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Before he swayed the V.I. government to include him as a principal in the $55 million Frederiksted sports complex - which uses $30 million of V.I. taxpayers' money - James K. Sutherland conducted a string of unsuccessful real estate manipulations that ended with him losing his house in Colorado to foreclosure.
Just a few months after Sutherland took out the house mortgage in 2007, the lender foreclosed. The house went up for auction, and the lender took it back.
Two years before Sutherland got the mortgage, he and two women engaged in a series of real estate transactions that resulted in the same property being used as collateral for a $620,000 loan to Sutherland.
At the time of Sutherland's real estate manipulations, he was under court order to pay child support to his three children after his divorce in 1999.
Sutherland's failure to pay his monthly support ultimately resulted in his owing $286,000 for back child support and interest and enforcement actions against him by agencies in two states.
Sutherland refused to be interviewed for this article.
The string of real estate transactions involving the house on East Purdue Place in Aurora, Colo., began in May 2005 and involved Sutherland and two other people, individually and together.
The head of the real estate division of a regulatory agency in Colorado described those transactions as "unusual."
After hearing a summary of the public records for the property, Marcia Waters, director of the Colorado Department of Regulatory Agencies Real Estate Division, said: "That's not what you see with a standard real estate transaction."
The Department of Regulatory Agencies Real Estate Division is the licensing, regulation and enforcement agency for real estate brokers, appraisers and mortgage loan originator industries in Colorado.
Waters pointed out that the transactions occurred before the bottom fell out of the real estate market.
"May 2005 is when we were still seeing the kind of creative financing that was going on," she said.
One of the people involved with Sutherland in some of the transactions was Sylvia Boyd, who was disciplined by the Real Estate Division in 2007 and had to surrender her real estate broker license as a result of her dealings in other real estate transactions.
Transactions on Sutherland's house started in May 2005. Public records in Arapahoe County, Colo., show that:
- Linda Heuton signed a deed of trust - a mortgage - for the property on May 3, 2005, for $480,000.
- A second mortgage for $120,000 was dated May 2, 2005, but not signed by Heuton until May 3, the same day as the first mortgage.
- Also on May 3, 2005, the previous owner signed over the warranty deed to Heuton for $600,000.
Then, in a series of documents filed on October 7, 2005:
- Heuton quit-claimed the deed - relinquishing her sole interest and claim to the property - to herself and Sylvia Jones as joint tenants, in a document dated May 3, 2005, which was Heuton's original purchase date.
- Heuton gave power of attorney to Sylvia Boyd, who also was listed as Sylvia Jones, in a document signed June 1, 2005.
- Boyd/Jones and Heuton quit-claimed the deed to the property to themselves and Sutherland, so the three of them were owners, in a document also dated June 1, 2005, and signed by Boyd/Jones.
- In a deed of trust also dated June 1, 2005, Boyd/Jones and Heuton gave Sutherland a $620,000 loan using the property as collateral. Sutherland was supposed to make monthly payments of $4,213.03 beginning July 1, 2005, with the entire amount of principal and interest due and payable a year later, on June 1, 2006. The transaction did not involve a commercial lender.
The transactions and filings on the property resumed in April 2007, when Deutsche Bank National Trust filed a foreclosure action on the house because Heuton had defaulted on the $480,000 mortgage she signed May 3, 2005.
According to the document, $473,237 in principal was owed on the note.
The house went to auction on June 13, 2007, with Deutsche Bank setting the opening bid at $337,000. The property went to Deutsche Bank.
In 2007, Colorado state law gave owners 75 days to redeem a property after losing it in a foreclosure sale - so transactions on Sutherland's property resumed.
- Heuton, Boyd/Jones and Sutherland quit-claimed the property to Sutherland, making him the sole owner, in a document dated Aug. 20, 2007, and filed Aug. 31, 2007.
- Sutherland signed a $420,000 mortgage on the property with Access Financial Group on Aug. 22, 2007.
- In a document dated two days earlier, on Aug. 20, 2007, Sutherland was released from the 2005 deed of trust with Heuton and Boyd/Jones. The release stated that the indebtedness was fully or partially discharged and/or the purpose of the deed of trust was fully or partially satisfied.
- The Public Trustee of Arapahoe County issued a certificate of redemption on Aug. 28, 2007, noting that on Aug. 23, 2007, the owners paid $353,016 and redeemed the property from the foreclosure.
The original document named Heuton, Boyd/Jones and Sutherland as the owners who redeemed the property.
In February 2008, the original document was re-recorded to remove Heuton and Boyd/Jones as owners and to state that Sutherland was the sole owner of the house.
- Access Financial Group foreclosed on Sutherland's house in April 2008, noting that beginning in February 2008, Sutherland had failed to make payments. Eight months later, on Dec. 17, 2008, Access Financial Group bid $463,802 and took the property at an auction, according to Arapahoe County public records. Sutherland could not get it back this time because Colorado law changed in 2008, and owners no longer were allowed to redeem property they had lost, according to Ana Maria Peters-Ruddick, the Arapahoe County Public Trustee.
Waters, the head of the regulatory agency, said that if one of the participants had filed a complaint, the series of transactions would have raised questions.
"I do know that if this was a complaint that was submitted to us, even just the scenario that you just described raises a bunch of questions I would be asking as the investigator," Waters said.
Three years later, even though Access Financial Group still owns the house, Sutherland listed the house address as the billing address for his credit card when he applied in 2011 to the V.I. Department of Licensing and Consumer Affairs for a business license for GlobeVest V.I.
GlobeVest V.I. still does not have a business license because GlobeVest V.I. has not produced all the required documentation from other agencies, said Frederick Norford, DLCA attorney.