way off on the numbers from the September 14th posting. The monthly rent wasn’t $350,000 per month. It’s actually $553,333.34 and, prior to the Siena BK filing, was scheduled to balloon its way up to $774,666.67 shortly, as the lease hits its tenth year. It was scheduled to escalate to $885,333.34 in its 15th year. Anyway, the latest filing seeks to suspend these $553,333.34 monthly payments from Wild Game Ng to One South Lake, substituting $11,000 monthly payments instead. For those of us who are mathematically challenged, that’s $132,000 a year – a nice income that many of us would be thrilled to have given the state of our investment(s)…but let’s move on, shall we?
Something that initially makes no sense is the fact that the lease is by and between Wild Game Ng and Five-Way Development.
“On or about March 6, 2000, One South (as successor-in-interest to Hi-Five Enterprises, LLC and Five-Way Development) entered into a Land Lease and Hotel Casino Lease pursuant to which it leases the Property to WGN.”
If that’s the case, why is One South Lake the beneficiary? Well, on August 22, 2001, Hi-Five Enterprises Granted, Bargained, or Sold to One South Lake Street – you can find this document on the marvelous Washoe County Recorder’s website.
The BK lease document is full of good information. The following comes from Barney NG’s declaration:
“Pursuant to the Casino Lease, WGN is currently required to pay to One South
monthly rent, without deduction, setoff, prior notice, or demand, equal to an estimated $553,333.34 per month, payable in advance. This rental amount is based upon lease modification documents recently provided to the Debtors by RE Reno, which documents are inconsistent with the Debtors’ internal books and records. The Debtors’ accounting team, under my supervision and direction, is currently verifying this number and reconciling all available documents with the Debtors’ books and records. Since commencing these cases on July 21, 2010 (the “Petition Date,”), however. WGN has not made such rent payments. In connection with WGN’s usage of cash, WGN and One South have been providing R.E. Reno, LLC (“RE Reno”), One South’s secured lender, with periodic operating reports setting forth the Debtors’ net cash flow and operating results, and comparing those results to the Debtors’ operating budget previously tiled with this Court. As demonstrated both by the Debtors’ budget and by its actual operating results during the pendency of these Chapter II cases, WGN is operating on close to a “break even” basis and does not have the ability to make the lease payments called for under the Casino Lease, Furthermore, as of the Petition Date, WGN owed One South as much as $10 million or more pursuant to the Casino Lease on account of unpaid, prepetition rent. (The amount of the prepetition default under the Casino Lease is still being calculated and verified by the Debtors’ accounting staff. under my supervision and direction,). The Debtors commenced these cases primarily to obtain the breathing space afforded by the Bankruptcy Code’s automatic stay while they implement various operating improvements, locate a new operator or transactional partner for The Siena, and develop a plan of reorganization for their business. Those efforts have been ongoing, and 1 have received numerous expressions of interest that I am currently exploring.”
Anyone care to comment? There is plenty of meat in the above paragraph.
Finally, we’ll leave you with the following – does anyone care to comment on the sheer number of affiliated entities and loans and deals zinging back and forth between Walter and Barney (and Barney and Barney)? Who recognizes Gold Mountain Financial Institution? Didn’t the RE Loans Operating Agreement strictly cap the percentage of affiliated loans that could be made?
VIII. FUNDS FOR TENANT IMPROVEMENTS
Landlord shall provide construction funds for tenant improvements to the premises. Such construction funds shall not exceed $35,000,000.00 (less closing costs, attorneys’ fees, the Land Lease Portion defined below and other related costs and expenses) (the “Construction Funds”) which amount, together with $5,000,000.00 borrowed for acquisition of the premises and loan broker fees, Landlord has or shall borrow from Gold Mountain Financial Institution through two loans arranged by Bar K, Inc., a California corporation, evidenced by a promissory note in the amount of $20,000,000.00 dated June 29, 1999 secured by a first position deed of trust recorded against the premises (the “First Loan”) and evidenced by a promissory note in the amount of $20,000,000.00 dated April 17, 2000 secured by a second position deed of trust recorded against the premises (the “Second Loan”) other real property. The lien of such deeds of trust against the premises shall be senior and superior to this Lease. The disbursement of the Construction Funds shall be made in accordance with the requirements of such lender. Tenant shall have the right to approve the use of the Construction Funds. All costs of construction in excess of the Construction Funds shall be the responsibility of Tenant. The term “Hotel & Casino Lease Percentage” shall be deemed to be the percentage determined by dividing the difference between the amount that has been funded under the two loans minus $2,090,000 (which equals that portion of the $40,000,000.00 that is used to pay existing liens against the property that is secured by the deed of trust under the Second Loan that is not secured by the premises) by the amount that has been funded under the two loans. The term “Portion Funded Percentage” shall be 100% less the percentage determined by dividing that portion of the $40,000,000.00 that is not funded for construction by $40,000,000.00.
There are a few documents that we are anxious to see as the bankruptcy moves forward. The first document is the supposed lease signed in March 2000 between Wild Game Ng (Barney) and Hi-Five (Barney) where Barney is supposed to be paid approximately $350,000 per month in rent. The second document is the underlying paperwork attesting to the fact that Hi-Five (Barney) owns 25% of One South Lake (Barney).
If you’re confused, it’s quite simple. Barney will come out of this filing smelling like roses. The rest of us won’t. We’re not surprised. Are you?
The RGJ takes a superficial look at the Siena. Barney speaks, but continues to blame the Siena’s failure on the slot machines. You can read the article here: Siena Doomed To Fail?
The paper also runs a companion article. This one is kind of fun given the title on the RGJ headline about Barney: “He’s An Egomaniac”.
76 year old Joe Villareal of San Leandro put $160k into RE Reno and half a million into RE Loans. We’re not sure who Mr. Villareal is or how Ray Hagar tracked him down, but we’re thrilled to see an RE Reno investor speaking publicly about the issue.
Ron Langenbahn, 78, apparently put $600k into “Bar-K”. I wonder if that means RE Loans, Mortgage Fund ’08, RE Reno or, perhaps, some combination of the funds.
We need to push for further investigation into the deals the Bar-K people put together. We need disclosure on what the deals look like. We need to be able to follow the money, which may lead us, the investors, or some sort of government entity to action and help us recover our investment dollars.
There are a few issues that have caught the attention of Bar-K investors lately. You know what they are, right? The Olympia Brewery in Tumwater, WA and the Siena Hotel and Casino in Reno, NV.
I’ve been disappointed by the lack of media coverage on these two issues, with the exception of the Channel 4 in Reno and an obscure blog. When the local TV station and a blog upstage the local newspaper, something is wrong, especially when it comes to investigative journalism. The Reno Gazette-Journal (“RGJ”) writes a story here and there on the Siena, but, ultimately, they are just skimming the surface, which does less harm to the local economy. I get it. I really do. There are jobs at stake here. This has a profound effect on lives, relationships and families.
I’m sure rank-and-file employees are not thrilled with the the way its members have been treated. We’ve seen Channel 4 report on paychecks falling short of minimum wage requirements, on paycheck deductions for medical insurance that was going straight into the corporate coffers while letting the insurance coverage lapse and we saw one brave (former) Siena employee get fired for telling the truth. Meanwhile, the RGJ, through their silence, seems to be telling people to look the other way. Maybe they would feel differently if their company were one of the creditors – the 430 pages of creditors – listed in the bankruptcy filing.
In Tumwater, a picturesque city located 2.5 miles south of Olympia, the capitol of Washington State, there has been little coverage there, as well. The local paper, The Olympian, has run some stories, touching on the All-American Bottled Water debacle, the foreclosure and the “auction”, but they, too, have not cared enough to delve too deeply into the specifics. The AP has picked up the paragraph on the “auction”, which then ran in the Seattle Times, the Tacoma News Tribune and, strangely, the San Jose Mercury News, but that’s about it.
Meanwhile, the SEC is nowhere to be found, having only taken a cursory glance at the RE Loans issue, presumably choosing to hide behind the Exchange Agreement per a December 3, 2009 letter from Michael S. Dicke, Associate Regional Director of the SEC. No information was given as to the scope of the SEC’s investigation. Maybe Dicke and his associates are too busy surfing the net for porn to conduct a thorough investigation. We’ll have to trust they did everything they could. Tax dollars well spent, no doubt. While the SEC was browsing erotic materials online, the CA Department of Corporations chose to discontinue their investigation into wrongdoing as well.
Finally, our elected officials have let us down. From the Attorneys General of California and Nevada (and probably a dozen other states as well) to the other various local, state and federal officials elected to represent us, there’s not a single one who appears to care.
On July 15th, James Weissenborn (“Jimmy“), the Chief Restructuring Officer of RE Loans and the Managing Partner of Mackinac Partners wrote a letter to RE Loans noteholders. If you haven’t seen the letter, check out the RE Loans website (recent news section) and look under Mackinac Correspondence. Click on the link for “Message from Chief Restructuring Officer (CRO)”. Now, onto the response…
Thank you for reaching out (over a month ago). It feels good to hear from someone at the C level. Quite a title bestowed upon you. I bet Barney is pissed. He never got such a fancy title, did he? Anyway, let’s move on to the reason I’m writing you…your most recent communication with the noteholders of RE Loans. You mention in your letter of July 15, 2010 that RE Loans is “operating under a series of forbearance agreements with Wells Fargo.” You go on to state that the “note matures” at the end of July.
Today happens to be August 26th, about a month after the maturation of the note. We haven’t heard a peep from you, so should we presume all’s well with Wells Fargo Foothill (“WFF”) or should we presume the worst? Did you extend “the facility” or are you preparing to file for Chapter 11?
Inquiring minds want to know.
It’s actually pretty inconsiderate to tell everyone that the world could blow up at the end of July – if it hasn’t blown up already – and then fail to communicate at month’s end.
You also mention a business plan. It’s probably the first time RE Loans has had an actual business plan. I can only suspect that a business plan might affect us (the subordinated, former investors turned noteholders). It would be really cool to actually see the document. Given the fact that there has been very little exchange of actual information since we watched our investments disappear like a poor magic trick performed by a B level magician booked to perform at the Siena Hotel & Casino, it sure would be refreshing for someone like you to share with us just exactly WHAT is going on.
I have a few questions for you, Jimmy, as follows:
What does this statement mean?
“Provide for the significant liquidity and infrastructure we need to support these assets.”
I take it to mean you are running an operation with a monstrous overhead. Between your monthly nut, The Dishnica Group’s retainer, Walter, Kelly and the office staff salaries (Susie Parker, et al), that sounds pretty significant to me. How much are we talking here?
You go on to state that, “As details emerge, I will update you on our progress with respect to these discussions and other matters of significance.” It must be safe to assume that no details have emerged and nothing significant has happened for over a month. Am I right?
You write, “In my last two communications we discussed the critical need for liquidity.” I understand how you feel, Jimmy. I too have a critical need for liquidity. Help me out here if you could. Do you have any idea how critical liquidity is for the noteholders, many of whom have relied upon interest payments to fund their retirement?
It would be truly magical to see the asset status reports your people are putting together. What do you say, Jimmy? Feel like sharing? How about the title/lien and loan documentation papers, too, while you’re at it?
Thanks, Jimmy. I appreciate your time and your responsiveness. Thank you for your tireless pursuits on behalf of WFF, B-4 Partners and yourself the RE Loans noteholders. We’ll never forget what you’ve done for us.
Looks like our good friends at the Siena have been dipping into their employee’s paychecks, charging them for their health care benefits, but not passing the funds along to the insurance company. That’s not good, right?