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County Supervisor Don Stapley made a killing on a shady development and sank the profits into a mansion. Then he told the tax assessor to value his estate at $863,000 -- while listing it for sale at $2.5 million.

Michael Denious, the assistant attorney general, says the department decided to charge only the major players.

"Our theory going into the hearing is that this was the doing of Cowley," Denious says. "Stapley was a little more passive and we decided not to name him as a respondent."

Not only was Stapley dropped from the attorney general's case, he also got his apology from the Real Estate Department.

Stapley is asking $2.5 million for his Arcadia home, though he told the county it's worth $863,000.
Paolo Vescia
Stapley is asking $2.5 million for his Arcadia home, though he told the county it's worth $863,000.

Commissioner Holt, who in 1996 had "recused" himself from the matter, waded back into the case in March 1999, sending a written apology to Stapley renouncing Ricketts' investigation.

"The Real Estate Department sincerely regrets and retracts any comment we have made in the past which did link or may have linked you to unlawful subdivision activity," Holt's letter to Stapley stated.

Don Stapley came out unscathed. He avoided legal action and got a written apology from the real estate commissioner.

He also managed to trade his remaining 15 acres for a $120,000 profit, a windfall that helped land him in the Arcadia estate.

Lawrence Tercha was not going to go away quietly.

In March 1996, Tercha signed a sales agreement to buy five acres of San Tan land from Stapley for $35,000. But before the agreement could close, state investigators began poking into lot-splitting allegations.

Walker, Stapley's lawyer, says the attorney general requested that Stapley not sell any of his three remaining five-acre parcels until the investigation was concluded.

Assistant AG Denious disputes Walker's contention, saying it is unlikely the department would have interfered in the sale of the property. The state, he says, has never issued an order prohibiting the sale of the lots.

In any case, by June 1997, Tercha, a Michigan snowbird, had hired attorney James Carnago to try to force Stapley to live up to the sales agreement. Stapley had tried to terminate the deal by returning Tercha's deposit. Tercha, however, sent the money back to Stapley.

Carnago soon discovered that Stapley wanted to trade the property to another party rather than close the deal with Tercha.

"All this seems to indicate some defalcation on the part of Mr. Stapley and his organizations and intends to indicate to this writer that some violation of statutes and rules have taken place," Carnago stated in a June 9, 1997, letter to the attorney general's office.

In an interview, Carnago says he didn't know at the time whom Stapley wanted to swap land with.

A couple of weeks after Carnago wrote his letter, Stapley and other members of the Board of Supervisors approved a $9 million expenditure that was lumped into the county's transportation budget to upgrade the Estrella Parkway near the town of Goodyear.

The parkway project, which a month earlier had been scheduled for construction in 2002 by the county's Transportation Advisory Board, had suddenly become a high priority. With the supervisors' vote, construction would begin in 1999. County transportation officials can't explain why the project leapt up the construction schedule.

Estrella Parkway happens to lead to a massive real estate project that was started by Charles Keating in the 1980s. The Estrella development floundered with the collapse of the Arizona real estate market. The property was eventually purchased by Sun Chase Holdings, an international development company financed by a wealthy Malaysian family that controls a vast timber empire.

Sources familiar with the project say upgrading the road to Estrella was a high priority for Sun Chase.

"It's the entrance into the development. Without an improved road, you are going along a country road" that was prone to flooding, says one source who asked not to be identified.

Stapley doesn't recall when he began discussions with Estrella's developer, Bill Pope, president of Sun Chase Holdings, about trading his San Tan land and other properties for the Arcadia estate. Pope had known Stapley for several years and has contributed money to Stapley's election campaigns.

But by the middle of the summer of 1997, those discussions were ongoing, Stapley says, and eventually culminated in a complicated exchange of property between Stapley and a Pope-controlled company called Arizona Sun Holdings, a subsidiary of Sun Chase Holdings.

By August 1997, Stapley had formally agreed to swap his Mesa home, a San Diego condominium and his 15 San Tan acres to Arizona Sun Holdings as down payment on the Arcadia estate.

Stapley's possible motivation to trade the land rather than sell it off piecemeal becomes more apparent when the details of the trade are revealed. Rather than having to market the property and appear to be subdividing his 20 acres into four parcels, Stapley could net a large profit and only cut his 20 acres into two parcels.

According to county real estate records, Stapley's Mesa home had no equity, and the San Diego condominium contributed only $8,000 toward the down payment for the $900,000 Arcadia estate. The bulk of the down payment came from the 15 acres of land -- which Arizona Sun Holdings agreed to value at $125,000.

In a little more than two years, Stapley's $40,000 investment in the 20-acre San Tan property had returned him $160,000 -- a net profit of nearly $120,000.

Stapley closed the deal on the Arcadia home by taking out a $500,000 mortgage from a private lender and securing a $250,000 carryback loan from Arizona Sun Holdings. Stapley's actual out-of-pocket cash to get into the Arcadia estate was $34,000, including $19,000 in closing costs.

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