9/11 Sculpture At National Fire Academy
Embroiled In Alleged Fraud Scheme
AP 6/23/09
Now the 40-foot bronze statue
unveiled in November 2007 at the National Emergency Training
Center in Emmitsburg, Md., is for sale. A court-appointed
receiver and the sculptor, Stanley J. Watts of Kearns, Utah, say
they hope to raise at least $425,000 to repay investors in
Coadum Advisors Inc. - and perhaps have something left over for
the artist.
"I am still upside-down $150,000
on the project," Watts said in a telephone interview, referring
to what he owes his creditors.
In a complaint filed in January
2008 in federal court in Atlanta, the Securities and Exchange
Commission alleged Coadum raised $30 million by promising
investors returns as high as 6 percent per month. The SEC
contends it was a Ponzi scheme that illegally used money from
new investors to pay off earlier investors.
In a settlement about three weeks
later, Coadum agreed to cease operations, pay a
yet-to-be-determined fine and allow the court to retrieve as
much investor money as possible.
Coadum, controlled by James A.
Jeffery, of Belleville, Ontario, Canada, and Thomas A. Repke, of
Hollady, Utah, had U.S. offices in Alpharetta, Ga., and Salt
Lake City.
The receiver, attorney Pat
Huddleston II of Marietta, Ga., said he has recovered $4.1
million from domestic bank accounts and other domestic
investments.
Huddleston said he still is
trying to recover $18.8 million that Coadum transferred to
overseas accounts.
He said Coadum spent the rest of
the money on operating costs and domestic investments including
Idaho real estate, a plastic-bottle manufacturing company and
the statue, titled "To Lift a Nation."
According to court records,
Coadum contracted in April 2007 with Watts to create the
monument and donate it to the National Fallen Firefighters
Foundation, based at the federal training center in Emmitsburg,
about 70 miles north of Washington.
"According to Repke, Coadum hoped
to reap a tax deduction from the donation of the monument to
offset the enormous profits he expected the Coadum companies'
investments to produce," Huddleston wrote in a report to the
court.
Coadum paid Watts $300,000 and
incurred another $30,000 in expenses to promote the monument,
Huddleston said.
Watts said he and an associate,
Kim Korpany, each pocketed $10,000 for the piece, which he
valued in 2006 at $4.8 million. Watts said he gave a total of
$75,000 to two Sept. 11 charities, and the rest went for foundry
costs and other project expenses.
Watts said Coadum was to have
paid him more - he wouldn't say how much - after it got the tax
deduction. The SEC shut down the company before it could claim
the deduction.
Huddleson said the receiver's
asking price of $425,000 would ensure a reasonable return for
duped investors. If Watts finds a buyer willing to pay more, he
can keep half the difference, Huddleston said.
Regardless of whether it is sold,
the statue must stay in Emmitsburg under Watts' deal with the
National Fallen Firefighters Foundation.
Watts said he got permission from
the three firefighters to reproduce their likenesses and started
working on the statue long before securing financing.
Before the terrorist attacks,
"New York was like another country to me," Watts said. "But when
they raised the flag there, everybody that saw that picture,
their heart went zoom."
A
towering sculpture in the Maryland mountains depicting three New
York City firefighters raising the U.S. flag at ground zero was
financed by investor fraud, federal regulators say.
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