Neil Bush’s Ex-Partner Hid Assets, Suit Says
A court-appointed bankruptcy trustee has charged in a lawsuit that former Denver developer Bill Walters hid assets from creditors by transferring ownership of six automobiles and more than $6 million worth of real estate to his wife.
Walters filed for personal bankruptcy on Nov. 1, saying he had liabilities of $279 million. He did not list any assets but told Congress at a hearing earlier this year that he had a “negative net worth.”
But in a lawsuit filed in federal court in Santa Ana on Friday, bankruptcy Trustee R. Neil Rodgers claimed that Jacqueline Walters and attorneys running the family trusts had “knowingly and willfully conspired and agreed among themselves to devise a common scheme and design to hinder, delay and defraud the creditors” of Bill Walters.
Bill Walters, a former business partner of President Bush’s son Neil, defaulted on about $100 million in loans from Silverado Savings & Loan. Those bad loans contributed to the thrift’s failure, which is expected to cost taxpayers more than $1 billion.
While Walters has claimed to be broke, he has continued to live a life of luxury. In recent months, he has resided in a $1.9-million Newport Beach home, a $1-million desert retreat in Indian Wells and a $250,000 mobile home on Laguna Beach. The properties are held in the name of his wife, Jacqueline, or in a trust in which she is the sole beneficiary.
Rodgers is asking U.S. Bankruptcy Court Judge John Wilson to seize the Southern California properties for the benefit of Walters’ creditors.
“What is apparent to us is the guy has attempted to make it appear that the substantial wealth he has accumulated isn’t his,” said Ronald Rus, an attorney for Rodgers.
Walters could not be reached for comment Wednesday and his San Diego attorney, Nathan E. Jones, did not return phone calls.
Rodgers’ suit claims that Walters either transferred ownership outright to his wife or secretly provided funds for the purchase of four properties in Colorado, three homes in California and six cars, including a Rolls-Royce and a Ferrari.
For instance, Rodgers claims that Walters gave his wife $250,000 to buy a Laguna Beach mobile home and provided $2.1 million to the trustees purchasing the Newport Beach estate for the trust that lists her as its sole beneficiary.
“Said property was transferred by debtor for the sole purpose of deceiving and defrauding debtor’s creditors,” Rodgers claimed in his lawsuit.
Some of the transfers were made just two days after the couple was married in 1986.
During a brief interview earlier this summer in the couple’s Newport Beach home--which features four bedrooms, three baths and a courtyard pool--Jacqueline said the family’s assets were hers. “He owns nothing in Orange County,” she said.
Rodgers has sued Jacqueline Walters and the trustees for conspiracy and conveyance of fraudulent transfers, claiming that Bill Walters sometimes transferred millions of dollars of his own money to her.
“Prior to her marriage to debtor, (Jacqueline) Walters was employed by debtor as his secretary,” Rodgers claimed in the lawsuit. She “does not have and has not had, at all relevant times herein, an independent source of income.”
Rus said the Federal Deposit Insurance Corp. is one of Walters’ largest creditors because of the Silverado defaults. “We think the FDIC is the largest creditor of the estate and so this is to the benefit of the taxpayers,” he said.
The failure of Silverado has drawn national attention because Neil Bush was a director of the institution. Bush is under investigation on conflict-of-interest charges for approving loans to Walters while the two men were partners in an oil exploration firm.
