Portales Corporate Center…. A $172.8 Million Fraud

Portales Corporate Center…A loss of $66 million in value in 12 months…

In 2008, Principal Life Insurance Company purchased for the Principal U.S. Property Separate account an office center in Scottsdale, Arizona, for$172.8 million.  One year later, the PUSPSA Annual report published the Gross Asset Value of the property at $106,600,000, a loss of $66.2 million.  Below is Arizona Central’s report of the sale:

Portales Corporate Center

Portales Corporate Center

 

 

 

 

 

 

 

 

 

 

 

In 1998, Principal had loaned the developer, Anchor-Forum Portales I, LLC, $38,500,000 to construct Portales Phase One, according to this Construction Deed of Trust recorded in Maricopa County on 07/09/98…

Portales corpoarate center

On July 15, 2005, Anchor -Forum Portales I, LLC sold the property located at 4800 North Scottsdale Road to Anchor-Forum Portales I LLC/Forum Capital Lc for $4,237,042…

Portales Corporate Center

Anchor-Forum Portales I LLC/Forum Capital Lc then sold to PCCP CS Forum Portales Phase I, LLC for a sales price of $15,297,157, describing the “method of financing” as an “assumption of existing loan.”  This sale was 100% interest to the buyer.  The legal description was “Phase I of Anchor Forum Portales.”  this Affidavit of Property Value  filed on July 26, 2005, documents the sale.  PCCP CS Forum Portales Phase I, LLC then sold to Pccp Forum Portales I LLC/Forum Capital Lc (located at Principal Life Insurance Company headquarters in Des Moines, IA) for $32,551,365.  And finally, Pccp Forum Portales I LLC/Forum Capital Lc sold to Pccp Forum Portales I LLC/Etal for the same amount:

The above illustration defines laundering commercial real estate investments  by passing ownership thru several private corporate structures to conceal the true ownership.  After completing the above process, which included loan assignments and inflated sales pricing, Principal Life was able to “sell” this single commercial office building to the Principal U.S Property Separate Account.  The final transaction also took place on 3/15/2008, when Pccp Forum Portales I LLC/Etal took this property with an original value of $32,551,365, and sold it to the Principal U.S. Property Separate Account (Portales Corporate Center LLC/Etal) for $72,448,635!

Portales Corporate Center

The sale of Portales Phase Two was sold in a similar manner, with Pccp Cs Forum Portales Phase Ii LLC selling to Pccp Forum Portales Ii LLC/Forum Capital Lc in Des Moines, IA for $21,003,380, and Pccp Forum Portales Ii LLC/Forum Capital Lc selling to Pccp Forum Portales Ii LLC/Etal for the same value.  Finally, Pccp Forum Portales Ii LLC/Etal sold to the account (Portales Corporate Center LLC/Etal) for $46,746,619, rounding out the combined sale of the properties at $119,195,254!:

The 2008 Principal U.S. Property Separate Account Annual Report shows the acquisition price at $172.8 million.  There may have been $53,604,746 in outstanding loans owned by Principal Mortgage that were also assumed with the acquisition.  The purchase was a record per square ft price for an office building in Scottsdale, at a time when office buildings were selling at rock bottom prices.  Principal was able to add almost $173 million in this one transaction alone to the growing tally of fiduciary crimes committed by Principal Financial executives through fraudulent self dealing.

 

 

 

 

 

 

 

 

 

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Author: Dennis Myhre

Mr. Myhre can be contacted at..... dmyhre@fiduciaryfactor.com