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Litigation Utah-Style - the Hatch-Jenson (Robbins) Connection - Updated
Monday, December 07 2009 @ 04:10 PM EST

If you are finding the Pelican litigation impenetrable, all I can say is, so am I.

But in my efforts to figure it out, I came across an interesting detail. It seems Brent Hatch's law firm, which represents SCO, also represents Marc Sessions Jenson, a business partner in at least one deal with Mark Robbins, the plaintiff in Pelican. Jenson and Robbins are co-defendants in a litigation currently before Judge Ted Stewart, the judge now assigned to SCO v. Novell, a case titled Hansen, et al v. Bk One UT NA, et al. I know. Utah is a small world indeed.

Might that Hatch-Jenson connection to Mark Robbins be at least part of why Darl McBride was let go, I can't help but ask? How could Hatch represent SCO, with McBride at the helm, and also represent Jenson, whose business associate, Mark Robbins, is suing McBride in New York State in the Pelican mess? I don't know if they are still associates, but it's awkward, no?

Wait. There's more.

The Pelican claims sounded, frankly, weird to me when I first read them, including claims of Darl McBride and Robert Brazell setting up a website to defame Robbins. What legitimate businessman would do something that stupid, I wondered? And yet, look what I just stumbled upon in the Deseret News. A criminal case settled last year in Utah involving Jenson. Hatch's firm represented Jenson in that matter, too, and he is individually named as participating in the matter in numerous media accounts. The case is every bit as weird as anything in Pelican, with accusations of fraud, racketeering, reputational attacks on witnesses, and political pressure.

The criminal case against Jenson ended up in the lap of the Attorney General Mark Shurtleff. From the Deseret News article:

Shurtleff said he was threatened almost immediately by Jenson supporters, who contended the charges were political. For example, he said he received a made-up headline apparently as a threat of what he might someday read in a real newspaper saying, "Shurtleff prosecutes innocent man on behalf of campaign contributor."

He said Jenson and people who know him "brought extraordinary pressure, nothing I have seen before in criminal prosecution, to get charges dismissed."

Shurtleff said, "They've hired people who are lobbyists who I've worked with or who I've known and am friends with, people who have raised money for me in the past, to try to get me to drop the charges.

"I've heard from mission presidents. I've heard from family members," he said. "We actually reported to the FBI a bribery attempt on me." Shurtleff did not give further details about that, saying he had to be careful in remarks since the trial was pending.

Mr. Jenson, accused of securities fraud and racketeering, and an ex-felon for bank fraud in the '90s, was represented by Brent Hatch, as I mentioned, and notice his conduct, mentioned in the context of the rejection of a first plea deal as too lenient, after complaints from the victims were sent to the judge:
As Ebeling wrote in a letter to the judge, the deal made him ask, "Could there be extreme political pressure being placed on the State of Utah Attorney General from the Jenson civil law firm's family political connections?"

That attorney for Jenson in civil matters is Brent Hatch, son of Sen. Orrin Hatch, R-Utah. Shurtleff and Sen. Hatch both say the two of them never talked together about Jenson. Any hint of political pressure from Sen. Hatch "is absolutely false," said Shurtleff.

Sen. Hatch said through a spokesman he knew nothing of Jenson or the case, and never discussed the case with his son, Brent.

But Shurtleff said Brent Hatch did bring him "volumes of horrible stuff about our witnesses, our victims" arising out of civil suits brought against Jenson. That may be why Reed said in court he was satisfied with the lenient plea deal "given my perspective of the parties as a whole."

Ebeling was one of three victims, whose complaints went like this:
Jenson is an ex-felon who served six months in prison for bank fraud. He is charged with bilking millions of dollars each from three investors in his "hard-money lending" operation. Jenson reportedly told the investors their money would be used for short-term, high-interest loans to entrepreneurs in need of cash while the businessmen worked on long-term financing. Upon repayment of the short-term loans, the investors would make money.

But the victims say they were not repaid, that Jenson used their money to fund a lavish lifestyle. He then tried to get them to settle for a fraction of what they invested or were threatened with getting nothing at all. They say he never told them before they invested that he had been in federal prison in 1992 for bank fraud.

There were ugly accusations on the both sides, some specifically mentioned as coming from the Jenson lawyers:
Attorneys for Jenson have questioned whether Shurtleff charged Jenson as a favor to a political donor. That donor, Ricke White, is among three people who say Jenson swindled them out of millions of dollars each in an investment scheme, lived in luxury on the proceeds, and then tried to get them to settle claims for small amounts.

On the other side, victims question whether Shurtleff caved in to pressure from supporters of Jenson as his office endorsed a plea deal so lenient that Reese rejected it.

Shurtleff denies any wrongdoing, and says his professional staff have made all key decisions in the case. But he acknowledges "extraordinary pressure" in the case, including being offered a bribe. Shurtleff said he reported that to the FBI, and offered no further details.

Other pressure, he said, included that Jenson supporters "hired people who are lobbyists who I've worked with or who I've known and am friends with, people who have raised money for me in the past, to try to get me to drop the charges. I've heard from mission presidents. I've heard from family members."

Shurtleff also said that Brent Hatch, the attorney son of Sen. Orrin Hatch who represents Jenson on civil matters, sent him "volumes of horrible stuff about our witnesses, our victims," arising out of civil suits brought against Jenson.

So, litigation Utah-style. That's how they roll. After reading the "volumes of horrible stuff", evidently the AG wasn't so sure he could prevail with his witnesses.

There was eventually a second plea deal, involving at least paying back the victims, and the case settled, with Jenson pleading no contest, and also getting no jail time:

Marc Sessions Jenson, 48, of Holladay, pleaded no contest Thursday to three felony counts of selling unregistered securities in a plea bargain accepted by 3rd District Judge Robin Reese.

As in the first rejected deal, Jenson an ex-felon accused of bilking millions of dollars each from three victims will face no prison time and must pay a $15,000 fine to the state. And if he commits no crimes in the next three years and meets other deal terms, the conviction will be erased.

But this time, the deal also calls for Jenson to pay two victims a combined $4.1 million in restitution (a third victim said he has already received restitution). Reese had rejected the first settlement because it did not clearly order restitution. The judge had also questioned whether the first deal served justice.

Here's a couple of examples of a website going after Shurtleff, and notice the appearance of By that time, the founder of Overstock, Robert Brazell, had moved on, and Patrick Byrne was heading up the company. Brazell, in our SCO universe, is of course one of the parties that most recently tried to buy SCO assets. The site made some very serious allegations, illustrating my point that if someone in Utah gets into a dispute with you, chances are you may end up attacked on a website. Or two. Here's another site aping the first one and repeating the Overstock accusations against Shurtleff.

Here's another case of a Utah situation that seems to have gone over the top. A guy, charged with exploiting a prostitute, money laundering and racketeering, hired a private investigator to probe the private life of the Salt Lake County District Attorney, Lohra Miller:

"I turned the tables on her," City Weekly quoted Maese as saying, referring to the private investigation....

Todd Gabler, Johnson's boss, recently revealed that his firm tailed Miller's vehicles, rifled through her trash, videotaped her home and placed a GPS tracking device on her car all actions Gabler insists are legal and in no way an invasion of the district attorney's privacy.

Huh? What is with these people in Utah? They fight so dirty. Here is a report about threats against the residents who opposed building the private club being built. Yes, threats to sue them for opposing the project. And here's where they took the fight to bankruptcy court after Mount Holly Partners sought protection there.

So, what's the connection to Pelican? It seems that Robbins and Jenson were in business together, and it ended up with them being accused of bilking investors in a bicycle company. (You can read about the facts of the case in this interim ruling [PDF] in the Hansen v. Jenson case and Robbins' defense in this Memorandum of Law [PDF] that led to the ruling.) Here's what Jenson was accused of in the criminal matter:

Jenson allegedly convinced three Salt Lake County men -- Michael Bodell, Morty Ebeling and Ricke White -- to give him money that would be used in one case to purchase a bicycle company and in others to serve as short-term loans to businesses until they acquired long-term financing.

Assistant Attorney General Charlene Barlow's complaint alleged that the lenders were promised significant returns on their investments, but instead lost several million dollars. The state also alleged that Jenson failed to disclose to investors, as required, that he had been sentenced to federal prison in 1991 for failing to file a federal tax return and had gone through bankruptcy

I know that sounds like small potatoes, a bicycle company, but in LDS country, selling bicycles could be lucrative indeed.

There's so much water under this bridge.

Here are all the civil litigations involving Jenson in Utah and/or Idaho:

NameCourtCase No.FiledNOSClosed
Neumann v. Jenson, et al
utdce 2:1989cv00073 01/25/1989 850 06/24/1991
Jenson et al v. AMDS Holdings, LLC et al al
iddce 1:2009cv00283 06/12/2009 190 --
Mount Holly Partners et al v. AMDS Holdings et al
utdce 2:2009cv00428 05/11/2009 29007/01/2009
Anderson et al v. Jenson et al
utdce 2:2005cv00720 08/29/2005 240 09/29/2008
AMDS Holdings v. Jenson et al
utdce 2:2009cv00766 08/27/2009 190 10/27/2009
Hansen, et al v. Bk One UT NA, et al
utdce 2:2004cv00867 09/02/2009 470 --
Colton Capital Partners et al v. Jenson et al
utdce 2:2006cv00958 11/16/2006 370 02/27/2009

NOS just means nature of suit, and the numbers are coded so that everyone can see at a glance what kind of case it is.

The first one on the list, Neumann v. Jenson, et al, got voluntarily settled back in 1991.

The second one, Jenson et al v. AMDS Holdings, LLC et al, was in Idaho, and if you read the Complaint, it explains why Robbins believes he ended up in financial difficulties. Everything that followed, according to the filings, were like dominoes, falling one by one. It reminded me a lot of the complaint in the Pelican litigation.

Mount Holly Partners v. AMDS Holdings is the one where Jenson is suing, back in Utah. It's a fairly new case, filed in May. It has to do with the Mount Holly private club he wanted to build. And Hatch represents Jenson. That case is before the Chief Judge, Tena Campbell, who is also assigned to SCO v. IBM. The complaint explains how, from the perspective of Mount Holly Partners, that private club deal went bad. The plaintiffs are asking for compensatory damages and reversing AMDS Holdings' taking over the loan that SFNM-Saddleback made to them.

The Anderson et al v. Jenson et al case was dismissed by the judge -- Dale Kimball, believe it or not -- for failure to prosecute after it dragged on for years without discovery, I gather, even getting off the ground. Hatch's firm represented Jenson.

Number 5 on the list, AMDS Holdings v. Jenson et al was very brief, filed in August and dropped in October, a case assigned to Magistrate Judge Brooke Wells, that was voluntarily dismissed because the complaint was never served. It doesn't say why.

Hansen, et al v. Bk One UT NA, et al, later Hansen v. Jenson, is the one that ended up in the papers, I think, whereby Robbins agreed to a settlement whereby he'd pay off an agreed amount over a period of two years. Failure to make payments would lead to the entire amount being suddenly due, the amount being $300,000. Judge Stewart signed the order stating that Robbins had failed to make the payments and so the entire amount is due. The order was signed on October 20, 2009, but it appears Robbins was found in arrears without his appearance. The order says that his arrearage was established by a Declaration by Plaintiff's counsel. And yes, Hatch's firm represented Jenson in that matter. He's one of the defendants, along with Robbins.

Interestingly, Mark Robbins filed a Notice of Allocation of Fault in the case back in 2007, listing a Morris K. ("Morty") Ebeling as one of those to whom Robbins allocated fault. Is this the same Ebeling as mentioned in the criminal case as a victim? The basis for allocating fault is listed as his participation in meetings involving one of the defendants and the plaintiffs related to the transactions in that case and also because "Ebeling also provided a legal opinion to the plaintiffs as to the viability of high yield trade programs." The Deseret News, in the first article I stumbled on, listed one of the victims as Morris K. Eberling:

But Morris K. Ebeling, who says he lost money in the soured Jenson deal, said that during a meeting with victims, "Shurtleff said he would get this guy (Jenson) off the street, and that he understood what he had been doing."
I would guess it's the same person, but you have to be careful with names, particularly in Utah, as there could be more than one person with the same name.

The same day that Stewart signed the judgment against Robbins, he also signed an order regarding Jenson and MSF Properties, giving them until December 28 to respond to a motion for judgment against them. If they fail to do so, a judgment will be entered like the one entered against Robbins.

And the last one on the list, Colton Capital Partners et al v. Jenson et al, is stayed by one of the parties involved, Richard T. Wolper, filing for bankruptcy. Hatch's firm represents Jenson and his Nimbus Capital Partners and Nimbus Loan Fund in this matter as well.

See what I mean? Hatch is involved in the Jenson matters up to his eyeballs, and so he had prior involvement with Mark Robbins because of that, so when the Pelican case was filed, he must have known this was an issue. How awkward that must have been, with McBride at the time CEO of SCO.

There was also a case filed in 2006 by GMG Capital Investments against Mark Robbins and Steven Norris and some others. It was dismissed for lack of jurisdiction, but it's interesting that the complaint describes Robbins and his father-in-law Ed Davies, like this: "Davies is a high net worth individual and investor, while Robbins is an experienced private equity investor..." but the allegation was that Robbins and Norris essentially aced GMG out of what was supposed to be an investment business, almost a mirror of the language in Pelican. It's 2:06-cv-00876-TC, GMG Capital Investments v. Robbins et al.

I still have no clue who, if anyone, is the good guy in the Pelican litigation. It remains inscrutable to me. Everything I found could be used to support either side, by my reckoning. Maybe there are no good guys in the picture, just everyone trying to scam everyone else and trying to cause as much collateral damage to the other as possible. Or maybe it's all just life, with economic woes galore. But one thing is obvious. When it comes to litigation in Utah, it's darts to each others' eyeballs at 20 paces.

Update: Speaking of connections to Hatch, here's more on the connection between Senator Orrin Hatch and Judge Stewart, from the New York Times, 1999:

The Senate voted 69 to 29 to confirm Associate Attorney General Raymond Fisher for a seat on the Ninth Circuit. And it confirmed Ted Stewart, a friend of Senator Hatch and the chief of staff to Gov. Michael O. Leavitt of Utah, for a Federal District Court seat in Utah by a 93-to-5 vote....

Mr. Stewart had been nominated by Mr. Clinton in July as a good-will gesture to Mr. Hatch.

So we are not talking about a job in passing decades ago. Judge Stewart is said to be a friend of the Senator's, and he owes his current position as judge to the Senator's sponsorship, according to this account.

Here's ACLU's collection of legal filings in a free speech case, where Judge Stewart's ruling in favor of the LDS Church was overturned on appeal. If you were wondering what it was that upset environmentalists about his nomination, here's some background. And here is Senator Hatch singing Stewart's praises in Congress. A video, no less, plus the transcript.

This is like the Tiger Woods story. Every day it gets just a little bit worse.

Update: Two years later, Mr. Jenson was sentenced to jail, with more to come in this story:

The law came down hard Tuesday on Marc Sessions Jenson, a key figure in a failed attempt to transform little Elk Meadows ski area into a $3.5 billion resort.

In the morning, the 51-year-old former Holladay resident was handcuffed in 3rd District Court and taken to Salt Lake County Jail after Judge Robin Reese determined he had failed to pay $4.1 million in restitution to two victims of an earlier unrelated fraud case, violating terms of a plea-in-abeyance agreement reached in May 2008. The judge set an October hearing to sentence him on three third-degree felony counts of selling unregistered securities.

New charges were lodged against him a few days later:
A Holladay man already convicted of fraud in Utah is now facing new charges in connection with a second alleged scheme, in which he touted, among other things, a Beaver County resort featuring a Jack Nicklaus golf course.

Marc Sessions Jenson, 51, and his brother, Stephen Roger Jenson, 46, were both charged Tuesday with four counts of communications fraud, three counts of money laundering, and one count of pattern of unlawful activity, all second-degree felonies. Stephen Jenson is facing three additional counts of second-degree felony money laundering.

Prosecutors with the Utah Attorney General's Office state that Marc Jenson, with the aid of his brother "and others," have devised as many as four different schemes with the goal of obtaining funds from investors which then "fail to materialize and the victims are left with millions of dollars in losses."

Update: There is a May 2013 article in the Salt Lake City News updating all that happened to everyone. Note that Darl McBride makes an appearance, in which, among other things, he admits he set up the loathsome Skyline Cowboy website, although he spins it and the article accepts it as if it were a kind of Western-style cowpoke lark.

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