Hard-money lender found guilty

A federal jury on Monday found Connie Farris, the former owner of hard-money lending company Global Express Capital Corp., guilty of 57 counts of mail fraud and aiding and abetting.

At the end of a three-week trial, the jury deliberated for 1 hour, 37 minutes before returning the verdict.

Farris was indicted on 63 counts of mail fraud and aiding and abetting, but prosecutors asked the judge to dismiss some counts. Chief U.S. District Judge Roger Hunt is expected to sentence Farris on Feb. 4, according to a source close to the case.

Like other hard-money lenders, Global Express solicited money from individual investors and used the money to make loans secured by real estate, typically to developers for one year.

Investors were attracted because of the double-digit interest rates they could earn on the loans and the relative security of having real estate for collateral.

The Securities and Exchange Commission filed a lawsuit against Global Express and in December 2003 persuaded a federal judge to put the company and other affiliated companies into receivership. Receiver James Donell counted 600 investors with claims totaling $44 million, but only $15 million in assets.

The U.S. Attorney’s office obtained an indictment against Farris in 2007. At the trial, the prosecution focused on
Farris’ involvement in obtaining investor money for five nonexistent loans. Some of the money was diverted to a custom home Farris was building and other funds were spent on trips her husband, Rex Farris, made to Russia, where he unsuccessfully sought to start franchise restaurants.

The trial was delayed multiple times. One time, Farris fired her defense attorneys and went to the hospital for a knee operation despite direction from the judge to delay the surgery.

Assistant Public Defender Shari Kaufman was assigned to defend Farris after the judge allowed Farris’ private attorneys to withdraw from the case.

In September, the trial was postponed again based on reports that Farris broke her leg and was under medical treatment.

The court bought a hospital bed and a wheelchair for Farris to use during the trail.

Marilyn Miller, a retiree, said she wondered whether Farris was as ill as the defendant indicated.

Told of the verdict, Miller asked: “Is that going to help me?”

Miller blamed herself for $200,000 in losses at Global Express. “It just means that I should have been wiser and taken (the investment money) out early,” Miller said. “It’s mostly my fault. Bad investments.”

Doris Stevenson, an investor who lost all but $42,000 of $170,000 invested at Global Express, said: “There was never anybody who was any happier to hear the news (about the guilty verdict).”

Because of Stevenson’s losses, her husband qualified for free treatment by the Veterans’ Administration for esophageal cancer, Stevenson said.

Bill Carr, chairman of the Legal Defense Group formed to represent investors in Global Express, said: “I’m glad that some type of justice has finally taken place for the investors.”

Paris Robert, a former banker in Montana, said in a statement that all but two of the loans in which he invested at Global Express “worked out as programmed.” Those two might have been successful investments, had it not been for the SEC and the receiver, Robert said.

Farris is the second defendant at a hard-money lending firm to be convicted this year. Joseph Milanowski, former president of USA Capital, pleaded guilty to wire fraud and was sentenced to 12 years in prison, but the prosecution has the option of recommending a reduction to eight years if he cooperates with the government and attorneys representing victims.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or
702-383-0420.

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