Their dreams shattered, investors left to wonder

By Jeff German

Friday, Nov. 28, 2008 | 2 a.m.

When Luis Rojas cashed in his $52,000 pension fund annuity in 2005, he thought he had found the perfect investment that would allow him and his wife to lead comfortable lives in retirement.

The 68-year-old former waiter poured his pension into HSLV Development Corp., a company owned by Hans Seibt, a smooth talker who promoted himself as a versatile financial expert and investment broker with the inside track on the real estate market in Pahrump.

Seibt used a 17-acre luxury RV park he had developed along Highway 160, Pahrump’s main thoroughfare, to lure Rojas and several hundred others, mostly from Las Vegas but also some from as far away as Florida, into investing in additional undeveloped land in Pahrump. He promised a hefty 12 percent return on their investments.

Those investors, many of them seniors who had turned over retirement accounts and life savings to Seibt, wound up losing the financial security they thought he was providing them.

Seibt’s chief investment company, HSLV Development, and several of his other companies filed for bankruptcy protection Sept. 25, listing more than $62 million in liabilities and $15.5 million in assets. Seibt also filed for personal bankruptcy protection, listing another $7.6 million in debts with $97,375 in assets that included a $69,900 Bentley. He reported having only $200 in the bank. He blamed the real estate market meltdown for his financial collapse.

More than $50 million of Seibt’s debt, bankruptcy records show, is owed in secured and unsecured real estate claims, ranging from $5,000 to $500,000, to people who thought Seibt would help them protect their golden years.

“He primarily preyed on older people who, in a lot of cases, needed this money to live,” said attorney H. Stan Johnson, who expects to represent as many as 30 creditors.

Rojas said he feels awful about getting duped by Seibt.

“All my life, I was a hard worker,” he said. “There are times when I get depressed and think of ending my life. But I know there are a lot of people worse off than me.”

Rojas and other potential victims said they have found some consolation knowing the FBI is involved. The FBI sent Seibt’s creditors letters in late October informing them that they may be victims of a federal crime.

“This case is currently under investigation,” wrote Maureen Seitz, an FBI victim specialist. “This can be a lengthy process, and we request your continued patience while we conduct a thorough investigation.”

FBI spokesman Dave Staretz said the agency had no further comment.

But bankruptcy trustee Lenard Schwartzer, appointed by the court to locate Seibt’s assets for his creditors, and attorneys representing some of those creditors said Seibt’s financial dealings resembled an illegal Ponzi scheme. Such schemes promise investors high rates of return, but must constantly search for new investors to pay off the older ones. When the new investors dry up, the schemes usually collapse.

Schwartzer said Seibt wound up borrowing money to make interest payments to his first-in-line investors and cover the bills at his Desert Retreat Luxury RV Resort.

No expense appeared to have been spared at the lushly landscaped RV park. It has a bowling center with a bar and restaurant, a nine-hole putting green, a fitness center and health spa, a two-level pool with a waterfall, a state-of-the-art clubhouse and 6,500 square feet of convention space. The resort has been taken over by a San Diego mortgage company that holds the first deed of trust on the property and is in the process of changing the name of the park.

Schwartzer said much of the land Seibt bought in Pahrump was heavily over-mortgaged, and many secured deeds of trust that he promised investors never were properly filed.

Some creditors, lawyers said, were provided with certificates, worthless pieces of paper that gave them shares of stock in companies that had no real assets. That has led the lawyers to speculate the FBI might be pursuing fraud charges against Seibt.

Seibt’s bankruptcy attorney, Ryan Works, declined to comment, and Seibt did not respond to a request through Works for an interview. The phone number at Seibt’s office at 8645 West Sahara Ave. has been disconnected. In his heavy German accent, Seibt frequently pitched moneymaking propositions over the phone.

Lawyers familiar with Seibt’s financial demise have warned that many creditors will have a hard time getting much of their money back.

Schwartzer said he grilled Seibt at a Nov. 3 bankruptcy meeting attended by some 200 angry creditors, but Seibt’s responses provided little insight into his remaining assets, other than the millions of dollars tied up in the RV park.

“His answer to a lot of the questions was basically, ‘I don’t remember,’ ” Schwartzer said.

Even his age may be a matter of dispute. Schwartzer’s assistant recalls Seibt telling creditors that he is 74, but online records say Seibt is 67.

Many of Seibt’s investors had been dealing with him for years. Over the past two decades, he offered other services, as well, through his insurance, mortgage and financial consulting companies.

“People were lulled into a sense of security by getting their monthly interest payments,” said attorney Eric Olsen, whose firm is preparing to represent about 50 creditors. “They were happy as long as they were getting their checks, but when the music stopped, there were no chairs.”

But Seibt kept singing his same tune right up until the day before he sent a letter to his investors informing them that he intended to file for bankruptcy protection. On Aug. 29 Seibt sent letters to some investors saying would be “keeping an eye” on the real estate market. He also said the “real estate market should be stabilizing within the coming two years, giving you the ability (of) selling this property at a decent profit.”

Rojas said his $522 monthly interest checks stopped coming at least two months before that letter.

And in the spring, as the real estate and credit crunch was worsening nationwide, Seibt had called Rojas asking for another $10,000, Rojas said. After Rojas told him he had no more money to invest, one of Seibt’s representatives tried to get Rojas to take out a reverse mortgage on his home, an offer Rojas declined.

Suzanne Le Ral, a 69-year-old former bank manager who had invested $59,000 in savings with Seibt, said Seibt asked her for another $10,000 about three weeks before he sent out his Aug. 30 announcement about his pending bankruptcy. She did not oblige him.

“What happened makes me sick to my stomach,” said the semiretired Le Ral, who had been doing business with Seibt for more than a decade. “That was the bulk of my retirement.”

Robert Nalett, an 82-year-old retired firefighter, said Seibt solicited $35,000 from him and his wife about 10 days before they got the bankruptcy letter. His wife had been getting roughly $2,000 in interest checks from a $242,000 retirement account she had turned over to Seibt. But those checks stopped coming about that time.

“I’m sad about it,” Nalett said. “He was never late on those checks until then. What do you do when a guy’s never late? We just walked into it blind.”

So did Donna Powers, a 62-year-old ailing retired cabdriver, who had invested $150,000 with Seibt.

Like the others, Powers said Seibt tried to get her to invest more money, as much as $20,000, a few weeks before he filed for bankruptcy protection.

“He called me three different times, and all three times I told him I didn’t have any more money to invest,” Powers said.

Today, Powers, who suffers from heart and lung ailments, said she has only monthly Social Security checks to keep her going.

“All of this is just making me sicker and sicker,” she said as her voice broke with emotion. “I feel like I’m stupid. I thought I could trust him.”

Johnson, who represents Powers, questions Seibt’s motives for soliciting more investments even as his financial world was crashing around him.

“He knew he was either going to file bankruptcy or would have a very difficult time paying back the money,” Johnson said.

Still, just a month before telling his investors that he would be filing for bankruptcy protection, Seibt sent an upbeat letter to investors bragging about “new and exciting developments” in Pahrump. He talked about several projects in the works, including a 330,000-square-foot shopping center anchored by a Wal-Mart, a gaming hotel with a zoo and Sea World-type complex, and a 2,500-acre master-planned community.

“In general, things are looking well,” Seibt wrote. “This is a great time for investors to build up raw land inventory. With a new federal government coming into office, look for a great 2009.”

With many of his victims heading into the coming year unsure of how they will survive with their retirement nest eggs crushed, Seibt is making at least one sacrifice of his own, according to his bankruptcy filing.

He is giving up his Bentley, meaning he’ll have to use his other car — a 2007 BMW sedan he valued at $27,275.