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More digging revealed other holes in the records. When he looked at McConville's 2006 loan application describing appraised values and monthly rents, Narraway said he saw numerous discrepancies. For instance, according to one appraiser for the Bay Point property, $6.5 million was a highly inflated value — even in 2006. The receiver for the property confirmed that the rents for the building at full capacity were closer to $32,000, rather than the $62,000 written on loan documents.
This, Narraway said, had to be more than just negligence.
Marcus Johnson clutched a clipboard holding process-serving papers and stepped over a fluorescent orange piece of plastic sheeting that hung between two posts at the entryway of the Castro Valley ranch. As he walked slowly up the wide, palm-lined driveway, he stopped to snap photos of the knee-high weeds, scattered trash, and abandoned buildings dotting the browned hillside.
He shook his head. "It looks like a fucking ghost town up here," he said.
Pictures taken in mid-May reveal a starkly different scene: manicured lawns, ornate bronze sculptures, fountains built into a terraced garden, stables, an auto body shop, and enough garages to house at least 15 cars. According to a court declaration from Jack Thomas, McConville had more than 20 expensive cars, including two Lamborghinis, a Hummer, a vintage Cougar, and an El Camino.
Jason Piette, a former employee for McConville in charge of business development, claims he had access to financial documents that his boss told him to show lenders to obtain loans. Piette also declared in a court document that McConville had cars worth more than $1.5 million, plus jewelry, art, and furniture worth $6.2 million. Those assets included, according to court documents, more than 40 bronze statues, an extensive comic book collection, a life-sized statue of the Predator character (claimed to be worth about $10,000), six pinball machines, and three full-sized automobile hydraulic lifts.
Although the buildings still stood, by Johnson's visit on July 4, the McConville property was completely stripped. Even doorbells appeared to have been ripped out. Thomas said in his declaration that in late March he observed workers moving personal property into a 35-foot truck. A couple of months later, he returned and found that air conditioning units, ceiling lights, fans, and light fixtures had been torn out.
This didn't make Johnson's job any easier. As a process server, Johnson was supposed to serve a court summons to McConville, or prove to his client, Narraway, that McConville couldn't be found at the ranch in Castro Valley where he was purported to live. He had served McConville's daughter, Nicole — who is also implicated in the lawsuits — at a hair salon in Fremont where she worked as a stylist.
Although her name appears on documents as management for the Emerald, Sapphire, and Diamond House companies, among others, Nicole said in a deposition that her father was the one in charge. He later relayed a message to Narraway through her that the financial documents Narraway requested for all of the companies had been stolen. SF Weekly tried contacting James and Nicole McConville several times, with no response from either.
Johnson wasn't the first process server Narraway hired to find McConville. According to court documents, the first server he hired in January made 10 attempts — the first four at the Castro Valley ranch. Narraway also isn't the only one looking. Narraway's suits against McConville and various associated companies are among several filed in Bay Area county courts. Most of these involve angry investors like Narraway who are now swimming in foreclosures.
A lawsuit filed by Kim Sung, a former employee of McConville's, alleges that the six corporations named — including Sapphire and Emerald Park House Corporations and Diamond House Development — are "shells without capital, assets, stock, or stockholders." It goes on to say that the corporations were "so inadequately capitalized that its capitalization was illusory." The lawsuit alleges that the father and daughter took the assets of the corporations for personal uses, and ran them into the ground on purpose to avoid future financial obligations.
Narraway said he has lost roughly $2 million to McConville's companies. Greg Righetti, a hardware store owner in San Francisco, says he has lost $100,000. Lundy says he lost $400,000.
Dave Neseralla, an investor in Petaluma, wouldn't say exactly how much he lost, but he said it was enough. McConville "had it down to a science," he said. "He'd buy real estate that had different parcels, like five parcels on one purchase contract, and then split them up." Then, Neseralla said, he'd get inflated loans on all five. When the market was good, he says, everyone got paid: "But soon as the money stopped, it was painfully obvious that he was floating everyone's money."
Media in San Diego have reported that McConville made $12.5 million buying up condos in bulk at discounted prices and then recruiting buyers to purchase one or more condos at inflated prices to collect an inflated loan for each unit. Purchasers, called "straw" buyers, were promised payment for allowing use of their good credit to buy property and to secure loans on behalf of the companies paying them to sign. Straw buyers were told they would never have to make loan payments — that would be taken care of. All they had to do for the kickback was sign on the dotted line. McConville then allegedly never paid the buyers, pocketed the loan money, defaulted on payments, and sent the properties into foreclosure — leaving straw buyers with no credit and almost worthless properties.
Vicki Jenkins, one of these straw buyers in San Diego, said that McConville met with her and 15 of her friends in January 2008 and told them they would each get $10,000 cash merely for signing a few documents. She said he explained that they would be his co-investors, and that he had more than 40 years of real estate experience and owned more than 1,000 properties. He was charming and humble and seemed to know what he was doing, she said. Three of the 15, including Jenkins, ended up signing.
