By MONROE ROARK
mroark@TheCitizenNews.com

Any controversy brewing over the proposed Deer Pointe annexation and rezoning request could be moot if a group of Mexican investors gets its way.

In a lawsuit filed last month in federal court, the investors are asking that last October's sale of the nearly 900 acres of land just west of Fayetteville be voided and the property be used to help satisfy an $18.9 million judgment handed down against the previous owners in a racketeering trial.

The plaintiffs have alleged that Signa Investment Corporation and Signa Investments Inc. conducted a “fire sale” of the Deer Pointe property to avoid using it to pay the multi-million-dollar penalty imposed by a federal jury in the previous suit.

Also named as defendants in the suit are Fayetteville's Dan Stinchcomb, who bought and now owns the property that developer Bob Rolader is trying to bring into the city for a 454-unit residential subdivision.

Two Atlanta law firms have been accused of helping the sale go through so that the money could be hidden before the courts could get to it, and those firms are also defendants, along with First Citizens Bank of Georgia, which has branches in Fayette County.

Amir Virani of Texas and Ignacios Santos of Mexico, who controlled the Signa companies, were sued by these same investors in 1997 for fraud, breach of fiduciary duty and violations of the Racketeering Influenced Corrupt Organizations (RICO) Act. They were accused of bilking their investors out of millions of dollars on real estate deals throughout the metro Atlanta area, according to court records.

One of the properties they bought was Deer Pointe, the subject of a controversial 1987 annexation and rezoning that resulted in a deannexation by the Georgia General Assembly and the eventual ouster of Fayetteville's mayor and entire City Council.

A four-week trial resulted in the $18.9 million judgment, which Virani and Santos are currently appealing.

According to the allegations in Mier v. Signa, filed Aug. 2 in U.S. District Court in Atlanta, the verdict was announced Oct. 8 of last year and the monetary judgment entered by Judge Thomas Thrash 14 days later.

But only hours and perhaps minutes before the judgment was announced, the plaintiffs allege, Signa sold the Deer Pointe land to Stinchcomb for $6.6 million, at least $1.5 million less than the property's fair market value as determined by an independent appraisal.

Signa then transferred all but about $4,000 of the sale proceeds to its attorneys and other parties to prevent it being seized to settle the judgment, the plaintiffs allege.

“Plaintiffs seek to set aside and void the deed from Signa to Stinchcomb, and the security deed from Stinchcomb to the bank, to the extent necessary to satisfy plaintiffs' judgment,” the suit reads.

When the original suit was filed in 1997, there was no lien or security on the Deer Pointe property, the plaintiffs allege, but a lien was granted to the Atlanta firm of Powell, Goldstein, Frazer & Murphy in late 1998 to secure legal fees.

Here's how the plaintiffs say the latest Deer Pointe deal went down, according to court records:

ä On Friday night, Oct. 8, 1999 — the same day of the jury verdict — Virani called Stinchcomb, who had previously tried to purchase the Deer Pointe property, and asked if he still wanted it.

ä Stinchcomb made an offer of $6,633,000 — substantially less than what he had offered five months earlier, and more than $3 million less than what Virani said he had told other prospective buyers he would require to sell the land. This time, however, Virani immediately agreed, on the condition that the sale take place within the next few weeks.

ä Virani and Stinchcomb signed no contracts, exchanged no earnest money and did not notify the plaintiffs of the impending sale.

ä The closing of the property began Oct. 22, the same day of the judgment, at 9 a.m. Stinchcomb, the bank, attorney Randall Lipshutz and his firm of Lipshutz, Greenblatt & King knew that the court would sign a judgment at any time.

ä Worried that the judgment would be entered before the closing, Stinchcomb and the bank called Powell, Goldstein at least twice that day to find out if it had been entered. After being notified at about 4:35 p.m. that it had not, the sale was closed and the proceeds distributed.

ä The title insurance policy issued by Fidelity National Title Insurance Company of New York contained a separate exclusion from coverage based on concerns that the transaction might be fraudulent. A special “risk” premium also was charged because of the fraud possibility, which the plaintiffs say Stinchcomb, Lipshutz and others involved in the sale discussed.

ä Attorneys for the plaintiffs learned of the quick Deer Pointe sale a few days in advance and filed a motion for immediate entry on the judgment. In a hearing conducted by telephone, at which Powell, Goldstein was present, Judge Thrash said he would enter an immediate judgment and asked the plaintiffs to have it ready for his signature before 5 p.m. Powell, Goldstein did not inform the participants in the Deer Pointe sale of the impending judgment.

ä After the closing, a check was issued to Powell, Goldstein for about $2.8 million to satisfy the firm's security interest in the property. Cashier's checks were then issued for $1.9 million, payable to Santos' daughter; $550,000, also payable to Santos' daughter; $960,279, payable to a partnership controlled by Virani and Santos; and $200,000, payable to the Lipshutz firm.

When all was said and done, a total of $3,648.51 remained of the original $6.6-million payment, according to court records.

Alleging that all of those financial transactions were fraudulent and amounted to a civil conspiracy, the plaintiffs are asking the court to void the sale of Deer Pointe to Stinchcomb, along with the security deed held between Stinchcomb and the bank, as well as the deed to secure debt from Signa to Powell Goldstein.

They also are seeking a lien on the property based on the judgment obtained in the RICO case, and the return of the funds distributed to the two law firms, along with judgments for the full value of the Deer Pointe property, plus punitive damages, attorneys' fees and expenses of litigation.

The law firms have publicly denied the allegations, and attorneys for the plaintiffs have declined to comment.

Meanwhile, officials in Fayetteville are wondering what's going to happen next.

City Manager Joe Morton said last week that he has asked Rolader for an update on the legal proceedings and how lengthy they could be, and that could be coming at any time.

“We obviously don't need to keep it on the agenda if this isn't going to be resolved soon,” said Morton. “The council wouldn't be comfortable voting on it with this cloud hanging over it.”

Rolader's request is currently being considered by the Planning and Zoning Commission. Since that group is a recommending body, Morton said its ruling would not be affected one way or the other by the lawsuit, but the City Council will likely not even attempt to vote on it until all of the court issues are settled.

As for Rolader, he acknowledges that everything going on in federal court is out of his hands, and he has plenty to do with the property to keep him otherwise occupied.

“We'll just pursue it,” he said, referring to the studies he has ongoing in relation to the lakes, soil and various physical aspects of the site. “We're doing a lot of testing that needs to be done anyway.”

Rolader reiterated his previous statements to the city that his involvement in the project continues to the point that it stays in the city, and Stinchcomb is still the owner of the property.