Ducey Appointee David Farca Sued for Fraud

When Governor Doug Ducey announced his appointment of David Farca to lead the Arizona-Mexico Commission last year, he attributed his choice to Farca's "exceptional entrepreneurial experience."

But records in an ongoing lawsuit in Maricopa County Superior Court against Farca and ToH Design Studio, his Scottsdale interior-design and furnishings company, put a negative spin on that experience.

In the lawsuit filed last December, plaintiff Greg Hoyt, president of Phoenix-based Arizona Industrial Properties, claims he paid Farca and his company $202,493 to remodel his vacation home in Cabo San Lucas, at the southern tip of Mexico's Baja Peninsula.

Hoyt alleges that Farca didn't do the work, kept the money, and displayed a "consistent pattern of dishonest conduct."

One of Farca's associates, Bob Toubman, a contractor who worked for ToH as director of Latin American business development, states in an August affidavit in the case that he wouldn't work on any more projects with Farca because "David's actions and lies had damaged my reputation in Cabo and the relationships that I had built in Mexico."

Hoyt's lawsuit alleges consumer fraud, breach of contract, unjust enrichment, and breach of good faith and fair dealing.

Farca declined to comment for this story, as did Hoyt and his attorney, Scott Holcomb. Toubman could not be reached.

Farca serves at the pleasure of the governor but doesn't take a salary in the volunteer position. The Arizona-Mexico Commission is a public-private venture, a nonprofit organization that raises and spends nearly all of its own money. Its 28-member board of directors, which includes Farca, meets and works in private, with the goal of helping Arizonans by strengthening business ties with Mexico.

As Ducey's office made clear in a bio released last year, Farca has an extensive background in business.

"With an exceptional entrepreneurial background, an enthusiastic passion for service and strong community and business ties throughout Arizona and Mexico, David will be a valuable asset to the AMC," Ducey said in a March 2015 statement. "In this increasingly competitive global economy, it's critical that we continue to strengthen Arizona's partnership with our largest trade partner, and to capitalize on opportunities that make both Arizona and Mexico more globally competitive."

Born and raised in Mexico City, Farca founded a retail business while still in high school. Pursuing an interest in medical imaging, he founded a company that, according to Ducey's office, became Mexico's largest supplier of imaging equipment. Farca's LinkedIn page says he's also CEO of International Business Group, LLC, an Arizona corporation of which he's the only member (and which has no affiliation with the international companies IBG Business or IBG Global). Farca has served on various local boards, including the Super Bowl XLIX host committee.

Both Farca and Hoyt are members of the Thunderbirds Charities, the venerable Phoenix organization that hosts and sells lucrative naming rights for the Phoenix Open golf tournament, now known as the Waste Management Phoenix Open.

In his lawsuit, Hoyt claims he developed a friendship with Farca through the Thunderbirds, and that Farca made a business proposition to him in 2014 after learning that he wanted to renovate his home in Cabo.
In a sworn declaration filed with the suit (see below), Hoyt claims he and Farca made a deal that ToH Design Studio would provide construction services, materials, and furnishings. He says they agreed on a price of $253,117 for the work, with a tentative completion date of October 1, 2015. 

In a separate sworn declaration (see below), Toubman states that Farca approached him to work on the project, and that he agreed, despite the fact that he had run into problems while doing business with Farca in the past. In his declaration, Toubman claims Farca had failed to finish projects on schedule and states that he had heard Farca had issues with paying bills on time.

Toubman claims that at Farca's request, Hoyt put down a deposit of $112,591.50 in July 2015. He also alleges that after agreeing with Hoyt on costs, Farca renegotiated deals with some vendors in order to avoid paying Mexico's federal excise tax and kept the difference for himself.

When Farca asked that Hoyt make a second payment of $68,000 by August 15, Toubman claims he "questioned" the request because work hadn't yet begun. "I was concerned that the funds would not be used for the appropriate purposes," he states in his declaration.

In his declaration, Hoyt states that he met with Farca after learning that Ginax, the contractor on the project, was not being paid on a timely basis and that its workers had walked off the job.

"I asked David three times, and each time David said unequivocally that everyone had been paid in full to date," he wrote. "I then called the contractor (Ginax) and was told Ginax had not been paid by David in 90 days, despite repeated promises of payment, and a modified payment agreement with David."

In an e-mail entered as an exhibit in the case, ToH employee Maria Abarca informed Farca that the studio was barely making payroll and she wanted to "make sure we will be OK. ... Construction has stopped in Cabo and I think we need to tell Greg that his home will not be ready as ... he and is [sic] family [are] arriving for the thanksgiving holiday."

"Yes we will be OK," Farca replied. "I am working on it. When did construction stop? Let Mr. Hoyt know that we will be delayed because of Hurricain [sic] Patricia."

According to Hoyt's suit, the hurricane that hit Mexico in October 2015 had no impact on the job. 

On December 15, 2015, the day Hoyt filed suit, Farca sent him a personal e-mail, a copy of which is included in the court file.

"I just wanted to reach out to you on a personal basis and apologize for what has transpired," Farca wrote. "Please know that it has not been ill-intentioned. I assume the responsibility, as being head of the business I am ultimately responsible for everything. I am embarrassed and ashamed for what happened and want you to know that I will see this through until the last item is delivered and installed. I will also make it up to you and compensate you however you see fit ..."

Hoyt seeks $400,000 from Farca: the payments he made, plus damages for Farca's "deceptive conduct."

Through his attorney, Robert Reder, Farca denies Hoyt's claims in several motions filed with the court.

Farca contends that he and Hoyt only had a verbal agreement for the project, with no specified completion deadline. He claims Hoyt "frustrated" delivery of materials to Mexico, and he denies shipping anything without proper tax certification. In a letter to Hoyt's attorney, Reder, writes that it was Hoyt's "impatience with processes that must be followed and that are outside ToH's control" and his "unreasonable demands" that pushed the project off-track.

Federal tax liens on file with the Maricopa County Recorder's Office appear to indicate that Farca and ToH Design Studio have encountered recent money problems.

Since 2013, the Internal Revenue Service has filed five liens against ToH and Farca. The largest unpaid balance, $112,532, occurred in October of last year. Farca has paid off most of the debt; the most recent lien on file, dated April 29, 2016, shows an unpaid balance of $26,867. The recorder's office also shows a May 2016 lien for an unpaid $6,050 medical bill.

In August, a new ownership group acquired the Arizona United Soccer Club and appointed Farca as the team's president.

He also continues to receive the governor's backing.

"Under David Farca's leadership, the Arizona-Mexico Commission has done a phenomenal job in cultivating a strong relationship with our second-largest trading partner," Doug Ducey's spokesman, Daniel Scarpinato, tells New Times. "That is already resulting in better job and economic opportunities for Arizonans, with more successes to come."

Read the sworn declarations from Greg Hoyt and Bob Toubman:

Read the apology email from David Farca to Greg Hoyt: