Financial chaos follows in wake of Four Corners con man
Health concerns stall Bobby Willis’ criminal case — but don’t stop him from suing IRS for $33 million
Convicted embezzler Bobby Willis is either knocking on death’s door or he’s working on an acting award for stalling his federal fraud trial.
But the litany of medical problems that he says prevent him from assisting in his own defense in the federal criminal case hasn’t kept the high-rolling Willis from filing multiple civil lawsuits against former business associates and the court-appointed receiver of the title and escrow company he owned.
And last year he sued the IRS for $33 million — one of 26 separate lawsuits in which Willis was involved either as a plaintiff or defendant in 2016.
Described as a “brash, abrasive, polarizing figure” who often carried two guns on his hips, Willis definitely has his own style.
According to court records, he claimed that Microsoft founder Bill Gates and billionaire investor Warren
Buffet were close friends and told people he spoke to then-President Barack Obama by phone on a weekly basis.
He has been charged with running three different schemes. Two of them were indicted in one case in state court in 2012 and resulted in a plea bargain. The other resulted in federal charges that are still pending.
His tangled web of real estate deals began in 2009, according to court records, when Willis began telling people he was going to build a sprawling multibilliondollar community centered around a hospital in Kirtland backed by the Department of Veterans Affairs.
Prosecutors say the investors later discovered the plan was entirely “fictitious.”
The charges in that case were dropped as part of a plea bargain involving a real estate escrow company he owned. Willis, 44, pleaded no contest last year to two state charges of embezzling more than $100,000 in that case and was sentenced to five years of probation.
In addition, Willis has been facing federal criminal charges since 2015 for allegedly defrauding a New Mexico couple of $1 million in a separate real estate deal.
But that case has been stalled over what Willis says is a host of medical issues including heart problems, diabetes, fainting, racing pulse, seizures and ministrokes.
His lawyers say he needs roundthe-clock care while serving probation on the state embezzlement conviction at a family compound between Farmington and Kirtland in northwest New Mexico — but some medical providers, as noted by a federal magistrate judge, suggest some of his problems are “psychogenic.” Meaning they are in his head.
Willis was supposed to have gone on trial in federal court next month, but the case was pushed back because Willis said he was scheduled to undergo tests at the Mayo Clinic in Phoenix.
At the time he was sentenced in state court last April, he was involved in 26 civil lawsuits either as a defendant or plaintiff.
Along the way he has sued the San Juan County Detention facility, the San Juan Medical Center, the State Insurance Superintendent and the state Financial Institutions Division.
Those cases have been dismissed without prejudice, which means they can be refiled.
Health issues aside, Willis has left behind a wake of financial chaos that includes allegations of fake real estate investments, stolen gold coins, phony Rolex watches and stolen gems.
Last year, he was sentenced to five years of supervised probation by state District Judge Louis E. DePauli Jr. after pleading no contest to embezzlement over $20,000 and embezzlement over $2,500.
Assistant Attorney General Zack Jones argued that Willis put in motion a series of frauds when he bought New Mexico Title and Escrow in Farmington and “treated it like his personal slush fund.”
As part of his sentence Willis paid $94,000 in restitution to Damtech Holding Co. and $20,000 in restitution to a limited partnership for taking money from the businesses’ escrow accounts for his personal use.
VA complex
San Juan County businessman Mike Atchison invested $1.563million in Willis’ hospital plan, including a gold coin collection — money that was supposed to pay for the planning of the hospital project while Willis obtained more than $30 million in industrial revenue bonds from San Juan County.
According to civil and criminal court records, instead of using the money to develop the public bond proposal, Willis deposited Atchison’s investment and immediately began buying lavish personal items unrelated to the VA project.
He purchased a suite at Denver Broncos games costing $132,880. He donated another $130,000 to a charity he founded. He and his wife paid themselves $70,000 in cash.
And he paid more than half a million dollars to his attorneys to pay off mortgages on their home and office building, according to prosecutors.
It took Willis all of five months to go through Atchison’s investment, with none going toward the veterans hospital project, which never went past the talking stage with county officials who would have had to approve the industrial revenue bonds.
Charges related to the spending of the Atchison investment were dropped in the plea bargain, but the allegations continue in ongoing civil lawsuits.
State investigation
About the same time Willis was promoting the hospital development, he purchased New Mexico Title and Escrow in Farmington.
He later sold the title portion of the company to his attorneys but kept the escrow operation.
The financial labyrinth began to unravel with state investigations into the title and escrow company after a consumer complaint in 2011. An escrow company customer said she sold her house and the money deposited with Willis’ escrow company was late getting deposited in her accounts.
The Financial Institutions Division made inquiries. The escrow company didn’t respond, and a full-blown investigation began in early 2012.
The state Insurance Superintendent and Financial Institutions Division subsequently filed suit and a court appointed a receiver to inspect the company’s records.
Willis fought the state officials every step of the way, requiring the judge to step in and order doors and files in the escrow company building to be unlocked.
Officials complained to the court that at one point Willis showed up at the door yelling and with a pistol on his hip.
The court’s receiver reported finding $1.5 million taken from escrow accounts in checks and money transfers with no corresponding files to support the transactions.
Later, the receiver reported finding claims against the title and escrow company of more than $2.2 million and a little less than $400,000 in accounts to cover those claims.
The receiver seized Willis’ real estate assets in Michigan and Farmington to try to make good on the losses.
While the criminal case is ended, the civil case involving the escrow company is still pending because the receiver’s final report has not yet been approved in state District Court in Farmington.
Extradited
Meanwhile, while he was out on bond on the state charges in 2012, he was allowed to travel to Branson, Mo., where Willis had a house and, he said, he could get medical treatment.
But Willis failed to return to New Mexico for a court hearing in Farmington and a bench warrant was issued for his arrest. He had to be extradited back to New Mexico in 2014 and remained in custody until May 2015 when he posted $250,000 bail.
During his arrest in Branson, law enforcement also served a search warrant during which the IRS seized 364 boxes of $1 goldfaced coins.
The IRS converted the coins into currency for deposit into an IRS escrow account.
Last year, in federal court in Missouri, Willis filed a civil lawsuit against the IRS and local law enforcement agencies in Missouri and New Mexico, where the search warrants were issued.
Willis claims that while the face value of the coins was $364,000, the coins were actually worth $18 to $1,500 per coin or a total of $33million.
In court documents he claims the IRS was notified of the actual value of the coins and asked the government not to convert the coins into cash.
The attorneys for the federal government in court filings denied Willis’ claims.
Federal case
In 2010, Theresa and Joe Lee wanted to convert their IRA to a Roth IRA.
Willis was recommended as an investment adviser and told Theresa Lee that he was starting a real estate limited liability company that would invest in commercial and residential real estate.
According to federal court documents, Willis said that an investment required a 30-year commitment.
Willis told Lee that she would earn a 20 percent annual return on her investment through a combination of capital appreciation and possible rents.
According to federal court records, when Lee sent the money to one company it was immediately transferred to accounts controlled by Willis.
The federal government charges in the indictment that no real property was purchased.
Instead, Willis allegedly used some of the money for personal living expenses. He sent $37,000 to a country music artist company and another $40,000 went for the purchase of a Ford Explorer for a relative.
A federal magistrate judge in Albuquerque ordered that Willis be released into the custody of his ex-wife and not to have any contact with victims or witnesses in the case.
Health issues
According to federal court records, Willis’ attorney claims he is in extremely bad health and requires 24-hour skilled care.
They contend he has heart disease accompanied by chronic angina and a heart rate that often exceeds 100 beats per minute at rest and under stress may increase to 190-200 beats per minute. His blood pressure may spike to an alarming level and then at other times dip precipitously.
His lawyers say Willis suffered a stroke in 2010, and again in August 2012. He also has a serious blood clotting mutation. They say that while in custody in San Juan County he had another stroke or possibly multiple ministrokes and is now partially paralyzed on his left side.
Currently he uses a wheelchair and is unable to stand. He receives physical therapy several times a day from his ex-wife, who is his primary caregiver.
His lawyers say that of most immediate concern are multiple faint and fall and/or dizziness episodes he experiences, usually four to six episodes each day. Each stroke and each seizure has caused increasing brain trauma and damage, they say.
Also, they say his memory has deteriorated and declines with each seizure. He can no longer read or drive, and his eyesight cannot be corrected by glasses.
Federal prosecutors have not challenged the defense claims because Willis is scheduled to undergo several days of medical tests at the Mayo Clinic in Phoenix this month. But others have. Many of the same medical claims were made during Willis’ state sentencing hearing.
State prosecutors said they had serious concerns about the veracity of Willis’ claims of health issues. They pointed out that the embezzlements he pleaded guilty to occurred after his 2010 stroke and showed his ability to victimize others in spite of his medical problems.
After he was extradited from Missouri, prosecutors claimed that Willis was trying to stay out of jail by “malingering” and a state judge apparently agreed, deciding that Willis could receive adequate medical attention in the San Juan County lockup.
Late last year U.S. Magistrate Judge Kristan Khalsa found that Willis was healthy enough to participate in the civil lawsuit he filed against the San Juan County jail and others for allegedly failing to provide him with adequate medical treatment.
Khalsa ruled in December that many of Willis’ health problems predated the filing of his lawsuit and noted that some medical providers have described some of his medical problems as “psychogenic.” Khalsa set new deadlines that all discovery in the lawsuit had to be completed by the end of March, including the taking of Willis’ sworn testimony.
But Willis dropped the lawsuit in January. The dismissal was without prejudice, meaning it could be refiled.