Con man misleads Hertel-Fowler bankruptcy trustee

June 12, 2009

By KAREN VELIE

Bankruptcy court trustees are investigating claims that businessman Rob Rossi and the City of Atascadero are concealing assets of developer R.W. Hertel and Sons in an attempt to help the bankrupt home builder avoid paying creditors and taxes.

Trustees began their investigations despite information that the man making the allegations is known to have duped Ross Perot, ABC’s Peter Jennings, and the FBI.

Scott Barnes is infamous for convincing Perot to drop his bid for the presidency due to information Barnes was accused of constructing. Barnes has a resume that includes serving time for fabricating evidence, illegal wire tapping, giving false testimony, and sending government investigators on wild goose chases, according to a Times article.

Nevertheless, Barnes appears to have a real claim against R.W. Hertel and Sons regarding faulty home construction. Along with two other creditors, Barnes forced the financially troubled contractors into involuntary bankruptcy on January 29 in an attempt to recoup a $42,000 debt.

A virtual pittance as Hertel asserted under oath that he personally guaranteed $145 million of R.W. Hertel and Sons’ debt.

Following R.W Hertel and Sons principles’ Ronald Hertel and Robert Fowler’s failure to appear at meetings of the bankruptcy court scheduled for April 6 and 22, bankruptcy trustee Sandra McBeth filed an emergency and ex-parte motion asking U.S. Bankruptcy Judge Robin Riblet to order the developers to appear at the next scheduled meeting.

“Due to the many allegations of impropriety and the inability to obtain information, the appearance of the principles Fowler and Hertel, are absolutely necessary and time is of the essence,” McBeth says in her motion. “Mr. Barnes has provided me with some information about the disposal of assets by the two individuals.”

As a result, in an uncommon action, Judge Riblet signed an order compelling Hertel and Fowler to appear in bankruptcy court or face possible arrest.

Hertel showed. Fowler did not. The court is allowing Fowler to make an appearance at the next scheduled meeting on July 29, before taking action against the elusive developer.

Hertel testified that he couldn’t remember, among other things, how many properties and jets he owned. Questions regarding his business dealings with Rossi and the city of Atascadero were frequently asked by trustee McBeth and an attorney for the creditors at the bankruptcy court meeting that lasted untill after 8 p.m.

Over the past 10 years, Rossi has entered into a number of development partnerships with Hertel and Fowler. Their last business dealing was in May 2008 when Rossi purchased “The Old Moose Lodge” property in downtown Santa Margarita from Hertel, according to San Luis Obispo county clerk of court records.

Barnes claims that Rossi and Hertel continue to have business dealings through “the many shell companies they operate.” He told a CalCoastNews reporter that numerous federal agencies were investigating Rossi including federal courts, the Internal Revenue Service (IRS), and the Department of Alcoholic Beverage Control (ABC).

However, Barnes failed to mention these investigations were prompted by referrals and protests he filed with the agencies. In addition, Barnes is the suspected author of dozens if not hundreds of blog posts that attempt to tie Rossi to fraudulent dealings.

“These claims are ridiculous and unfounded,” Rossi said. “They are beyond rational comprehension.”

Last month, Barnes lodged a formal protest with the ABC against Rossi’s liquor license transfer application. Barnes says he was interviewed by U.S. federal criminal agents regarding R.W Hertel and Sons in his statement seeking to compel the agency to stop the license transfer.

In addition, Barnes filed an informational referral with the IRS in which he claims Rossi is involved in political corruption, has made false deductions, and is a dangerous individual.

“Rossi has engaged in an operation to conceal assets of some of his associates and business partners including R.W. Hertel and Sons Inc. and Fowler in a variety of real estate scams and cons,” the referral says. “They are now in the process of having the ABC license changed from Hertel to Rossi to avoid taxes and creditors.”

In March 2007, Rossi purchased Hertel’s 50 percent interest in the Avila Village Inn. Though he transferred the property, Rossi said he forgot to change the name on the liquor license.

The class 70 license “authorizes the sale or furnishing of beer, wine and distilled spirits for consumption on the premises to the establishment’s overnight transient occupancy guests or their invitees. This license is normally issued to ‘suite-type’ hotels and motels, which exercise the license privileges for guests’ complimentary happy hour,” according to the ABC’s website.

Following the return of Rossi’s first transfer application due to a column containing a zero, Rossi’s executive assistant sent the request back with $1,165,994 as the total consideration, Hertel’s net for the inn, according to the notice of intended transfer.

The usual cost of a class 70 license is approximately $6,000.

Barnes also claims that Hertel is attempting to avoid taxes and creditors by transferring valuable property to the city of Atascadero. In January, a 54.4 acre open space offer of a partial dedication Hertel had agreed upon was transferred to the city. It was part of a 120 acre development the city council had approved.

The gift was considered mitigation for a residential development that has since been completed; Hertel had agreed to donate the land in question to the city for use as a park.

A tenacious investigator, Barnes is often described as a man unusually skilled at both uncovering true frauds and manufacturing others. He asserts that Hertel and Fowler have stashed $11 million in off shore bank accounts.

Court documents regarding Hertel and Fowler’s defaults on loans for jets and a yacht registered in the Cayman Islands, claim the pair is of “diverse citizenship.” U.S. Marshals seized the yacht because of concerns the pair would steer the ship from U.S. waters.

Hertel said under oath that he has owed the IRS $1.25 million since the 90’s. He hasn’t filed an income tax return in four years and claims he does not know how much he made last year.

“I don’t think so,” Hertel replied when asked if he had bank accounts outside of the United States.


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Member Opinions:

By: skyler on 8/11/09

You defend these thieves Charlie! Birds of a feather flock together…

What a pawn!


By: pixiebluesky on 6/22/09

no, skyler is simply a very lonely woman with a strange and scary obsession. (not unlike barnes) who investigates supposed “stories” and posts under several different names (not unlike barnes) who’s aim is nothing more than to slander the names of good people with whom she has had a private disagreement.


By: ANNEB on 6/20/09

A CMC Co told me of this story, I can only say you need to read this weeks Pacific Coast Business Times or some call it PacBiz from Santa Barbara, CA it is a very good business journal each week. One of the stories front and written by the Editor, tells a interesting piece about Santa Margarita Ranch and the dubious dealings with Bob Fowler and Ron Hertel and the mess they got going. The real key is farm subs seem to be paying back taxes for the Ranch owner Fowler, to me this is a story. You all need to read the story I picked it up here in Goleta but it is in San Luis Obispo.


By: Booty_Juice on 6/17/09

And the death spiral into the bottomless pit of pure insanity continues…


By: DeepBlueSLO on 6/16/09

I have a couple of questions. First, Barnes does not seem like a trustworthy guy, but how do we know the trustee was “mislead” as the headline suggests.


Second, is Barnes still a defendant in a blogging defamation lawsuit by (now deceased) Ed Palmer of Alan Little Custom Homes?


By: Afriendindeed on 6/16/09

Sounds to me like “shingh” is our friend Scott Barnes.


By: yelapop on 6/15/09

Obviously, the courts will have to sift through this mess in an effort to make sense of it all. But I enjoyed this story because I would like to believe that there is at least one developer out there on the up and up. Just the fact that Rossi may have been attempting to disentangle himself from Hertel and Fowler is a good sign to me.


By: nosedatruth on 6/14/09

It’s about time someone exposed this identity-thieving sock puppet (Barnes) for what he is.


By: skyler on 6/13/09

Karen did say that Barnes made these claims about the IRS, evasion,etc.. not her. She was citing his theories, true or not- we will see if the proof of those claims come out in court.


By: Cindy on 6/13/09

Oh my word. This Scott Barnes is quite a character and his history is a fascinating read. Looks like a couple of sociopaths have caught the attention of a probable nemesis! Oh well, “birds of a feather”.


By: mccdave on 6/12/09

Singh/Proof posts comments on the Tribune website under several names too, complete with his trademark “there/their” confusion and wandering question marks. But this could turn out like one of those movies where the paranoid schizophrenic actually blows the lid off the conspiracy between the Trilateral Commission and the Martian invaders.


By: Proof on 6/12/09

I agree with Skyler the document is a recorded fact, their is another one in May-2008 where Hertel and Rossi benefited on some Pension fund as well. But what I’m more interested in is the facts, you appear to make lots of unsubstantiated gossip and rumors, yet post no facts to back up what your saying. Please post the document where you say a IRS referral was made against Rossi ? you make some pretty crazy statements without any factual support. So where is the proof ? Post it so we can see what your telling us is true or just your desire to try and make a story. After all the Federal and State Court records in several states do show Liens and Federal and State Judgments against Mr. Hertel and Mr. Fowler. But I can’t remember how many jets, property I have ? You might ask Mr. Peter DeWitte’s Lawyer what they think of Hertel/Fowler his firm KITCO has lost millions to them. Please post the IRS allegation because making a false referral is a Federal Crime and so is giving false information to a Federal Trustee, yet I don’t hear or see any adverse action, and I am in a position to know. Where is your Proof? After all Skyler your correct it will all come out in the Courts and under Oath.


By: LMAOFUSB on 6/12/09

HAHAHA this is comical! “Shingh” and all of your many other “names”… who do you think you are kidding? It is pretty obvious what your real “identity” is…you are so transparent! It is good entertainment though, kinda like the CalCoast enquirer.


By: InTheKnow on 6/12/09

To Booty:

I don’t think it’s fair to put Hertel & Rossi in the same boat. It is obvious Barnes is trying to set Rossi up.

Hertel has been buying yachts & jets with unpaid tax debt since the 90’s. He has also failed to file a tax return for four years. I guess Hertel feels paying taxes is above him and lets the rest of us pick up his share.

Hi Scott, it’s nice to see you’re back.


By: Booty_Juice on 6/12/09

Hahahaha! Danny Drama returns. Another 20 or 30 outraged, delusional rantings under different names should soon be coming.


I love it.


By: Booty_Juice on 6/12/09

I think its funny as hell, one of the main reasons I visit this place – to see this obviously deranged mong post under dozens of different names with total impunity while he even gets Karen, obviously a thick ankled North County girl, to do his bidding.


Evidently it may be coming to an end, but then again considering the human bandwidth involved…


By: averagejo on 6/12/09

He has just recently set his sights on Rossi. I really feel for Hertel and Fowler he has been smearing their names and making their lives hell for over 5 years!!! How can (and why would) they defend themselves against a diabolical sociopath. It is good to see that the truth about him is being revealed. Hopefully Karen and all of the people and Agencies who he has duped and whose time and resources he has wasted will take heed. It makes me very angry to think of all of the tax dollars that I have paid into these public agencies that he has sent on “wild goose chases” to satisfy some sort of personal vendetta. HE ought to be investigated!!!!


By: InTheKnow on 6/12/09

I actually feel sorry for Rossi!

I linked to the stories about Scott Barnes.

He sounds absolutely frightening!

One site I went to called him a psychopathic con man.

I am glad he’s not after me!!!!


By: Lickadisplit on 6/12/09

To transfer the name it sounds like they had to report how much the recored transaction was since there was probably no amount associated to the license directly. Thats probably why Hertel’s name was never taken off, they never addressed it in the sale.


By: BeenThereDoneThat on 6/12/09

I love the Hertel’s comment about not knowing how many properties or planes he has. I can buy the properties part as a lot of developers could have a few dozen at a time but airplanes? Comon. I mean if he had more than 10 I could see that but I figure that is hard to believe. What maybe 3 at best?


On the liquer licence just being devils advocate, can these things be bid up? I know that a hard liquer licence may start around $30,000 for example but get bid up in lotteries, (because of being scarce) to $150,000 easily. I know the $6000.00 to a mil. is a bit of a stretch but I would give that it could go up some. I know that it is for Hotel’s etc. but do they limit them also?