A string of lawsuits from Florida to California claiming more than $10 million in lost fees have been filed against a Westlake Village corporation, its owner and legal adviser, alleging fraud and misrepresentation in the form of an elaborate Ponzi scheme.
The suits claim that from 2008 through early 2010, defendants Nicholaus Skultety and lawyer Lloyd Michaelson were scamming millions of dollars from individuals and businesses across the United States by fraudulently promising to fund construction projects in exchange for an up-front cash fee of 2 percent of purported loans that this was done behind the corporate veil of American Paramount Financial, a private funding group.
Additionally, the cases allege that Skultety and Michaelson were siphoning funds from the American Paramount account, which held client fees, for their own personal expenses without any intention of ever financing a single project.
American Paramount, the suits charge, had agreed to refund the fees should the loan not close in a stated time, but delay tactics were engaged and the fees were rarely, if ever, returned in full.
“Did I do something stupid?
Yeah, I admit it. I f***ed up.”
— Nicholaus Skultety of American Paramount Financial
Plaintiffs in similar cases throughout the nation, including California, New Jersey, Florida and Arizona, who had sought loans ranging from nearly $1 million to $60 million, allege that “brokers” working for American Paramount directed them toward the corporation’s lending program by falsely misrepresenting the legitimacy of American Paramount. The suits also charge that allegedly Skultety, or sometimes Michaelson, would provide clients with fraudulent proof of available funds in a Wells Fargo bank account to prove they were financially capable of providing a desired loan, when in fact no such account existed.
“When this is all done and over with, it will be determined that people making complaints and filing lawsuits are dirty,” said Michaleson. “I do not open accounts for clients and I did not open accounts for American Paramount.”
Several plaintiffs have also filed suit against Wells Fargo and Cesar Nunez, a Wells Fargo “business banking specialist” who, at the time, was employed by the bank at a Los Angeles County branch. Nunez, the suits claim, assured clients that their initial fees would be secure and that American Paramount was a legitimate funding source. The lawsuits, however, charge that it was all part of an elaborate Ponzi scheme orchestrated by Skultety and Michaleson.
Nunez could not be reached for comment.
Skultety said clients came to him because of his contact at Wells Fargo.
“I didn’t solicit any of these clients,” said Skultety, who named Mark Snidero, of the Maryland-based Marjam Corporation, as the main broker who also referred clients. Snidero is also named in a number of similar suits. “These clients came to me. I didn’t come to them. All these clients could not get their deals done anywhere else. They knew that I knew shady people at Wells Fargo. Do the math.”
Cross-complaints have been filed on behalf of American Paramount and Skultety alleging that some plaintiffs used Nunez to acquire fraudulent, irrevocable cash-backed letters of credit in order to acquire the loans.
“If you’re an intelligent business owner and you can’t get your loans somewhere else for year after year, and you try and you fail and you know you don’t have the collateral, why would you pay money up front to get something done?” said Skultety. “On top of that, the fact that they’re suing Wells Fargo means they knew about it all along. They came to us and pitched us on going to the guys I knew at the bank to grease a deal through.
“Did I do something stupid? Yeah, I admit it. I fucked up,” Skultety continued. “I probably shouldn’t have got involved. . . . So they put the money up in a trust account to pay off the bankers, and everything was going smooth. It would have went down. But a lot of these clients are taking money from other people and making promises for years and years to get a deal done.”
Skultety would not comment on whether or not American Paramount ever financed a single project.
“If these clients were scammed, don’t you think they would have gone to the FBI?” he asked. “None of them did.”
Skultety also said that it was he who contacted the FBI about the “banker” who was allegedly assisting clients in securing false letters of credit for a fee to acquire American Paramount loans.
Various people involved with American Paramount, including some of the alleged victims, said they have been in contact with the FBI about the apparent loan scheme, but the local FBI office would not confirm or deny the existence of an investigation.
Several victims, however, said that after attempts to obtain reimbursement for their 2 percent fees proved fruitless, they told Skultety they would contact authorities. Skultety, they said, reacted with threats of violence.
A lawsuit between Nucommedia, LLC, a Delaware-based business, and American Paramount, filed in San Diego County Superior Court, claims that Skultety threatened physical violence upon plaintiff Gary Leeds and his family when Leeds wanted to discuss the return of his $150,000 fee after seven months of alleged delay tactics.
A source who wished to remain anonymous said that a Simi Valley broker recommended he seek American Paramount for a loan to save his business in late 2008.
“My business was failing and I only believed this could save me,” he said. “When you’re desperate, you believe.”
Yet, after paying a $45,000 fee and seeing nothing but delay from Nunez, Michaelson and Skultety, he lost his house, his business and nearly his marriage. When he told Skultety that he was seeking an attorney, Skultety, he said, became threatening.
“He is dangerous,” the source said, about Skultety. “I was threatened. I consider him a gangster.”
Skultety dismissed these claims as false.
Paul Connolly, a Florida-based entrepreneur, said a broker directed him to American Paramount after he was unable to secure real estate financing when the economy took a dive. He sought a $10 million loan, and the loan with Skultety “looked good.” He put $200,000 into a trust account under Michaelson’s name. For a year, the suit contends, Connolly was strung along without receiving his loan or a refund of his fees.
During the course of the year, Skultety invited Connolly to Westlake Village and put him up in the Four Seasons Hotel.
“Like successful crooks, he has a way of making you think he can fund this, but strings you along,” Connolly said.
Connolly visited the Westlake Village office of American Paramount. Michaelson’s law office was across the hall.
Connolly said that he eventually recovered his 2 percent fee through litigation. Also, he said, James Mesa was working in the office for Skultety as a broker.
Mesa, a developer known for his revitalization efforts in Downtown Ventura, is currently facing charges of felony grand theft in excess of $150,000 after the Ventura County District Attorney’s Office investigated a real estate fraud complaint filed April 20, 2009.
Both Skultety and Michaelson confirmed that Mesa worked for American Paramount. Skultety said that it was Mesa who introduced him to Snidero, who is alleged to be American Paramount’s main broker.
Mesa could not be reached for comment.
Anne Singer, a litigation attorney based in Agoura Hills, said that after successfully representing Connolly, she began receiving phone calls from other victims of American Paramount’s alleged fraudulent loan scheme.
“I personally spoke to 17 people who have been scammed,” Singer said, some losing up to $1 million. “Some are represented by counsel with lawsuits pending, and some received default judgments. Beware, people.”
Public records show Skultety’s apparent lavish spending via American Paramount. For the month of February 2010, a bank statement from JP Chase Morgan for American Paramount showed client fee wire transfers totaling $300,000. In the same account during that month, the lawsuits allege, Skultety accessed client fees for his own personal use.
The statement shows payment to Elite Aviation of $11,833 to rent a Learjet, which he supposedly took to Super Bowl XLIV from the Camarillo Airport with Michaelson and friends; a $4,166 “Home Mtg Auto Pay”; a $8,559 tab at Mastro’s Steakhouse in Thousand Oaks; and liquor store purchases totaling $1,100. The statement also shows the purchase of $14,774 worth of pool tables and related billiard equipment and $1,975 worth of “sport kilts” for an alleged Agoura Hills restaurant/bar venture, Pikeys Pub, formerly called Rockin’ Steakhouse, to which a $25,000 check was issued the same month.
Skultety said that though Pikeys Pub was his idea, he is not the financial owner. Michaelson, he said, is part owner of Pikeys Pub, along with a partner. A public records request to the city of Agoura, however, yields only the name of a Carlos Orozco on the business registration.
According to court documents, seven lawsuits are still pending. American Paramount has ceased operations.
“This is a complete proof of funds for a Ponzi scam,” said attorney Chris Whitelock, who is currently involved in litigation with American Paramount. “There were phony brokers helping him. He started to obtain these fees to make money off of it and then return the money. The Ponzi scheme style of it was to keep people coming through the front door. Nobody to my knowledge ever got funded. Fake documents, wire receipts, bounced checks, every scam in the book.”