Some days I work too hard.
Pat Powers likes to use false information from Chad Haber to insinuate that I've broken the law. That's a cute attempt by the Powers-Rounds-Wadhams camp to distract from the real legal troubles of a doomed primary candidate who can help Rounds by taking a small but crucial margin-of-error percentage of voters away from any real conservative challenger.
You asked for insinuation? Channeling Hans Gruber, I give you the F.B.I., explaining a multi-million-dollar mortgage fraud scheme that sent six people to prison:
Between July 2006 through December 2007, [Raymond Paul] Morris, [Michael] Hurd, and [Deborah L.] Joyce profited from illegally “flipping” existing homes in the Stonegate subdivision to out-of-state borrowers at falsely inflated sales prices. During this time, Morris served as a leader of “100X,” organized in Salt Lake City, Utah, which was a group of novice investors who were looking to make quick profits in the real estate boom of the mid-2000s. While searching for potential real estate deals across the country in late 2005, Morris became acquainted with Joyce, a local Putnam County real estate developer, who at the time was looking to build new single-family homes in the undeveloped lots of the Stonegate subdivision. Morris flew to West Virginia and reviewed Joyce’s plans. The two agreed before Joyce could sell new construction in the subdivision, she needed more expensive comparable home sales of existing properties to justify the asking price for her planned new construction.
Joyce approached homeowners in the subdivision and entered into sales contracts to purchase the homes at or near the current fair market value. Joyce then obtained fraudulently inflated appraisals from two local real estate appraisers, James Thornton, 48, and Mark Greenlee, 50, that essentially doubled the fair market value of the properties she had under contract. Joyce sent those appraisals to Morris, who in turn pitched the purchase of these same properties to the 100X members as a real estate investment opportunity. Morris, of course, concealed Joyce’s underlying sales agreement and the home’s true market value.
To convince the 100X members to purchase the Stonegate properties, Morris enlisted the assistance of a friend, Michael Hurd, who was operating a company called “The Gift Program” or “Advanced Capital Services” that was operated at Hurd’s home in Sandy, Utah. Hurd described The Gift Program to the 100X members as a “seller-funded down payment assistance program” used to provide home buyer’s money to make down payment and initial mortgage payments on real estate purchases. As a result, Morris was able to convince the 100X members that the investment opportunity represented little personal risk because they would not only not have to pay a down payment but receive help with initial mortgage payments that they could rely upon while the 100X member tried to turn around and flip the property again at an even higher price. In reality, The Gift Program was simply an elaborate scheme to defraud lenders by concealing the transfer of loan funds to the borrower from the lender. In essence, through the use of The Gift Program, lenders unwittingly funded their own down payment and made the initial mortgage payments. To deceive the 100X members further, Morris led them to believe he was also investing in the Stonegate project.
In total, Morris, Hurd, and Joyce convinced five 100X members to purchase five existing homes and one lot for new construction. The respective lender losses totaled almost $2 million ["U.S. Attorney Caps Multi-Million-Dollar Mortgage Fraud Investigation with Almost Five-Year Prison Sentence for Utah Ringleader," Federal Bureau of Investigation, Pittsburgh Division, 2012.11.05].
What does this house-flipping scheme have to do with Chad Haber? Quite a bit, if you take a convicted felon's word for anything:
Morris' attorney, John Carr, said that his client did not have a financial background or knowledge of the real estate industry and was only a member of the investor group, which was actually led by Chad Haber, according to court filings [Zac Taylor, "Utah Man Gets 57 Months in Fraud Scheme," Charleston (WV) Gazette), 2012.11.05].
I can't attest to Chad Haber's leadership of any illegal scheme. The U.S. Attorney R. Booth Goodwin of the Southern District of West Virginia never filed any charges against Haber. The Chad Haber fingered by stripey Morris could even be a different Chad Haber from the husband of Senate candidate Annette Bosworth-Haber (about whose shifting last name Pat Powers has yet to mewl the way he did about Matt McGovern's).
But a Chad Haber was the registered agent of 100X. Official Utah state documents list Chad Haber as the president and director of 100X. That Chad Haber registered that company on the same day (June 4, 2004) and from the same address (2486 S. Scenic Drive, Salt Lake City, Utah 84109) as he registered Prescott & Walker, Inc., a company that shares the names of our Chad Haber's two oldest sons (but not the names of any Presidents, contrary to Chad Haber's odd assertion). (Also registered briefly by Chad Haber in 2005 at this address: Rancho Veredas PRWA, LLC. How many corporations does one guy need?)
To be clear, Chad and Annette lived in Utah until 2007 or so. Annette did her internship and residency at the University of Utah School of Medicine and held a Utah medical license through 2007. Various online resources put Chad and Annette Bosworth-Haber's address at 2486 (S) Scenic Drive. The chances of a whole nother Chad Haber marrying a whole nother Annette Bosworth and living in Utah at the same time seem small.
So it would appear that Chad Haber, who organized and quickly abandoned the obscurely named Associated Strategic Capital in South Dakota, who runs the non-profit Preventive Health Strategies and a host of fundraising projects, whose non-profit has sold big-dollar tickets for two raffles (land in Moody County and Harley motorcycles) that, as far as I know, haven't had drawings yet, and who now plays a key role in his wife's U.S. Senate campaign (he says he keeps the campaign schedule locked in his desk), once registered and directed a Utah company that dissolved after its principals participated in an illegal real-estate Ponzi scheme.
I posit nothing more than the facts above. I have no idea of any documents locked in Chad Haber's evidently porous desk would shed any light on this strange business history. But maybe next time he sees Chad Haber, Pat Powers should follow up. If he thinks one piece of paper showing a political campaign schedule prepared and stored in a non-profit organization's office is news, he'd surely sink his teeth into multi-million-dollar real estate fraud.
Maybe KELO would like to get in on this. Anyone got Ben Dunsmoors email??
An anonymous commenter provokes clarification of the MM/PHS raffles: in April 2012, Bosworth raffled off land from her family farm near Plankinton, which will be the site of her formal Senate announcement tomorrow. Bosworth and PHS have since announced raffles of motorcycles, a snowmobile, and land in Moody County. To the best of my knowledge, no drawing has been held to award these items to ticketholders.
Pat is too lazy to do any work himself. All he does is forward press releases and spoon fed stories that serve his interests.
The Bosworth sideshow gets more entertaining every day. lol
I'm curious on the financials of the non-profit raffling off a portion of the Bosworth farm. Did the elder Bosworths gift the land to their son-in-law's non-profit as a fund raiser or did the non-profit purchase it with the intent to raffle it off. If a purchase was it at fair market value? If for less than fair market value is this an attempt to funnel money to a son-in-law and avoid IRS max gift allowances. What part of the income of the non-profit goes to the son-in-law's salary and to cover his "expenses"?
This entire thing smells like a dead mouse stuck in the A/C vent of Lexus on a hot summer day.
There are too many facts listed by you, Corey, for Pat Powers to become interested. He's seems ambivalent to anything but rumor, conjecture, and coffee-shop gossip. Gathered by his "spies." *Stay tuned.*
Nick has a good eye. The machinations here are approaching sewage ash scam proportions. These guys must have picked South Dakota for a reason.
Nick, Donald, you're not helping me see the good side here.
The Aurora County land raffle: they raffled off 160 acres. They sold 500 $1000 tickets. Anyone care to estimate the market value of 160 acres in 2012?
According to this news release from PHS, "Bosworth purchased the land just prior to 2007 when her father retired and dissolved his farming partnership with his brother." Then-PHS director Mathia Rall said the land is "adjacent to Tom Brokaw."
...hmm... in this March 1, 2012, video, Dr. Bosworth says she bought the quarter section from her aunt on the day she married her husband. On this Facebook note, Annette posts a message from her "Aunt Mitzi," who writes:
"The sale of the Grady place troubles me. It never occurred to us that you wouldn't keep the land in the family. Had we known that was possible, we would never have sold the land to Chad for his wedding gift to you.
"Preston just completed an ancestry report on the Bosworth brothers who came here from England. He found the patent filed by Harry T. Bosworth for the homestead. When he finished, he had gained an understanding of what it took to survive in the Dakotas and was very proud to have their blood in his veins. You must feel that way too, since you kept the Bosworth name. I hope you haven't lost touch with the strength, honor and history of our family. I am saddened to tears to think that you would sell it to someone outside the family.
"This must be difficult, but please reconsider the public sale.
"Your Aunt Mitzie"
So, according to that note, if the Grady place and the auctioned quarter are one and the same, the family sold it to Chad, who gifted it to Annette for their wedding.
...and in a subsequent response to Aunt Mitzi, Annette says she bought the farm land "on my wedding day nearly 13 years ago." She wrote that on April 4, 2011, so her wedding day was in 1998. That's not quite "just prior to 2007."
Why do the Bosworth-Habers keep telling stories that don't quite add up?
Accessed taxable value of land and what it could sell for are two different and often unrelated things. Here's a listing for 154 acres of Brookings/Moody county land for 1,062,531, that averages out to $6900/acre or just over double what the Bosworths want to earn from their raffle.
Things just don't add up.
I see now the Moody County raffle is for 80 acres of land, so $500,000 would be in the ballpark for what land is listed for in that county. It still begs the question, why don't you just give it to the non-profit and have the non-profit sell it?
Here's the Moody County land listing. http://www.landsofsouthdakota.com/south_dakota/land-for-sale/154-acres-in-Moody-County-South-Dakota/id/1148787
Something fishy is going on and it revolves around Bosworth's hubby, his non-profit and IRS tax rules.
SDCL: § 22-25-26. Unauthorized bingo or lottery as misdemeanor. Any person who conducts bingo or lottery in violation of § 22-25-25 is guilty of a Class 2 misdemeanor.
§ 22-25-25 http://legis.state.sd.us/statutes/DisplayStatute.aspx?Type=Statute&Statute=22-25-25
...which is in line with what Nick said. If she didn't transfer that land to a non-profit before the raffle, then she raffled it for her own gain and violated SD law.
Do we know what Haber paid his (potential) FIL for that land? Haber may have bought the land at a bargain basement price from FIL prior to becoming a family member to avoid inheritance tax, then turned around and gifted it to Annette, keeping it in the family. If FIL took "a loss" on the sale, or didn't get any more than his original basis, FIL didn't pay any cap gains.
I believe there is still an unlimited amount of property that a husband and wife can transfer to each other without triggering a gift tax.
As long as she donates the proceeds from the raffle to a non-profit, there shouldn't be any taxes on the raffle, either. Of course it's her non-profit and she, her husband and FIL scammed the system like pros.
Did she tell the ticket buyers their purchase was a tax deductible charitable donation?
Did the poor 25 year old bastard who won the lottery/land realize he also won the opportunity to pay taxes on the value of 160 acres, obviously appraised at $500,000? There's a new hater to the IRS.
So who's on the non-profit board of directors?
Someone said she's running for some office?
Yeah, the guy who won the lottery will have to pay income tax to the IRS on his winnings. Here's a quarter section of Aurora County land for sale for $4250/acre or $680,000. Using that as a comparable he owes federal income tax on $679,000, which is $214,411 assuming he is single and has no other income.
http://www.irs.gov/pub/irs-pdf/i1040tt.pdf
Here's the link to the Aurora county sale. The link in the last post is to IRS tax tables.
http://hansenauction.com/land_for_sale_aurora_county_south_dakota_160_acres
Taunia, checking your read of the lottery law: if PHS raffled property that was owned by Bosworth personally and never transferred to PHS, but Bosworth put the raffle ticket money directly into the PHS checking account, is she still in compliance with the lottery law?
The IRS says raffle tickets are not tax-deductible. The Feb. 2, 2012, press release I mentioned above, in which Bosworth promoted a day-long event in Plankinton that included the sale of raffle tickets for the Aurora County land, stated, "All proceeds for the day will go directly to Preventive Health Strategies and are tax deductible." Her Moody County land raffle rules (which say the winner can choose either the 75+/- acres or $250K cash) say "no portion of the raffle donation is tax deductible."
Which all begs the question, why do all this raffle nonsense when she could just gift the land to the non-profit and the non-profit could in turn sell it for more than the raffle appears to bring in?
More to the point Nick, why isn't this on the news????
Poor b****rd only has 400,000+ left after winning her raffle Taunia. Why don't you send him a check for taxes?
The current officers, Taunia, are president Chad Haber, secretary John Williams, treasurer Shawn Poe, and v.p. Michael St. Vilien (as listed on SOS Gant's corporate database). Last year, the board consisted of pres. Annette Haber, v.p. Eric Ward, sec. Nichole Colsch, and treas. Shawn Poe. (according to the PHS 2012 annual report to SOS Gant).
Good point Owen, it should be news, but the SD media isn't interested in doing the leg work to investigate.
From the info here and as much as I can figure, it doesn't look like Bosworths had their game quite right for the first sale, with the tax deduction advertising, and (somewhere I think) the implication the land was Bosworth's instead of PHS-held. If the land was not held by PHS before the raffle and Annette collected the money, she probably should have to pay taxes on it. If she put all the proceeds directly into PHS (and did not take/keep any part of the proceeds), the IRS probably would not do anything. The intent was for the nonprofit.
Looks like Bosworths have covered more of the tax implications and responsibilities with the second/pending raffle, including the non-deductible part. It also appears from their link on the raffle is the land is being raffled under PHS, as the land holder of some degree.
All in all, it seems pretty shady, non-profits or not. If Cory's investigation is correct, her husband skirted some criminal charges for which statute of limitations may not have even run. Bosworth/Habers wer homeless and living in a camper last winter with their children. Now she's running for U.S. Senate, and still raffling land through a non-profit under the disclaimer it's for an Alaskan fishing trip for veterans or Haitian nursing students or something.
Can't imagine what she/they would do in D.C., given the chance.
The SD media aren't going to investigate anything, and it will take Cory almost proving the case to get any SD official to investigate. This sort of crookedness never gets exposed in SD because it is so ingrained into the political/business culture that no one thinks it's crooked.
If there is any hanky-panky going on here, it should make for an interesting campaign, being all the politicians like to do anymore is throw mud at each other. Hopefully it gets brought out and she can't stand the heat and gets out of the kitchen.
Now if only somebody would dig up some dirt about Rounds.
One thing at a time, Joan! That dirt is there; it's just Mike Rounds is smart enough (and has the money) to sweep it under heavier rugs.
Les, if you read the articles of the land raffle, the kid had nothing to his name, barely a cent. He didn't get any money from the raffle. He had the option of taking $250,000 or the land. He chose the land. That is what Taunia is saying. He didn't have 400,000 left of anything. That $1000 ticket ended up costing him a lot more than he thought. However, he chose the land, no one else chose for him. If the Bosworth's had it their way, I think they would have wanted him to take the money so they could raffle it off again. The Bosworth's ended up getting $500,000 for that raffle because he took the land. If he hadn't, they would have each gotten $250,000 and I think they would have done it again and again to keep collecting.
I doubt the tax is due the day he got the land Pam and if it was/is, I bet there are a 100 just like me that would have written a check for him with a nice return once sold. An auction on the land according to Nick would gross him 679,000 minus the 214,411 tax for a net of 464,589 substantially more than the 250K alternative. That poor tard is a tad brighter than Taunia when it comes to math.
Les, he did not have any plans in selling the land. He is from a family of farmers and decided to work the land. Some people take pride in making it on their own and not taking money from others. There is no reason for you to be so disrespectful to people. Have a conversation and leave name calling out, this isn't elementary school. As far as the taxes on the land being due, I have no idea. Were they kept up to date? I am not saying he was in a good spot or poor spot due to the sale. I just think you are missing the point of her conversation.