Sherman Unkefer – Xango Hit With A $53 Million Law suit

 

Sherman E. Unkefer III's years of living lavishly at the expense of his many fraud victims appear finished. No more investments in gold companies, no more international travel — unless it's as a fugitive.

The 69-year-old gold-and-juice millionaire from Scottsdale — whose infamous white-collar criminal case in Maricopa County Superior Court still is open and active after nearly 30 years — apparently has met his match. County Attorney Bill Montgomery has put a forfeiture sharpshooter on the case: Reid Pixler, formerly of the Arizona U.S. Attorney's Office and the man who set up a successful court system in Mosul, Iraq.

Pixler's now a prosecutor in Montgomery's office and is nailing Unkefer on behalf of at least 1,334 victims. There may be hundreds more.

Montgomery and Pixler are going after Unkefer and his associates for treble damages — nearly $54 million — in a newly unsealed civil RICO court action. Unkefer's company and assets have been put in receivership. A special web page has been created on the County Attorney's website to let the public know what is happening with the case and, it's hoped, attract further victims who may yet see some of their losses repaid.

New Times has followed the sordid story of Unkefer and his ex-gold-dealing partner, Jim Clark of Republic Monetary Exchange, since learning in 2010 that the two were back in business. They provided the foundation for a cover story on the modern-day gold craze, which since has died down.

The article exposed Unkefer's previously secret connection to Clark's high-profile business at 40th Street and Camelback Road. Those with long memories may remember that Unkefer was infamous as the scoundrel behind the 1982 collapse of billion-dollar Phoenix gold firm North American Coin and Currency. He'd received a 10-year prison sentence in 1989 for his role in ripping off clients. Hundreds of bags of silver or gold coins in the company's vaults had disappeared.

Now-retired Judge Gloria Ybarra told him during sentencing that he had a lack of concern for his former customers, many of whom suffered severe financial losses, and she was making an example of him because she felt too few white-collar criminals saw the inside of a prison.

But after his release from prison in 1996, Unkefer made a second fortune in a shady multi-level marketing scheme in the 2000s, structuring his assets to dodge a $7.5 million restitution order left over from the gold scandal. (The amount was the maximum allowed under state law; actual losses for victims exceeds $18 million.)

New Times published a follow-up cover story and several blog posts on Unkefer and Clark since the original piece. Unkefer's stepson, Mark Davidson, named as a key information source in court documents referring to the still-sealed 173-page complaint, says he credits our 2010 exposé on the business partners with inspiring him and his brother to keep digging into Unkefer's long paper trail, the suspicious contents of which were then handed over to county prosecutors, leading to the new civil action.

The County Attorney's Office has been on the case since 2007. Three years before our first article, the MCAO remembered that Unkefer should have paid restitution from his criminal case. Prosecutor Davina Bressler, initially assigned to the case, was replaced by Pixler as it grew in complexity.

Unkefer and his late wife, Sharon, had set up a trust fund to protect the fortune they'd made through their highly successful XanGo Juice distributorship. In 2008, Unkefer used $200,000 from the trust to become a partner in Republic Monetary Exchange. Though Unkefer had written personal checks for the 30 percent investment, Clark later turned on his partner, whom he told New Times was a close, personal friend.

Clark was Unkefer's right-hand man at North American Coin and Currency, but he escaped punishment after that business went bankrupt, leaving thousands without their bullion. Clark also served prison time — eight months for scamming clients at his own gold firm, Sheffield Metals. He'd been banned from the gold business until 2006. Unkefer sued Clark in 2012 for allegedly failing to pay him agreed-upon profits from Republic Monetary Exchange, and Clark's son, Jim Jr., defected to Unkefer's side.

It wasn't just New Times that inspired the Davidson brothers to dig through the labyrinth of business documents discovered in their own lawsuit against Unkefer — for a while, Clark had paid them to do it, according to Mark Davidson, who lives in California. He and brother Harley, a Valley-based musician who plays in the San Diego voodoobilly band Deadbolt, believe Unkefer hastened their mother's death in 2008 by failing to get her proper medical care, instead relying on the supposedly miraculous powers of XanGo Juice.

That snake oil killed my mom, Harley told us in 2012.

The Davidsons' suit targeted not Unkefer exactly but Mango Trust, which Unkefer had shared with their mother and which was managed by San Diego attorney Todd Hall and the law firm Teeple Hall. As part of the discovery in that case, the Davidsons were sent a document dump  . . . it was like an Encyclopedia Britannica with all the pages mixed up, Mark Davidson says. They sent us stuff they didn't think we'd go through. I went through every single page.

In court documents unsealed earlier this month, Pixler states that as the county prepared to litigate the slow-moving restitution case against Unkefer, he began to receive new evidence from Mark Davidson that the Mango Trust was used by Unkefer to conceal potentially as much as $20 million from victims, creditors, the government, including the IRS; and the [county Superior Court], records state.

Though the complaint remains under seal, Pixler reveals in one court filing that it shows Unkefer used family members and professionals to conceal income from their XanGo company, apparently moving assets to countries around the world — including Malaysia, Switzerland, South Africa, and Caribbean nations.

Pixler told the court that Unkefer had tried to raid the assets of Mango Trust, and further evidence revealed that he and his girlfriend, Laundy (his former daughter-in-law), were planning to flee the United States.

The county RICO complaint also alleges that Unkefer used a hidden cache of precious metals and coins believed to have been stolen from NACC [for] expensive cars, jewelry, and travel, according to the County Attorney's Office.

Named in the complaint are Unkefer, XanGo LLC, Mango Trust, Mango Ltd., Laundy Unkefer, Grant Teeple, Todd Hall, Teeple Hall LLP, Theresa Lee, Adrian Taylor, Jean-Luc Merat, Jerry Whitmore, Richard and Karol O'Brien, a foreign fiduciary company, Derrick Raynes, Raynes' wife, and Alexandria Monique Unkefer Raynes.

[Unkefer] has finally run out of tricks, Montgomery said in audio released from his office.
We intend to vigorously pursue him and his co-conspirators to recover funds his victims are entitled to and to impose an appropriate penalty for his efforts to evade his court-ordered obligations.

Source: www.blogs.phoenixnewtimes.com