More than 120,000 pounds of crystals and fossils worth about $25 million were moved illegally from a Sedona warehouse to Phoenix, where they were sold for $1 as part of a land scheme, a lawsuit alleges.
Seattle resident Richard Berger claims in the suit filed in federal court yesterday that a group of fraudsters, including two Phoenix men, swindled him out of a collection he'd intended to sell to a museum.
Berger and his business, Museum Associates, acquired the collection over the past 35 years, and he says it's "considered by many in the industry as the rarest and finest private collection of any giant crystals fossils (sic) in the world)." He calls it "The Masterworks of the Earth."
A federal judge issued a restraining order in the case today, as we'll relate below.
To sum up what the suit says:
It all traces back to 1995, when Berger tried to set up a deal to sell the collection.
Berger claims that Brian Myers and Tina Choate of Goldstone Management, LLC, in Sedona have been stringing him along for years, always dangling before his eyes the possibility of a multi-million-dollar payoff.
Agreements were reportedly signed that would give the collection, appraised at $25 million, to a buyer for $12 million. Berger was supposed to get $6 million by March 31.
Berger says he not only didn't get paid, but was "swindled out of his life's work."
In fall 2009, the possibility of floodwaters bursting from an unstable earthen dam in Kent Valley, Washington, where the collection had been housed, caused the would-be deal-makers to move the collection to a Sedona warehouse called Plaza Kailasa.
Without Berger's knowledge, he claims, Choate and Myers negotiated a $2 million land deal with Maricopa County residents Gary Midzor and Chris Ivey of G.M. Property Development LLC, using the collection as security.
Choate and Myers then sold the collection to G.M. Property Development for $1.
Myers and Midzor showed up at Plaza Kailasa on February 16 with six tractor-trailers. They told Craig Ramsell, the warehouse owner, that they were from an insurance company.
Ramsell watched as 120,000 pounds of crates were loaded into the trucks.
Now, everything's at a warehouse at 4440 East Elwood Street in Phoenix.
Midzor and Iveycalled Berger "this week," demanding money and threatening to sell the collection to someone else.
Tom Lindgren of Bonhams and Butterfields Natural History Auctions received a call in late March from Midzor, who wanted to inquire about selling a bunch of crystals and fossils, the suit says. But after Lindgren was allowed to see the collection, he recognized it as Berger's and gave the Seattle man a call.
Lindgren said Midzor and Ivey wanted $2 million for the collection, according to the suit.
Berger alleges fraud, breach of contract, negligence, improper conversion of property, and other offenses. He wants $25 million plus attorney's fees, a punitive damage award and an injunction against any further action by the defendants.
We love stories about the sometimes-shady business of fossil trade. We're not sure if we want Berger to get his collection back -- or sell tickets so everyone can take a look.
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UPDATE: U.S. District Judge Neil Wake issued a temporary restraining order today that prohibits any movement of the collection until May 26, following a court hearing. Dirck's Moving Services, one of the plaintiffs, was ordered to meet with Berger's lawyers by tomorrow to make sure "all procedures have been taken to prevent the collection from being removed from the warehouse."
We left a message for Ivey, Choate and Lindgren, but haven't heard back.
LATEST UPDATE: See our June 10, 2011 article.