February 17, 2003
Donald E. Powell
Federal Deposit Insurance Corp.
550 17th St. NW
Washington, D.C. 20429-9990
Re: In re Gary Bradley, 02-12741-frm (Bankr. W.D. Tex., Austin Division)
Dear Chairman Powell:
Last Thursday, the day before the deadline, the FDIC filed an objection to the dischargeability of the bankruptcy of Gary Bradley. Bradley owes the FDIC in excess of $73 million and he is attempting to discharge in bankruptcy as much of that as he can. The FDIC has objected to the discharge only on grounds of fraud and other conduct by Bradley during and immediately before bankruptcy was filed last year. FDIC did not object to discharge on grounds that Bradley had committed fraud in connection with the original loans in 1985.
Save Our Springs Alliance over the past six months has urged FDIC to object to discharge on grounds of fraud relating to the original 1985 loans for the Circle C development. We provided your agency with documents. We identified witnesses for you to contact. We created a webpage which reproduced a wide array of court records evidencing loan fraud committed by Bradley. The lending bank, in whose shoes FDIC now stands, years ago objected to the bankruptcy discharge of Bradley’s partner by filing detailed allegations of fraud committed both by Bradley and his partner.
Yet in Bradley’s bankrutpcy, the FDIC (before Friday’s deadline passed) did not even make the same allegations regarding Bradley’s fraud that had earlier been made by the bank. Without even bothering to contact the key witness or look at all relevant documents, the FDIC has now passed up the opportunity to collect more than $73 million based on Bradley’s fraud committed at the time of the 1985 loan.
For justification, the FDIC cannot honestly assert that pursuing the loan fraud claims would be too complicated or expensive or difficult; the FDIC has passed on the opportunity to have others pursue the loan fraud claims against Bradley on behalf of the FDIC. Persons associated with SOS Alliance had earlier offered to pursue the loan fraud claims against Gary Bradley for a contingency interest in the recovery. But FDIC was unwilling to move forward even on that basis.
In the past, Bradley has made a monkey out of the FDIC. In 1994, the FDIC sold an earlier claim against Bradley for one-third its value to a Panamanian corporation owned by one of Bradley’s business partners, Hamid Noshirvani. Noshirvani then obtained a consent judgment against Bradley within a week after filing suit and thereby took possession of Bradley’s record assets right before FDIC’s Circle C judgment became final – thereby forestalling immediate collection of the Circle C loan judgment by FDIC. Not surprisingly, assets acquired by Noshirvani in 1995 by now have found their way back to Bradley through Bradley’s Lazarus Trust. (As of last year, the Lazarus Trust had hired to defend itself against the FDIC the very lawyer who had previously represented FDIC’s predecessor bank and who had filed the court pleadings accusing Gary Bradley of fraud.)
By refusing to pursue loan fraud claims, has the FDIC now made it possible for Bradley to get away without paying all or most of the $73 million owed? To adequately protect the taxpayer’s interest in full recovery against Gary Bradley, your agency must prevail on the bankruptcy-fraud objections to discharge that you did file on Thursday. If your agency does not prevail on these limited claims, the FDIC will be demonstrating once again that if you are Gary Bradley you can take hundreds of millions of dollars from the federal government with impunity – and if you are Gary Bradley you can pick and chose which laws you want to obey, whether they be municipal, state or even federal laws.
Taxpayers are watching.
cc: Sam Taylor
Hon. Lloyd Doggett
Save Our Springs Alliance
P.O. Box 684881, Austin, Texas 78768