A future out of fraud?
August 14, 2006
Nearly three acres of prime real estate in the core of Kings Beach is being sold in a multi-million dollar fraud and bankruptcy case that has spurred 129 felony charges in Santa Clara and Santa Cruz counties.
The 15 properties for sale include the Kentucky Fried Chicken restaurant, Lucky 7 Tattoo, two recreational trailer parks, a strip mall along Highway 28 and several homes.
Realtors in charge of the sales are searching for a single buyer for all of the properties. No asking price or estimated value has been determined by real estate agents.
One of the agents in charge of the sale, however, said the deal includes entitlements to re-develop the area and is a huge opportunity to invigorate Kings Beach’s downtown.
“This is an opportunity for a major renaissance in Kings Beach that expands beyond commercial row,” said Century 21 Realtor Michael Dunsford.
Meanwhile, the investment fraud case, in which investigators say suspect Michael Schneider bilked individual investors out of more than $35 million, is heading to court in both Santa Clara and Santa Cruz counties.
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“It’s not the largest case we’ve had, but it’s one of them,” said Dale Lohman, deputy district attorney in Santa Clara County.
Investigators allege that Schneider sold loans that he said were backed up by real estate deeds of trust. Often the loans were misrepresented, or there was absolutely no real estate backing for the money, according to investigators.
“Investors discovered that in most instances, Schneider failed, as promised, to secure their loans with validly recorded deeds of trust,” said Santa Cruz County, in a statement on the case. “Instead, Schneider would provide the investors with phony deeds of trust and just keep the investors[‘] money.”
Schneider is being held on a total of $15 million bail, $10 million in Santa Cruz County and $5 million in Santa Clara County.
Charges against Schneider include grand theft, elder fraud and forgery, but new charges are still rolling in.
“They know we’re looking at additions and additional charges,” Lohman said.
Schneider’s business, a licensed real estate brokerage firm, was called California Plan, Inc., and was located in Santa Clara.
Along with the Kings Beach properties, the trustees in the bankruptcy case are selling off real estate owned by either Schneider or California Plan in other parts of the state.
Dunsford said he would like to see selling the 15 Kings Beach parcels to an owner that truly wants to invest in the downtown of Kings Beach.
After the county has committed millions of dollars to re-work Kings Beach’s downtown streets, sidewalks and other public facilities, “now it’s time for the private sector to follow suit and begin investing,” said Dunsford.
Already 1.3 acres of the properties include preliminary approvals from Placer County on a project proposed by Schneider and his planners as the “Kings Beach Mixed Use Village.”
“This is probably the only consolidation of properties that will be available in Kings Beach to do something on a larger scale,” said Dunsford.