Wednesday, July 23, 2014

Betchley battle goes back and forth

From page A9 | May 21, 2012 |

Until a week before his first sentence modification hearing, Rick Betchley had been collecting volumes of data to prove his innocence. Testimonies, e-mails, IRS and FTB data and more comprised the stack of papers based on a case that started in 2006.

It started when Betchley asked a social group he was part of to invest in real estate. “It was appreciating like crazy,” he said. So, he collected money from his friends to build a home on a lot no more than 30 feet from Betchley’s own home in Serrano in El Dorado Hills.

His next effort was with PostShieldUSA, a company that makes metal houses for fence and sign posts, meant to make it easier to replace the posts. “We negotiated a deal through my shell company to acquire half stock in the company,” he said.

But then the economy collapsed, the real estate bubble burst and Betchley’s investors and friends became unhappy.

While the investors were losing money, Betchley was taking the investment money, shuffling it between his companies, and taking it out as a tax-free “loan,” Clinchard said in an interview with the Mountain Democrat. “He misappropriated money. He put it into (PostShield and Decata, Betchley’s shell company), then used it as his own ATM bank.”

This was in order to live what Clinchard said was an “extravagant lifestyle” in a multi-million dollar home with expensive art and two Ferraris. He also had a race car with his name on it, but Betchley claims that he owned the car before the events of the case, and it was a legitimate investment that was to later be sold for profit.

Betchley asked during the hearing how he could embezzle when more money was spent on the house than he collected from investors. Two different investigators in court testimony “stated that I spent more than I raised. It’s hard to embezzle,” Betchley said, when he spent $420,000 out of $400,000 collected.

For PostShield, Betchley said that Clinchard characterized the company as a scam, and that it did not sell any products. “A third party validated it all,” Betchley said during the hearing. “They were interviewed, but the interviews were kept from the defense.” Betchley claimed that “we’re starting to see a lot is being kept from us,” saying that while his attorney, Bob Blasier — who worked on the O.J. Simpson case — filed multiple motions with the District Attorney to obtain information, they were never fulfilled.

“PostShield sells daily to Home Depot,” Betchley said during the hearing. A quick search on Home Depot’s Website proves the product is indeed available. “We’re a vendor with Lowes. Mr. Clinchard claims it’s a scam, but that’s not true.” He also said profits have gone up 900 percent.

Clinchard denied this, both in the courtroom and in an interview afterward. “I think (the company) is real, that it does real business, but that he overstated the business, which is a material misstatement and security fraud,” he said.
Betchley pitched to investors that CalTrans was interested in the product, and had testimonials as such.

While Clinchard and investigators contacted those who were quoted by Betchley, who then said they never gave the quotes, Don Olson of MODGroup, the public relations firm for PostShield, said he was at the board meeting where a CalTrans official claimed he wanted the product. He wrote in a letter that in a meeting with Steve Takigawa of CalTrans, “Takigawa asked Rick Betchley for a quote for 75,000 Postshield’s (sic). Rick Betchley later gave Takigawa a proposal of 100,000 units in response to the request for quote from Takigawa.”

John N. Kitta, member of the State Bar and director of PostShield, also sent a letter to DA Vern Pierson saying it it was “abundantly clear that PostShield has made sales to CalTrans.”

“I never said it was not real,” Clinchard said. “Just that it was never as big or as good as he claimed.”

Finally, Clinchard filed charges that Betchley hadn’t paid taxes for years. Betchley showed a document from the FTB stating that, for the years he is charged with, he only owed a total of $521 for 2007, but, due to an overpayment in 2006, only owed $274.39, an amount so small that he should not be charged. “I paid it within five days, and the FTB confirmed it was accurate and paid,” Betchley said during the hearing. He also said the only mistakes the IRS could find in 18 years were two overpayments. He also said H&R Block confirmed his payments.

Betchley also claimed that Clinchard knew this the entire time, due to Clinchard being at Betchley’s bankruptcy hearing, where taxes must be filed and on record.

Clinchard claimed the document was fabricated, and that Betchley had “hundreds of thousands of dollars in income.” He said in a later interview that Betchley likely lied on his FTB forms, saying he had no income due to the embezzlement of funds. “The FTB said they were fake loans” and did not pass a 10-point test. “He calls it a loan, but it’s not a loan…He never pays it back, they are losses for the corporation,” which means less taxes for Decata.

But the case goes deeper than just the charges and possible perjury. Betchley provided printouts of e-mails that he says proves the DA is taking money from contributors in exchange for getting a certain outcome of a case. Betchley claimed that this case is the first test of the real estate fraud team the DA put together, making a win prove its worth. Add in an attorney that Betchley claimed would quit if he didn’t plea who was eventually replaced, and the case becomes a deep rabbit hole.

One side claims perjury, corruption and documents being withheld from them during the court case, while the other side claims the defendant is simply a con man. Clinchard thinks that, while it’s not satisfying to the victims, Betchley will keep his plea deal of a year in county jail rather than risk 10 years in state prison. “He took the deal. He knew he’d be found guilty. He had two attorneys to advise him, expert attorneys,” he said. “I’m ready, willing and able … to go to trial.”

It remains to be seen what Betchley will do. No further hearings are currently scheduled, but what Betchley said at the end of the hearing may provide a clue: “Mr. Clinchard, when you stop telling lies about me, I’ll stop telling truths about you.”



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