If the old wives are right and bad news really does come in threes, then Tom Connelly is due for some good news very soon.
In the past year, the former federal prosecutor has had a run of terrible luck. First, he resigned from the U.S. Attorney's Office in Phoenix shortly before he was publicly linked to a federal contracting scandal. Next, Connelly was sued for fraud in a federal case in Maryland. Even though that lawsuit was thrown out of court, Connelly couldn't relish the victory, because he was soon hit with strike three.
Last March, Connelly and several others were sued for fraud by an ex-buddy of Connelly's named Dave Newton. In the Maricopa County Superior Court suit, Newton alleges that Connelly used his position as an assistant U.S. attorney to sucker him into lending $30,000 to investors purchasing Sandspur Ranch, a north Scottsdale Arabian-horse farm.
Newton handed the $30,000 over to Vincent Mazzeo, a Scottsdale businessman who once put together "deals" through his company Corporate Investments.
This was the plan: Mazzeo would use Newton's $30,000 to prime the pump. The $30,000 up-front would entice "European investors" to put up the rest of the money for the horse farm. Then Newton would get his money back, with substantial interest.
Newton never saw his money again.
Newton, who has refused comment, charges in court papers that Connelly assured him that as an assistant U.S. attorney, Connelly had investigated Corporate Investments and found it financially sound. Later, Newton learned that Corporate Investments had filed for bankruptcy.
Newton also alleges that Connelly offered his position as assistant U.S. attorney as a guarantee that Newton would get his money back.
In court papers, Tom Connelly says he never used his position as an assistant U.S. attorney to hook Newton into the deal.
In fact, Connelly is so upset over Newton's allegations that he is countersuing Newton for defamation.
The embattled Connelly says his role in the horse-farm deal was simple: He introduced Newton to Billy Harris, a horse trainer who was desperate to buy the horse farm. Connelly says he simply wanted to put Harris in touch with a possible investor. A series of other introductions eventually linked Newton to Mazzeo.
Connelly emphasizes over and over that the introduction of Harris to Newton was the extent of his involvement. It was Harris who then put Newton in touch with Gary Anderson, a former vegetarian-restaurant manager and bodyguard. Anderson in turn linked Newton with Mazzeo.
Also named in the ongoing lawsuit are Harris, Anderson, Mazzeo, and George Hirko, Mazzeo's salesman.
Mazzeo refused comment. But Hirko, Anderson, and Harris all say Connelly is telling the truth: His only part in the Sandspur caper was to introduce the horse trainer Harris to the investor Newton. Says Harris: "The only thing Connelly had ever done was try to help me get the farm . . . I wanted that farm so bad."
Tom Connelly himself is hopeful. "I expect this case will be dismissed just as the Maryland case was dismissed," he says.
In the Maryland case, Connelly got in hot water for signing an affidavit in his official capacity attesting that a Scottsdale friend, Bill Reeves, was worth $138 million. Reeves used the affidavit to sell bonds for an Air National Guard construction project in Maryland. He later defaulted on the bonds, and as a result, several subcontractors were not paid for completed work. The subcontractors included Connelly in a fraud lawsuit in federal court in Maryland, saying he signed the Reeves affidavit. Later, they dropped Connelly from the ongoing suit. Says their lawyer, Bruce Magazine: "We just didn't have enough evidence against him."
The $30,000 up-front would entice "European investors" to put up the rest of the money for the horse farm.