Utah lawsuit targets Apex

A lawsuit filed in Utah attempts to link a local industrial park to a fraud scheme, alleging that those behind the Apex Industrial Park, including some of Southern Nevada's business and political leaders, took tainted money and profited from a real estate deal that was bound to fail.

The lawsuit is part of a web of litigation and prosecution surrounding VesCor, the umbrella name for companies run by Utah resident Val Southwick, who pleaded guilty to securities fraud in March.

Since 1990, Southwick ran a Ponzi scheme in which investors were told their money would be used for real estate development, regulators said. The money was used to pay previous investors and cover the company's costs.

By the time Southwick approached Apex in 2005, he had been sanctioned twice by Utah securities regulators.

"Apex knew or should have known VesCor did not have the financial ability to purchase" land in the park, the lawsuit said.

Adam Titus, the head of Industrial Properties Development, which is developing Apex, did not respond to a request for comment Tuesday.

The park, on Interstate 15 and U.S. Highway 93, about 15 miles north of downtown Las Vegas, was created in 1988. In 1995, a group of private investors offered to take over the project from Clark County, later buying 10,000 acres for $9 million and investing another $9 million for costs such as environmental studies and engineering.

The group included leading Las Vegans in the construction, real estate and gaming fields, and Oscar Goodman, who said he invested before he became mayor of Las Vegas in 1999. He maintains an investment of less than 4 percent, he said through a spokesman, and is not active in managing the company.

According to a report in the VesCor bankruptcy case, the Apex group sold about 4,000 acres to various parties for a total of $40 million, more than doubling its initial investment.

Southwick initially wanted to buy only part of the remaining acreage, according to court documents, but made three deals for a total of 5,800 acres of industrial park land and made a $22.2 million down payment.

That money, the lawsuit alleges, "was paid out of investor funds as part of a Ponzi scheme." The lawsuit alleges Apex did not act in good faith, as its executives knew or should have known that Southwick was not a responsible buyer.

Southwick's companies collapsed in 2006, and Apex repossessed the acreage.

Contact reporter Alan Choate at achoate @reviewjournal.com or 702-229-6435.