Business

When former BSU assistant coach left town, lawsuits over business debt followed him

kgreen@idahostatesman.com

When former Boise State University coach Marcel Yates accepted a job earlier this year with the University of Arizona football team, his salary climbed by 50 percent. He now earns $500,000 per year as the Wildcats’ defensive coordinator and linebackers coach.

But to hear Yates talk about it, he barely has enough for pocket change.

Before he left Boise, Yates ran up huge debts at a failed used car lot, Platinum Motors, that he owned on West Fairview Avenue. Investors fronted more than $900,000 that they weren’t repaid.

“This lies on me. I understand that,” Yates wrote in a Jan. 5 text message to Torry McAlvain, president of the McAlvain Group of Companies and manager of KTMAC Investments, which loaned Platinum Motors $540,000. “I will get everyone their money back over time. I promise that.”

However, in documents filed in Ada County District Court, Yates says he doesn’t have money to pay back KTMAC and other investors. He said almost his entire Arizona salary goes to pay three mortgages on two homes he owns in Eagle; a rental residence in Arizona; monthly living expenses; an auto lease payment for his estranged wife, Melanie; and attorney fees.

Yates declined to comment for this story, referring a Statesman reporter to his Boise attorney, Terri Pickins Manweiler.

“As their attorney of record, I am not at liberty to give any client confidential information to you, and the Yates have not waived their attorney/client privileged rights,” Pickins Manweiler wrote in an email.

After talking to my wife, we both feel like it may be best for us to close the doors.

Marcel Yates, in a Jan. 5 text message to investor Torry McAlvain

Last month, District Judge Deborah Bail awarded $775,000 to KTMAC and a second investment company, Jaks Investments, in a suit against Marcel and Melanie Yates and TDY Inc., the corporate name for Platinum Motors. Another investor, Jeremy Gugino, won an award in August for $57,220.

Another lawsuit, filed by Boise West Car Wash, owners of the Fairview Avenue property, is pending. The Internal Revenue Service slapped a lien on Marcel Yates for taxes owed by the business.

On Friday, Ada County Magistrate Roger Cockerille ordered TDY and Marcel and Melanie Yates to pay the Idaho State Insurance Fund $1,653 for unpaid workers compensation premiums.

Platinum Motors

Yates played defensive back for the Broncos from 1996 to 1999 and served as a defensive coach for the team from 2003 to 2011. He then spent two years with Texas A&M before returning to Boise State in 2014 after Bryan Harsin replaced Chris Petersen as head coach.

Marcel and Melanie Yates registered TDY Inc. with the Idaho Secretary of State’s Office in August 2014. Together, the couple owned 55,000 of the 100,000 shares of stock issued by the company. Sales manager Mike McCormick owned 30,000 shares, and several other people owned the remaining 15,000 shares.

Platinum Motors opened at 119 E. 42nd St. in Garden City in fall 2014 before moving to 9801 W. Fairview Ave. in Boise the following June.

To pay for inventory, the company borrowed $540,000 from KTMAC Investments. The money was held in a separate account, with cash taken out whenever cars were purchased. When the cars sold, the money was repaid into the account, and liens placed on the car titles were removed.

The second Boise group, Jaks Investments, later loaned Platinum Motors $250,000 for the same purpose. Two other investors put up a total of $100,000.

The Yateses and McCormick made personal guarantees to repay the money.

It’s a debt that I have to pay back over time.

Marcel Yates, in a text message to investor Torry McAlvain

By November 2015, the company was experiencing cash flow problems. TDY failed to pay the state of Idaho $6,870 in property taxes due between that month and March of this year. The owner of the Fairview property, Boise West Car Wash, said in court documents that TDY didn’t pay $25,500 in rent due for January, February and March, plus payments for utilities.

In a series of text messages sent to McAlvain on Jan. 5, Marcel Yates said he and his wife were considering shutting down the business.

“Things are pretty bad,” Yates wrote. “We have so much due and nothing to pay it off with.”

Blaming general manager

Yates blamed McCormick for mismanaging Platinum Motors.

“He has really burned us,” Yates wrote in a text message to McAlvain.

McCormick, Yates claimed, began abusing the investment accounts after July 2015. Yates said McCormick used “false and misleading information” to obtain money for multiple vehicles. He said McCormick also withdrew money multiple times for the same vehicles, failed to provide vehicle titles to lenders and failed to submit payments to the Idaho Tax Commission.

McCormick denies doing anything wrong. He said the car company had two accountants and a controller, yet he got blamed. In court papers, he claimed Marcel and Melanie Yates used company funds to pay for personal expenses, including credit card bills and a car lease.

“I wasn’t in charge of the money. I wasn’t in charge of all of that stuff. I was the sales manager,” McCormick told the Statesman during a phone interview.

McCormick, the owner of West Coast Car Company, which formerly operated two used car dealerships in Boise, pleaded guilty in 2012 to money laundering. McCormick, his general manager and finance manager, admitted selling cars for cash to drug dealers and not reporting transactions of more than $10,000 to the Internal Revenue Service.

McCormick was placed on three years probation. The other men were sent to prison.

Marcel Yates also accused McCormick of selling two vehicles to another dealer for $28,500 and selling himself a 2002 Chevrolet Cavalier for $125 and pocketing the money. A judge later ordered McCormick to repay the entire amount.

McCormick was sued separately by the Yateses but did not fight it in court and owes them about $780,000, Pickins Manweiler said.

“The likelihood of collecting against him are slim to none,” she said.

McCormick is equally responsible for repaying the investors, but they have not taken legal action against him.

Marcel Yates gave up his ownership interest in Platinum Motors in July 2015, saying the company’s business operations were interfering with his coaching duties at Boise State, according to court records. He sold his interest in the 55,000 shares of company stock to Melanie Yates. At the same time, he resigned as president of the company.

Shareholders elected Melanie Yates to take her husband’s place as president. Within months, she said she learned of financial improprieties and took action. She fired the company’s accounting manager in December. That same month, shareholders fired McCormick and removed him as a stockholder.

Despite Marcel Yates no longer having an ownership interest in Platinum Motors, he continued to deal with inquiries by investors seeking payment.

In a Dec. 30, 2015, text to McAlvain, Yates said, “I need to find someone to buy the business or shut the doors and stop the bleeding and start paying you guys back.”

The company closed its doors last spring.

NCAA investigation?

In summer 2015, when Marcel Yates was trying to find a way to attract new investors in Platinum Motors, he arranged for former USC and New York Jets star wide receiver Keyshawn Johnson to come to Boise. Yates had Johnson, the top draft choice in the 1996 NFL draft, give a motivational speech to several Bronco football players.

Instead of meeting at Albertsons Stadium or Boise State athletic facilities, the gathering took place after hours at the car dealership owned by Yates.

In a complaint filed with the NCAA in February, McCormick claims Yates arranged a “secret meeting” with Johnson to entice the players to sign with Johnson’s sports agency.

Yates denies doing anything improper. He said he cleared the visit with the NCAA ahead of time and that Johnson’s appearance didn’t violate any NCAA regulations.

“McCormick’s allegations are wholly false and could lead to an investigation of Yates by the NCAA, resulting in disciplinary actions, up to and including termination of his position with the University of Arizona and difficulty working as a coach of any institution within the NCAA,” states a defamation suit Yates filed against McCormick.

Yates denied Johnson, who he described as a friend, was a sports agent, and Johnson’s name does not appear on a listing of sports agents published online by the NFL Players Association. Yates said there was nothing improper about having the players hear a motivational speech and meet with the former player, who now works as an analyst for ESPN.

The meeting did not violate NCAA rules, said Joe Nickell, assistant athletic director for media relations at Boise State. He declined to say whether head coach Bryan Harsin was aware of the meeting between Johnson and the players.

“McCormick’s allegations are not based upon any credible personal knowledge, cannot be substantiated and are being made for the sole purpose of retributions against Yates for his termination, expulsion from TDY and the resultant lawsuit against McCormick,” alleged the defamation suit, filed by Pickins Manweiler.

Emily James, associate director of public and media relations, said the NCAA would not comment on whether there is an active investigation into Yates’ activities. That’s a standard response from the agency.

District Judge Lynn Norton awarded Yates $7,810 in costs to defend himself against the allegations brought before the NCAA. However, the judge rejected an award for damages, saying he did not prove he suffered damage from McCormick’s statements.

McCormick said he doesn’t have the income to pay off any of his obligations. He’s been working odd jobs since he was fired from Platinum Motors and has been unable to find another auto sales job.

“They pretty much smeared my name,” he said.

John Sowell: 208-377-6423, @IDS_Sowell

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