$1.5 M Swindle in San Felipe, Mexico

$1.5M Swindle in San Felipe

Fake development supposedly a Trump project

BY <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />NANCY CONROY

Con man Steven Francis, who went by the name “Gary Stevens”, swindled investors out of an estimated $1.5 million dollars before his recent arrest in San Felipe Mexico by US Federal agents.  The crook, who was arrested on an outstanding US bank fraud warrant, collected deposits from 42 unsuspecting buyers for a fake condominium project called “Encantana”.  Stevens claimed that Donald Trump and Bancomer were investors in the project, which was to consist of 13 towers on 2,000 acres in San Felipe.  Buyers from Arizona and California, most of whom had never been to Mexico, wired deposit checks to a Mexican bank account based on claims made on a website.  “It’s ridiculous, if you really think about it” said Sherry Aviano, one of Francis’ victims. 

Prior to his arrest in May, Francis had been living in San Felipe for a number of years.  He ran a real estate office and posed as an American attorney.  Experienced business people said that Francis was likable, intelligent, and seemed legitimate.  Francis helped Americans to obtain bank trusts, with the help of a Mexican attorney that worked for him, which added to his credibility.  Most of the individuals who were duped in the condo scam had successfully worked with Francis on other projects.  Francis convinced at least two people to “buy in” to the condo project, by exchanging interests in existing properties and businesses for a percentage interest in the development.  One of these individuals, David Shepard, who was listed as a co-developer on the Encantana website, said that he never received any percentage in the Encantana development and that he was not involved in the scam.

Francis made an agreement with golf legend Arnold Palmer to design the golf course at the fake project.  Palmer charged $1 million dollars to design the golf course, and he also charged $100,000 for publicity photos bearing his image.  It is not clear whether these amounts were actually paid, but Palmer performed the photo shoot, and his photo appeared on the Encantana website.  Palmer, who was not involved in the fraud, demanded the removal of his likeness and all website references to him when the fraud was revealed.

Victims were lured into quickly buying condos at the Encantana development because Francis claimed that Donald Trump was involved in the project.  Apparently, Francis had indeed traveled to New York for preliminary meetings with Donald Trump’s children, Ivanka and Donald Jr., who now manage parts of the Trump businesses.  One source said that he had traveled with Francis to one of the meetings, where he rode in a Trump helicopter.  He said that Ivanka and Donald Jr. had demanded millions of dollars to license the Trump name, and they had refused to make any financial contributions to the project.  They also demanded proof that the land had been acquired, and title insurance.  A lawyer working for the Trumps, Michael Cohen, had provided some preliminary contract proposals.  Copies may exist of some of these preliminary Trump documents. 

Based on these negotiations, Francis represented to buyers that Trump had already committed to the project as a 30% partner.  He called a real estate agent in Arizona and encouraged her to tell people to buy condos immediately, before the public announcement of the Trump involvement.  The agent, who is active in an investor network, sent an email to some friends and family about the offer. 

Based on the Trump claims and the website, 12 investors sent a total of $600,000 in deposits to Francis over a one week period.  The money was wired to a corporate bank account in San Felipe at HSBC bank.  The account, which was a regular bank account, was in the name of Francis’ company, “Baja Land Title”.  Apparently, the use of the word “Title” in the name of the account led investors to believe that the account was an escrow account belonging to a title company.  Francis regularly told people that he represented or was affiliated with one of the major title insurance companies in Mexico.

Francis claimed to be married to a local Mexican woman, Lorena Stevens.  An investigation revealed that they are not actually married, and it is unknown whether the two children in the household are actually his.  The children also bear the last name Stevens, because Steven Francis used the alias Gary Stevens when he operated in Mexico.  It is unclear whether Lorena Stevens was an accomplice in the fraud.  Reports indicate that she obtained four blank checks from the corporate checking account just before Francis was arrested.

The Francis corporate bank account now has a balance of $100,000, and millions of dollars in investor deposits have disappeared.  Defrauded investors are consulting with lawyers to obtain relief.  It is also believed that Francis may have obtained an additional $600,000 from various other side deals that were unrelated to the condo project.