1991 - Fall
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RTC / 3M Greco Class Action Law Suit, Case No. 92-CV-2042
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Section 4 provides the aftermath of Harmon's divorce with now Sandra
Allen when all hell broke loose upon the real estate markets nation wide
in the late 80's and early 90's. The US Government, having guaranteed
the depositors in the failed Savings Banks that made the loans on the
failed properties, were then poised to take over the loans and
ultimately the properties to protect the insured depositors. Owning a
commercial property involved in this debacle, in an epic battle against
obvious government corruption and pork barrel politics, to protect his
interests and the collective interests of all US tax payers, Harmon
filed an unprecedented 30 billion dollar class action suit. The battle
was dubbed "David vs Goliath" on a CBS morning talk show in Colorado and
was also aired on 68 channels nationwide through Business Radio
Networks program, "Scams Across America", also ranked as one of the top
three talk shows in Washington DC. Included in this section's PDF's
are the court summons, case summary and the 17 October, 1992 Denver Post article regarding Harmon's 30 billion Dollar Class action suit on behalf of all US
tax payers against the Resolution Trust Corporation (RTC), 3M-Greco
Ltd, Houlihan Parnes Realtors and Goldberg Property Associates Inc.
Harmon's original documents on the suit were taken by the Colorado
police in a raid on his archival storage and never returned; however,
this is a public record that can be obtained through the Federal
District Court by case number 92-CV-2042.
The Resolution Trust
Corporation was the government representative formed by the US Congress
to take over the failed Savings and Loan Banks throughout the US during
this national real estate crisis. The purpose of the RTC was to take
possession of all failed real estate loans / properties and recover as
much money as possible for the banks and the federal insurance programs
on behalf of the US
tax payers. Harmon developed a commercial property with a loan for 3.2
million dollars from a New York Savings and Loan that was taken over by
the RTC. When the property market crashed and his building became empty,
with prices falling dramatically, he found a buyer for his property for
$1.5 million. The RTC rejected this buyer and would not let him sell
the building. Instead they sold the loan and the building for $500,000
to a private shell corporation called 3M-Greco Ltd and gave Harmon's
buyer 3M-Greco who, with the RTC's cooperation completed a foreclosure,
obtained title and sold the building to a new buyer for $1.25 Million,
all within 24 hours of closing on the purchase of the original
loan; thus, providing a $750,000 profit to 3-M Greco instead of the US
tax payer. It was also discovered that 3-M Greco and other shell
corporations like them were doing hundred's of millions, indeed even
billions of large scale purchases throughout the country. Imagine that.
After
joining forces with Steve Wilmsen, the Denver Post investigative
reporter assigned to investigate the RTC activities, they communicated
with a representative sample of real estate owners and developers caught
up in the RTC take over and discovered that the same wasteful pattern
had developed throughout the country. Estimating the US
tax payer losses at a minimum of $30 billion dollars, Harmon then filed
the class action suit. In the end, it would seem that without the
money to pay expensive attorneys, such a suit cannot survive in the US legal system. The US government and the RTC hired the best law firms in Washington DC and Denver
and obtained a dismissal on the basis of technical errors, in spite of
the fact that the RTC committed a technical fault by filing their
response well after the required time limit as pointed out by Wilfred's
Motion for Default Judgment. However, the Judge left an open
opportunity to re-file on the basis of having a class action attorney on
board. With no money to hire such an attorney, Harmon was forced to
stand down.
Index of PDF documents in Case history Section 3:
Pg 1-3 Civil Action File No. 92-2042, Summons
Pg 1-14 Civil Action Fle No. 92-2042, The Complaint
Pg 1-3 Denver Post : "Angry Developer Sues RTC For 30 Billion..."
Pg 1-4 Wilfred's Motion for Default Judgment
Pg 1-2 Case Dismissal
Pg 1-4 Case Docket Summary
Questions:
- How
could the RTC get away with the scam of rejecting a buyer at $1.5
million for Harmon’s building, starting a foreclosure and then selling
the loan at $500,000 knowing that on the day after the loan sale and
foreclosure was completed (both closed on the same day) the private
buyer of the loan would take title to the property and close a sale on
that same property within 24 hours for $1.25million making a profit of
$750,000 which is the profit that should have belonged to the US
taxpayers?
- Did
the RTC hand Harmon’s buyer over to the purchaser of the loan such that
the profit the RTC should have made for the tax payers ended up in the
hands of the loan / property purchaser?
- Was
there a hidden agenda in this process putting money in the pockets of
third parties intimately involved in setting up the overall structure of
the system?
- Is
it possible that the formula being utilized throughout the country for
giving away massive profit to private interests was also the same one
used in the "White Water" scandal that benefited Bill and Hillary
Clinton?
- How
is it that the Judge would dismiss the case on legal technical issues
against Wilfred, and yet deny the US tax payers a technical default
judgment when the RTC in the first instance blatantly defaulted by
answering the complaint beyond the 20 day statutory time required. In
fact the RTC did not file their answer until Dec 10, 1992, 51 days from
the service of summons and 34 days after the return of service, clearly a
technical default committed by the RTC in the US tax payers favor that
warranted a judgemnt. The rule is stated on the face of the summons.
Was the Federal Court illegally favoring the RTC? If so, why?