\u201cMr. Wessels has been around for a while, he has done projects, although not in Hawai`i.\u201d \u2013 Alan Okamoto, attorney for DW `Aina Le`a<\/i><\/p>\n
In the eyes of the members of the Land Use Commission, the fact that Bridge `Aina Le`a had found a fresh face to take over development of the Villages of `Aina Le`a project near Puako, Hawai`i, was a definite plus. And this was a factor that Alan Okamoto, attorney for Robert Wessels, a principal of the firm DW `Aina Le`a Develoment, LLC, played up in his closing argument to the commission on August 27, when the commission was about to vote on whether to give life to the moribund project.<\/p>\n
\tGerald Takase, deputy corporation counsel representing the County of Hawai`i, also touted Wessels as a can-do person: \u201cWe have a new player involved. He appears to have the wherewithal to move forward at this time. The planning director and mayor are satisfied that this entity is viable and want to give them the opportunity to go forward.\u201d<\/p>\n
\tCommissioner Reuben Wong bought into the idea: \u201cAt one hearing,\u201d Wong said, \u201cI asked the deputy attorney general to look into the possibility, what does the law allow if there\u2019s a new player who can develop the property? We do see a new player coming on the scene in an attempt to make the project happen.\u201d<\/p>\n
Time-Share Litigation<\/b><\/i><\/p>\n
Actually, Wessels does have a history in Hawai`i. In the 1980s, his name was among the list of defendants in a lawsuit alleging time-share fraud brought by the state Attorney General. Other defendants included Ho`olae Paoa, one of the principals in Bridge `Aina Le`a, and brothers Joseph and Eugene Klein of Florida. State court records show that these men and others affiliated with a company called United Resorts, Inc., offered time-shares in the old Rocana hotel (now the Ewa Hotel on Cartwright Street in Waikiki) without registering or filing disclosure statements. In 1987, the state sued URI, four other closely affiliated companies, all based in Florida or Nevada, as well as five individuals (the Kleins, Wessels, Paoa, and Helen Brown), alleging that in addition to failing to register as time-share agents, the defendants, either singly or in concert, also \u201cengaged in deceptive or unfair acts or practices,\u201d \u201cdeposited maintenance fees collected from owners of time-share interests into accounts in Nevada and elsewhere,\u201d and \u201callowed owners of time-share interests to come to Hawai`i anticipating use of units \u2026 who were denied use because of the defendants\u2019 failure to retain units for owners\u2019 uses,\u201d among other things.<\/p>\n
\tBy the end of 1987, URI was in bankruptcy, and a year later, the state\u2019s lawsuit against it and other companies was dismissed without prejudice.<\/p>\n
\tHawai`i was not the only state whose attorney general was interested in United Resorts. According to an article published in the St. Petersburg Times<\/i> in April 1989, Joseph Klein was president of URI in 1984, when the state of Nevada issued it a permit to sell time-shares so long as a trust fund was established to receive funds paid by owners toward fixed expenses. In 1986, Nevada sued to stop URI from diverting money from the trust. \u201cAs a result,\u201d wrote Times<\/i> reporter Elizabeth Whitney, \u201cthe trust arrangement was tightened,\u201d but in March 1987, the state was back in court, this time charging URI with contempt for failing to comply with the trust agreements. Two months later, the company filed for Chapter 11 bankruptcy, sidelining the lawsuits both in Nevada and Hawai`i.<\/p>\n
\t\u201cAfter filing the bankruptcy,\u201d continued Whitney, \u201cKlein sold his shares in United Resorts and Robert Wessels became president. In December 1987, the court appointed a trustee to run the company. Some of the company resorts were foreclosed and more than 20,000 purchasers lost the week\u2019s access to the vacation resort for which they paid $5,000 to $7,000.\u201d<\/p>\n
\tIn a phone interview last month, Wessels said he was not aware of the Hawai`i lawsuit. As for his involvement in the failed companies, he said he had been asked to come in by a Nevada official \u201cto help straighten out the mess\u2026 I was one of the people who helped work out, get things squared away\u2026. You\u2019ll find my name in several reorganization things as well. That\u2019s one of the things I did for years \u2013 go in as court-appointed manager.\u201d<\/p>\n
\tWessels said he had little to do with Paoa. \u201cI met him at that time. \u2026 In part of the cleanup of things, I actually bought, my company bought a piece of property from United Resorts and provided several million to settle some of their things,\u201d Wessels said.<\/p>\n
A Superfund Site<\/b><\/i><\/p>\n
In 1993, Wessels started up Enviropur, a company that took over a troubled waste-oil recycling facility outside of Chicago. \u201cThere was a company called Moreco Energy, which operated a waste-oil refinery in Chicago,\u201d Wessels said when asked about his involvement in this business. \u201cThere were a number of sites where they\u2019d collected waste oil and they had enormous environmental liabilities. When it went into bankruptcy, they contacted me to help them work through the situation\u2026. I settled the environmental liabilities, developed a number of programs. I took it out of reorganization and took it public, listed it on NASDAQ.\u201d<\/p>\n
\tThe operation ran into trouble when, in September 1994, it accepted waste oil contaminated with PCBs from Argonne National Laboratory. \u201cThe company went back into reorganization after that,\u201d Wessels said. In December 1996, the Chicago-area operation was acquired at a bankruptcy court auction by ICHOR Corp., a subsidiary of Drummond Financial Corp., the senior secured lender.<\/p>\n
\tWhile the Illinois operation was slowed by having to deal with the Argonne waste, the company announced in 1995, most of its revenues came from operations of its California subsidiary, Enviropur West, which had waste oil facilities in Signal Hill and Patterson. By mid-1995, however, according to company press releases that quoted Wessels, Enviropur West was having financial difficulties, with one creditor demanding immediate repayment of $1.7 million loan. In March 1996, the company announced it had lined up a buyer for its California operations, the sale of which, it stated in a press release, \u201chas become essential due to increased pressure by the State of California to fund closure requirements.\u201d The sale would relieve the company of more than $17 million in liabilities, the company said.<\/p>\n
\tThe deal fell through. Enviropur West filed for bankruptcy in April 1996. In September 1996, the bankruptcy trustee in California abandoned the Signal Hill property, \u201cleaving behind tanks and drums containing approximately one million gallons of ignitable hazardous waste,\u0094 according to an Environmental Protection Agency fact sheet. \u201cThe site also included abandoned tank trucks and semi-trailers full of drums of waste.\u201d The final cost of cleanup \u2013 shared among federal, state, and city governments as well as nine private parties (not including bankrupt Enviropur) \u2013 came to about $4 million. Wessels, in the phone interview, said he knew nothing of the site having been abandoned. \u201cI was not aware of anything left behind there,\u201d he said. In any case, \u201cthe whole Signal Hill area is a Superfund site,\u201d he added.<\/p>\n
The Kenosha Casino<\/b><\/i><\/p>\n
Starting about 1994, Wessels and several other Chicago residents were involved in a company that planned to develop an $800 million casino in Kenosha, Wisconsin, just across the border from Illinois, to be run by the Menominee Indian Tribe. The proposal, for the third-largest Indian-run casino in the United States, was brought to a halt when it turned out that two of the principals had known ties to Chicago organized crime figures.<\/p>\n
\tUp until 1999, the company, known as Nii-Jii Entertainment, LLC, was making progress. It had acquired an option to purchase a dog-racing park, had won voter approval of a referendum in favor of the casino, and had agreements with state and Indian governments concerning profit-sharing. All that was needed was regulatory approval from Wisconsin and the Bureau of Indian Affairs.<\/p>\n
\tThen it all started to break down. Morgan F. Murphy Jr., a former member of Congress from Illinois, close associate of former Chicago Mayor Richard Daley, and one of the parties who had put the casino plan together, had once owned a television station with John Serpico. Serpico, head of the Laborers\u2019 International Union of North America, was indicted in August 1999 on charges of money-laundering, racketeering, soliciting kickbacks, and fraud. In addition, Murphy had been a partner in a real-estate and financing venture with Serpico and John Crededio, also suspected of ties to organized crime.<\/p>\n
\tAlthough neither Serpico nor Crededio was involved in Nii-Jii Entertainment, the fact of Murphy\u2019s association with him was enough to sink the project. According to a lawsuit brought by investors, \u201cMurphy\u2019s association with Crededio and Serpico disqualified Murphy from participating in [the casino] venture because regulatory authorities generally refuse gaming licenses to enterprises whose membership includes persons with either a past or current association with individuals of notorious and unsavory reputation, especially convicted criminals and those involved in organized crime.\u201d<\/p>\n
\tIn 2001, the investors sued Murphy and his law partner, Richard Boyle, and Murphy\u2019s son Morgan Murphy III, in Wisconsin circuit court, and by the time the trial ended, they had been awarded $244,947,709 in damages \u2013 the seventh largest award in the nation for 2005. Wessels, who had been hired as a consultant and who also had a stake in the company, was then sued in 2007 in the same Wisconsin court by largely the same parties, who sought more than $110 million in damages.<\/p>\n
\tWessels countersued, and also had the lawsuit moved to federal court, apparently not wanting to risk trial in the same venue that had awarded such a large amount in the first trial. In 2008, the parties worked out a settlement. Wessels said that he ended up receiving payment of $175,000. \u201cThe group owed me a fairly large amount of money in consulting fees,\u201d Wessels said, explaining that the lawsuit against him was motivated by the investors not wanting to pay him. \u201cI was going to collect my money and go after them\u201d in his countersuit, he added, \u201cbut then the attorney said it\u2019d cost me a lot of money, $500,000 to get $1.5 million.\u201d<\/p>\n
\tAs for his involvement with Murphy, \u201che has always been a very, very upstanding person,\u201d Wessels said. \u201cEveryone I\u2019ve ever talked to about Morgan Murphy, they\u2019ve always held him in very high regard. Anybody can accuse anybody of anything, but I believe it was a totally false accusation.\u201d<\/p>\n
\tAccording to the complaint filed against him, Wessels \u201cstyled himself \u2018General Manager\u2019 of the Kenosha casino development venture, was a long-time close associate of Murphy and at all relevant times was fully familiar with Murphy\u2019s background.\u201d The complaint accused them all of engaging in racketeering by having: offered membership in Nii-Jii without disclosing the risks arising from Murphy\u2019s background; \u201cbribed public officials and persons associated with them in order to influence their handling of regulatory and governmental decisions;\u201d \u201ccreated false payables\u201d that were \u201ccapitalized on the financial statements mailed\u201d to investors; and \u201clied to public officials,\u201d among other things.<\/p>\n
\tWessels described his role as that of project manager. \u201cI put the project together,\u201d he said. He also took credit for the successful campaign to win voter approval for the casino.<\/p>\n
A Stint in Macau<\/b><\/i><\/p>\n
In arguing for transfer of the case against him to federal court, Wessels stated that he no longer resided in the United States but was instead a permanent resident of Macau. Attached to the court records was a copy of his residency card.<\/p>\n
\tWessels was asked whether he continued to reside in Macau.<\/p>\n
\t\u201cNot any longer,\u201d he said. \u201cFor a three-year period I spent most of my time there. \u2026 I was putting together for a group of investors a hotel project in the peninsula of Macau \u2013 pulling it together, doing presentations for Merrill Lynch.\u201d<\/p>\n
\tHis work there is done now, he said. Because of the financial situation, he added, \u201cthe company that owns the land, they have delayed in going forward and building the hotel. But the government did publish the concession for the hotel to be built.\u201d<\/p>\n
\tWessels now claims his residency to be in Nevada.<\/p>\n
— Patricia Tummons<\/p>\n
Volume 20, Number 4 October 2009<\/p>\n","protected":false},"excerpt":{"rendered":"
“Mr. Wessels has been around for a while, he has done projects, although not in Hawai`i.” – Alan Okamoto, attorney for DW `Aina Le`a In the eyes of the members of the Land Use Commission, the fact that Bridge `Aina … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[168],"tags":[450],"class_list":["post-1217","post","type-post","status-publish","format-standard","hentry","category-october-2009","tag-aina-lea"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/1217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1217"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/1217\/revisions"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}