A trustee in the bankruptcy of failed real estate player Mark Bosworth is suing the Mormon Church, hoping to get back $100,000 in tithing to give to Bosworth's creditors.
Bosworth, as New Times reported in a May 15, 2008 investigative article, had some success in the Valley's once-smoking real-estate market before a civil lawsuit exposed his bad business practices and put him on the hook for a $17 million judgment.
Two years later, Bosworth's Chapter 11 bankruptcy case is plodding on, leading to the lawsuit filed yesterday against the Mormon church.
As the 2008 New Times piece mentioned, Bosworth paid $100,000 to the church in the year before he filed bankruptcy. The lawsuit notes that he and his wife, Lisa, are still apparently making pious payments of $1,500 a month.
Meanwhile, the many creditors in the case -- most notably including Utah businessman Ben Magelson, who won the $17 million judgment -- are getting bubkus.
The trustee's local lawyer, Alan Costello, (who didn't want to comment for this article), wrote in the lawsuit that -- far from anything godly -- Bosworth's making the payments to screw over the folks he owes money to:
Upon information and belief, the Debtors' payments of the Funds to Defendants were made by the Debtors with the actual intent to hinder, delay or defraud creditors.
Upon information and belief, the Debtors received less than a reasonably equivalent value in exchange for the transfer of the Funds.
Upon information and belief, the Debtors were insolvent on the dates of the transfers to Defendants and thereafter.
We love that second point, about how Bosworth and his wife didn't get much for their tithing. But how can the trustee be so sure? Maybe God reached out from his home near the star Kolob and bestowed blessings on the Bosworths in return for that cash. One thing's for sure, Bosworth has an almost miraculous way of stalling legal action against him.
An investigation of Bosworth by the Arizona Corporation Commission is also still ongoing, about two years after it started. Regulators accuse Bosworth and his company of ripping off millions of dollars from investors.
Last month, the Commission ordered two of Bosworth's former employees to pay hundreds of thousands of dollars in restitution to victims of bogus investment schemes.
Bob Bornholdt, while working for Bosworth, received $767,500 from five investors who were promised profits of 30 percent to 100 percent from the purchase and sale of commercial buildings in the Valley, a Commission order states. Bornholdt must pay the money back, plus 10 percent interest per year. The interest has already accrued to $282,630.
Another former employee, Steven Van Campen, was ordered to pay $855,000, (plus at least $298,293 in interest), for a separate investment scheme that involved the supposed purchase of condos in Rocky Point, Mexico. Reached by phone on Thursday, Van Campen tells New Times that while he can't pay the restitution just yet, some of the Rocky Point investors received equity in a few condos as part of a settlement.
Van Campen blames his troubles on Bosworth, whose case hasn't yet been finalized by the Corporation Commission. Hearings in the case of Bosworth and one of his partners, Mike Sergeant, are scheduled in June. We'll let you know what happens.
As part of his resolution with the Commission, Van Campen agreed to cooperate with investigators against Bosworth, he says. Van Campen says he "feels bad" about what happened to the investors, and that he's trying to make amends. He works for a local property management company, he says.
"I want to kick ass, be honest, do good deals and pay these people back," Van Campen says, adding that it's possible the ever-increasing debt may hang over him for life.
Whether the Mormon church will also help those victims is another question. We left a message with the church's headquarters in Utah about the matter, but haven't heard back yet.
Church officials preach against out-of-control debt. But do they also believe it's okay to profit off debtors like Bosworth? Thanks to this lawsuit, the public may soon find out.
The bankruptcy trustee, in more claims filed yesterday, is also seeking compensation from other people and companies linked to Bosworth, including:
*An Idaho company owned by Bosworth and his relatives, Spudbuddies.
*His wife and parents, who bought the Bosworth's current home just before the couple filed for bankruptcy.
*Various business associates.
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