Judge seeks truth on missing $1.5 million | TheUnion.com
YOUR AD HERE »

Judge seeks truth on missing $1.5 million

A federal court hearing next month will examine whether the man in charge of a Grass Valley office development stole money from investors who poured funds into one of the area’s largest commercial projects.

On March 20, defense attorneys and prosecutors will argue what happened to $1.5 million missing from the Grass Valley Community Services Center building on Hughes Road- and whether Harvey Keith Smith, 76, a parolee, stole it.

“I want to know whether or not, during the supervised release period, he was stealing money from people and the extent of that theft,” said Judge Lawrence Karlton, during a federal court hearing Thursday in the Eastern District of California, in Sacramento.



Smith’s defense attorney, Christopher Wing, of Sacramento, said after the hearing that Smith did not steal the money and the hearing will prove it.

The attorney prosecuting the case, Assistant U.S. Attorney James Arguelles, warned that the evidence presented will “bury” Smith.




The Grass Valley Community Service Center office project is out $1.5 million, according to court testimony. The second and third interior floors of the building remain unfinished and unoccupied. The building is in foreclosure.

Smith, the agent in charge of the project and a former Alta Sierra resident, was expected to be sentenced Thursday on a probation violation and other counts.

But attorneys set an evidentiary hearing to determine whether Smith was really trying to get the office projects going in Grass Valley and Vacaville at the Nut Tree Airport or allegedly committing fraud. They are expected to comb through as many as 25 boxes of documents to account for the missing funds.

Problems at the 150 Hughes Road building – one of the area’s largest commercial projects – came to a head in August 2001 when the lead contractor walked off the job in the midst of construction, claiming money was owed.

Since then, an avalanche of civil suits have been filed in Nevada County Superior Court in connection with the project.

Smith was arrested in February 2002 on charges that he violated his parole in connection with the Hughes Road project.

In August, Smith pleaded guilty in U.S. District Court in Sacramento to associating with a known felon and making a false statement on a credit and loan application.

In December, Smith pleaded guilty to a second violation of his parole in connection with a proposed office building he was promoting in Vacaville at the Nut Tree Airport. Smith plead guilty to counts of associating with a convicted felon, falsified reports, and unauthorized travel out of the federal court district.


Support Local Journalism


Support Local Journalism

Readers around Grass Valley and Nevada County make The Union’s work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Your donation will help us continue to cover COVID-19 and our other vital local news.

 

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User