Bank Says Jailed Lobbyist Hid Assets

     RENO, Nev. (CN) — Imprisoned lobbyist F. Harvey Whittemore hid millions of dollars from creditors, the Bank of the West claims in court.
     The bank claims and his wife Annette created a shell company, Lakeshore House LP, and transferred much of their personal assets to it. It also sued eight other members of the extended Whittemore family and another couple, on April 21 in Washoe County Court.
     Whittemore is scheduled for release in August from a federal minimum-security prison after serving two years for a 2013 conviction for using straw donors to make more than $130,000 in illegal campaign contributions to U.S. Senator Harry Reid in 2007.
     Just as he used straw donors to make those illegal contributions, Bank of the West says, Whittemore is using a sham company to protect his assets from his creditors.
     “Adherence to the fiction of the Lakeshore House LP being a separate entity from the Whittemores would sanction a fraud and promote an injustice,” the bank says.
     “The financial structure of Lakeshore House LP is only a sham and has caused an injustice, as the Whittemores have transferred substantially all of their personal assets to Lakeshore House LP in an effort to shield them from the Whittemores’ creditors.”
     It says that efforts to “hinder, delay or defraud” the bank via fraud are evident by the Whittemore children and Lakeshore House being “insiders” as defined by Nevada law.
     According to the lawsuit, the Whittemores obtained an unsecured, $2.5 million line of credit intended for business purposes and used the borrowed money to buy a home on the shore of Lake Tahoe in May 2004.
     When the Great Recession struck, the bank extended the loan several times to enable the Whittemores to repay the $2.5 million debt, but they transferred 75 percent ownership of the Lake Tahoe home to their children, to shield the home against debt, Bank of the West says.
     At about the same time, according to the bank, a business partner was pressuring Whittemore to repay $18.4 million he owed him. On Feb. 5, 2011, according to Whittemore, the bank says, the business partner called him and told him that “if he did not make a certain payment to [the business partner], he would personally fly to Reno and ‘break Harvey’s fu -ing legs.'”
     Also on Feb. 5, 2011, the bank says, Whittemore owed the bank a $250,000 principal payment on the loan, but “The Whittemores did not pay Bank of the West the money they owed that day.”
     The bank says Lakeshore House borrowed a total of $3 million from the Whittemore children in 2011, which Lakeshore House has not repaid. It claims that Whittemore created a bogus deed of trust in his Lake Tahoe home that he used as security two months after his children had transferred their ownership interest in the property.
     Although it initially was dated Jan. 1, 2011, the deed of trust wasn’t signed and recorded until June 2014, the bank says.
     “Because the obligation created between Lakeshore House LP and the Whittemore children memorialized in the deed of trust on the Glenbrook property … was fraudulent, it must be avoided,” under state law, the bank says.
     The bank calls Lakeshore House an alter ego of and controlled by Harvey and Annette Whittemore, whose sole purpose is to conduct all of their personal business, and own all of their “significant personal assets.”
     Those assets include boats, jewelry, wedding rings, fur coats and real property, and Lakeshore House protects them against the Whittemores’ creditors, according to the bank.
     The Nevada Supreme Court in March suspended Harvey Whittemore’s law license for four years, which doubled the state bar’s recommended punishment, for illegal campaign contributions to Sen. Reid in 2007.
     The bank asks the court to void the transfer of Harvey and Annette Whittemore’s assets to Lakeshore House and the deed of trust to their Lake Tahoe home, declare Lakeshore Trust to be the Whittemore’s alter ego, and award the bank the full amount owed, plus interest, attorneys’ fees, and legal costs.
     The bank is represented by Reno attorney Mark Gunderson, who could not be reached for comment Monday.
     No contact information was available for Annette Whittemore.

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