This is an archived article that was published on sltrib.com in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
A 77-year-old Utah County grandmother is suing a group of developers, claiming she was swindled out of $600,000 after being promised a 15 percent return on a real estate project in Hurricane.
Patricia Tanner claims she was promised a profit by investing in the project, which advertised a designer golf course, bike paths and high-end lots, according to a lawsuit filed in U.S. District Court this month.
The suit names as defendants: Heath Johnston, Craig Lewis, Timothy Ross, Justin Johnston and the companies they represent: H&S Investments, Summit Development and Management, American Commercial Real Estate Specialists Group and Utah Commercial Real Estate.
It accuses the group —all are from Utah County — of violating federal securities laws and the Utah Securities Act, as well as committing fraud, civil conspiracy and breach of contract.
She claims the group persuaded her to sell five low-income rental properties she owns in Provo to invest in the development. The group brought her glossy brochures, a stack of pre-made checks purportedly for interest payments and fake paper titles for lots in Hurricane to convince her to close the deal, the lawsuit states, according to the suit.
The group failed to mention that the lots weren't approved for a subdivision, and that there was a $15 million lien against Tanner's investment property, the suit states.
When Tanner discovered she'd been swindled and the investment didn't produce a return, the men allegedly used their religion to persuade her not to sue them, the lawsuit states.
At a meeting with Heath Johnston in July, 2009, Johnston told Tanner that the real estate market crash had stalled the Hurricane project, but promised he would pay her back once he had sorted through his financial troubles, the lawsuit states.
He told her that "he believed in God, that he believed in an afterlife, and because he feared what might happen in the afterlife, he fully intended to pay back" Tanner's investment, according to the lawsuit.
He also said he had been "asking the Lord for help in keeping his company solvent so that he could repay his creditors" and said he believed the Lord had heard his prayers —so Tanner shouldn't worry, the lawsuit states.
Tanner agreed not to sue after that meeting,but reconsidered after a second meeting with Johnston in April 2010, when he revealed there were $10 million in judgments against him in connection with the failed project, according to the lawsuit.
Before she handed the group the $600,000, Tanner operated Tjinta Estates in Utah County, where she rented property to low-income families. The woman, a cancer survivor, spent her life managing the property. The lawsuit claims that the defendants preyed upon Tanner's vulnerability, knowing she was an "unsophisticated investor."
Tanner's lawsuit is asking $1.8 million —three times what she paid for the promissory note tied to the Hurricane project, according to court documents. The case is assigned to Judge Ted Stewart.