WEST PALM BEACH (CN) - Investors say a felon defrauded them of $2.5 million for a putative Utah ski resort called Powder Mountain. Thomas C. Strauss allegedly claimed to be an heir of the Guggenheim family, with control of their multibillion-dollar trust, told the seller he would buy the resort in Eden, Utah for cash, but told the plaintiffs he needed a loan.
The investors claim that Strauss ran the Stone Creek Investment scheme with Arnold P. Mullen and Strauss' longtime lawyer, Marvin Rosen.
FDB II Associates LP sued Stone Creek Investment Co., Powder Mountain LLC, Thomas C. Strauss, Arnold P. Mullen, Marvin S. Rosen, and Ruden McClosky Smith Schuster & Russell, in Federal Court.
Strauss, of West Palm Beach, allegedly pleaded guilty to a felony credit charge in 1998 and was ordered to pay $2.5 million in restitution.
Mullen, of Palm Beach Gardens, is described as a principal in Stone Creek and Powder Mountain.
Rosen is described as a principal and agent of Ruden McClosky "and has represented defendant Strauss for decades."
Strauss allegedly tried to rush through the purchase of the Eden property in the summer and early fall of 2006, and fraudulently induced FDP to pony up the money by claiming "we will only have 10 Founders" who "will be selected on a first come, first served basis," and FDP had to pay up to "assure yourself of a place in the line."
In truth, FDP says, it and one other party were the only "investors."
Straus allegedly tried to rush through his putative purchase of the property from Western America by claiming "that he was an heir of the Guggenheim family, which according to Strauss derived its income from 18th century European banking empires. Strauss further represented to Western America that he had significant control over the multibillion-dollar Guggenheim Trust's investment decisions and that obtaining approval to purchase the Powder Mountain ski resort for cash would be a mere formality."
FDP says Strauss manufactured disputes with Western America to delay the closing, during which time Strauss took its $2.5 million. Western America sued Strauss in January 2007, FDP says, but it did not hear about any of the disputes, the cancellation of the sale, or that lawsuit until months later. In fact, it claims that the defendants kept insisting they would open the resort even after the sale had been canceled and Western America had sued them.
Plaintiffs are represented by Steven Katzman of Boca Raton.