A former business partner of Coltsville developer Lance Robbins makes new allegations in court
June 15, 2010
The California businessman who last year won a $29 million lawsuit against Lance Robbins of the Coltsville project is back in court with a new lawsuit accusing Robbins of racketeering.
Frank Gamwell claims in his second lawsuit that Robbins first cheated him in business dealings they had together, resulting in the $29 million judgment Gamwell won in California Superior Court, and then fraudulently transferred all of the assets out of two companies — Rehabilitation Associates, LLC and Fedora Investment Corporation — that were the targets of that gigantic judgment to avoid paying.
Robbins is the latest developer to take on the challenge of resurrecting the Colt factory in Hartford’s South Meadows. He denies Gamwell’s allegations and points out the racketeering lawsuit was dismissed in federal court in Los Angeles. He says he is also appealing the original $29 million judgment against him.
But what Robbins failed to say is that the judge who dismissed Gamwell’s lawsuit also gave him 21 days to file an amended complaint that would comply with federal guidelines for the so-called RICO (Racketeering Influenced and Corrupt Organizations Act) claim Gamwell is making against Robbins.
Gamwell’s attorneys originally filed the lawsuit in state court, where it met with state guidelines, but when Robbins got the case transferred to federal court the lawsuit failed to meet stricter federal guidelines, which led to its partial dismissal.
In her June 7 ruling, U.S. District Judge Dolly M. Gee kept open the three-week window ending June 28 for Gamwell’s attorneys to modify and refile their lawsuit, saying its allegations “suffice to describe a pattern of racketeering activity.”
“While some of Plaintiff’s discrete allegations of racketeering activity may lack the necessary specificity … they do not fail to allege a pattern capable of continuing into the future,” writes Gee in her decision.
Gamwell says his attorneys will amend his lawsuit to satisfy federal guidelines and refile it before the deadline granted by Judge Gee.
In a phone interview last week, an annoyed Robbins charged the Advocate, which first reported on the $29 million judgment against him last December, with “materially harming” the city’s efforts to establish a national park at Coltsville, as the Colt factory and other Colt buildings are known, by continuing to report on Gamwell’s allegations. The National Park Service designated Coltsville as a National Historic Landmark in 2008, the first step toward becoming a national park.
“You are being manipulated,” Robbins said of the Advocate, echoing his comments last December that Gamwell was trying to use the Advocate to pressure him to pay a judgment he couldn’t otherwise collect.
Robbins maintains the $29 million judgment granted by a California arbitrator wasn’t against him, but against Rehabilitation Associates and Fedora, both of which, he said last December, are “broke” because of the down economy.
Gamwell alleges the two companies are broke only because Robbins fraudulently transferred their assets, including at least $3 million in cash, elsewhere. His lawsuit claims that through a web of some three dozen companies — including Rehabilitation Associates and Fedora — Robbins, together with family members and a few long-time employees, has a “long history of victimizing, defrauding and extorting tenants, business partners, creditors, governmental agencies, the judicial system and others.”
“Over the course of about twenty years, their racketeering activities have included countless criminal violations of mail fraud, wire fraud, extortion and money laundering statutes, among others,” alleges the lawsuit. “Their scheme is built around the fraudulent artifice that the participants in the Robbins Enterprise act independently of each other when in fact they all are working in concert under the domination and control of Lance Robbins.”
Gamwell alleges that the Robbins Enterprise has been able to “extract tens of millions of dollars from its victims with virtual impunity,” and says he’s been victimized twice.
The first instance, states Gamwell’s lawsuit, was proven in Los Angeles Superior Court, leading to the arbitration that produced the $29 million judgment against Fedora and Rehabilitation Associates. It involved a project Gamwell’s Oxford Street Properties, LLC, and Robbins’ Rehabilitation Associates, LLC, undertook in an equal partnership in 2003 to convert a historic building in downtown Los Angeles into condominiums. Later Fedora Investment also got involved in financing the project.
Over the next four years, says Gamwell, Robbins consistently maneuvered him into the position of being solely responsible for the project’s expenses, bringing him close to the point of financial ruin, then nearly bought him out before Gamwell refused to sell and went to court.
Arbitrator Richard Chernick agreed with Gamwell’s version of events and awarded the $29 million judgment, including $10 million in punitive damages, for losses associated with the joint project. In his decision Chernick wrote that Rehabilitation Associates, Fedora, and Robbins, as their agent, acted fraudulently toward Gamwell, “scheming to acquire the property by financial oppression and a course of malicious dealings intended to so weaken Oxford and Gamwell that they were unable to protect their interest in the property.”
The second instance in which Robbins victimized him, Gamwell alleges, resulted in his second lawsuit. Once the $29 million judgment against Fedora and Rehabilitation Associates came down, the Robbins Enterprise swung into action, according to the lawsuit.
“Realizing that Rehab and Fedora were about to be held liable … the Robbins Enterprise fraudulently and systematically placed false liens on the assets of Rehab and Fedora, created false debts owed by Rehab and Fedora to other Robbins Enterprise Participants, fraudulently transferred all of Rehab and Fedora’s many millions of dollars of cash and real estate to other Robbins Enterprise participants, and then had 40 other Robbins Enterprise participants fraudulently foreclose on virtually all the remaining assets of Rehab and Fedora …” alleges Gamwell’s lawsuit.
The end result, says Gamwell, is that Rehab and Fedora were rendered “insolvent and judgment proof,” and his $29 million judgment against Robbins remains unsatisfied.
Meanwhile, U.S. Senators Christopher Dodd and Joe Lieberman, and U.S. Representative John Larson are solidly backing Coltsville, recently introducing legislation to make it a National Historical Park.
Last week, Dodd testified before the House Natural Resources Subcommittee on National Parks, Forests, and Public Lands, saying Congress has “a unique opportunity to tell the story of America and how this nation became an industrial power by including Coltsville in the national park system.”
“Coltsville is an historic treasure in our community, one that should be shared with the rest of the country and the world,” says Larson. “While I don’t have a role in the specifics of development for the area, I will continue to work to make the dream of a national park here a reality.”