A Meridian property management company that oversees at least 200 Idaho properties owned by plaintiffs in a new lawsuit is accused of fraudulently moving or taking up to $ 1 million from the property owners it contracted with.
The lawsuit, filed June 11, alleges that Paradigm Property Solutions LLC , through its owner Ronald Jaques, took as much as $750,000 to $1 million from property owners' trust accounts and moved it to other accounts without permission.
Bank records show that the accounts meant for trust, operating costs, maintenance costs and payroll had large transfers to a savings account and check withdrawals. The lawsuit's allegations include fraud and claims that Jaques converted, commingled and exercised personal dominion over funds that Paradigm Entities was bound to hold in trust for the plaintiffs and their tenants.
Much of the money that came into Paradigm came from rental tenants' security deposits, which is used for cleanup and repairs on rentals, and then the remainder should be returned to the tenant.
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Plaintiffs include six limited liability companies holding property, managed by Eric Uhlenhoff, in the Treasure Valley. Those include T Street LLC, Doheny LLC, Trestles LLC, Oaklands LLC, EJC LLC, and EUDA LLC. Heron Family Trust with trustee Tammara Heron, and Silver Fox Management LLC are also listed as plaintiffs.
The property owners had contract agreements with Paradigm Property Solutions that outlined Paradigm's responsibilities for things such as handling repairs, maintaining lawn care, ongoing insurance, and other operating costs on the rental properties.
In a court document filed Friday, Uhlenhoff states that he began noticing the accounting problems when a painter working on one of his properties said he had not been paid. On June 7, Uhlenhoff, Heron and others met with Jaques and determined that Paradigm should have more than $1 million of the property owners' money.
Jaques showed a balance of just $17,388, according to the court records.
At a Wednesday court hearing before District Judge Steven Hippler, most of the discussion revolved around the whereabouts of the money that was supposed to be in trust accounts. There was a lengthy back-and-forth between the judge and Jaques' defense attorney, Chad Moody.
The plaintiffs in the lawsuit asked that any money left in the accounts be frozen by the judge. Moody asked that money unrelated to the plaintiffs' properties remain accessible to Jaques.
Quickly countering Moody's request, Hippler noted that Jaques did not provide the court with his financial information about expenses and income sources, as was ordered. Jaques also did not appear in court.
"Why is he not complying with my order?" the judge asked.
"I don't have an answer for you," Moody responded.
"Where is he today?" Hippler asked.
"I don't have an answer for you, your honor," Moody said. The defense attorney said his law firm attempted to contact Jaques on Tuesday and was unsuccessful.
Hippler continued to explain that Paradigm's sole job was to pay people who cared for and maintained the rentals with the money Paradigm received from property owners, including the plaintiffs.
"Where is the money?" said Hippler.
Moody said there is no evidence that the money went to Jaques' personal accounts.
"Well, I don't know what he did with the money, but where did the money go?" Hippler said. "The money came out of the accounts without being paid to the people it was supposed to. Your client can't hide behind entities if he's personally stealing the money. It's not a defense."
Moody argued that the lawsuit accuses Jaques of improper conversion of money, but there was no evidence that the funds went to Jaques' personal account.
"Well, whether it went to his personal account, or whether it went to his pocket and to his bookie, or whatever the situation is — it's still conversion," Hippler said.
Paradigm has contracts with at least 200 properties across Idaho owned by the plaintiffs, according to the plaintiffs' attorney, Skip Sperry. Not all of Paradigm's contracted property owners are named in the lawsuit, meaning there are likely other properties that Paradigm managed.
Judge Hippler mandated that a receiver be assigned to handle future expenses needed for property by the end of Wednesday.
Moody told the court that he anticipated a bankruptcy case for his client would be filed soon.
According to Paradigm Property Solutions' website, the company manages student housing, storage units, multifamily residences, single-family residences and commercial work across Idaho.
A call and email sent by the Statesman to Paradigm Property Solutions on Tuesday did not receive a response.
A new court date in the case has not been set.