Con artist targeted Prescott Valley
Reporting outlawed corrupt regulators
D EAR FRIEND,
No doubt you will be pleasantly surprised to know that our company has elected you to receive a beautiful fullsize lot at Prescott Valley, which we value at $1,995, for only $1,295.
Monthly payments are only $26.66 with $65 down payment.
Today, Prescott Valley is a sprawling town of subdivisions and retail, business and industrial hubs about a dozen miles east of Prescott on State Route 69.
Arizona Republic investigative reporter Don Bolles wrote about the area — and quoted the scam solicitation above — more than 50 years ago.
At the time, just a few hundred people lived in the vicinity. That the area one day would be more populous than Prescott, the state’s historic territorial capital, would have seemed ludicrous.
Tiny Prescott Valley was the epicenter of an Arizona real estate scheme Bolles uncovered in the late 1960s. It ultimately put men in prison, cost investors hundreds of millions of dollars and left many retirees and veterans with nearly worthless lots in the high desert.
Bolles’ work outed corrupt regulators and led to new laws to tame what was then rampant land fraud.
He connected dozens of land sales to companies selling Arizona property that was virtually uninhabitable — without water, roads or utilities. They would sell the same lot to multiple buyers and sell multiple mortgages on the property to different lenders.
Bolles homed in on Ned Warren, the man behind the fraud. He peeled away the layers of Warren’s land and mortgage fraud scheme by tracking the deals of almost 50 firms. His reporting helped pave the way for land fraud charges against Warren that led to a trial and a conviction in the late 1970s.
“Ned Warren was symbolic of a period of lawlessness in Arizona,” said
author and former Arizona Republic reporter Charles Kelly, who was at the scene after Bolles’ car was blown up in 1976 and followed up on some of his stories. “He was a crook who came to town and did bad stuff.”
Former Prescott Courier editor Jim Garner would describe Warren as a “debonair, smooth as silk, handsome, devil may care, con artist who found great fun in selling undeveloped land in Yavapai County to unsuspecting buyers,” according to the Verde Independent.
Jon Talton, Arizona historian and former Republic business columnist, said what Warren did in the 1960s may not make sense now. But the state’s population was much smaller then, it was more difficult to travel to Arizona, the mob had a presence and land outside of metro Phoenix wasn’t all deeded and trackable, he said.
“Ned Warren perfected the art of what we might call mid-centrury land fraud in Arizona,” said Talton, who grew up in Phoenix during the 1960s and 1970s. “He would set up shell companies and go out and sell beautiful Arizona land through bad deals. Then Warren would put someone else in charge, so it seemed he wasn’t involved when the deals fell apart.”
In 1967, Bolles’ investigation ran on the front page of The Republic for eight straight days.
The Wild West of shady land dealings
Warren was a smooth talker and sharp dresser with a mane of dark, thick hair styled like Elvis Presley’s, who easily dropped connections from his affluent East Coast upbringing into conversations.
He liked to wine and dine with Phoenix’s wealthy and prestigious business and political leaders and often was at Durant’s, which was then, as now, a midtown chophouse frequented by power brokers. Warren would make the rounds to other tables before sitting down.
Born Nathan Waxman, Warren had arrived in Phoenix in 1961 with his family and less than $1,000. A few years later, he was living in a Paradise Valley mansion, driving a Rolls Royce and doing business with the Democratic Party chairman and other members of Phoenix’s elite.
He began by selling lots for other firms and but then quickly launched his own companies. Lots of them. One firm Warren left sued him for stealing leads for land sales in Yavapai County.
Talton said Warren “had a gift for mingling with the powerful.” But most didn’t know his history.
He had been to prison for duping people into investing in a Broadway show that never ran and served another stint for concealing assets after filing for bankruptcy. Warren served time in the notorious Sing Sing prison in Ossining, New York.
Before coming to Arizona to sell land, he took in millions of dollars from a New York chinchilla-sales scheme, bartered swampland in Florida and sold fake advertising that never ran on radio stations in the Midwest.
Warren, who typically didn’t shy away from reporters, often was quoted as saying he could sell anything.
Longtime Arizona economist and real estate analyst Elliott Pollack said Warren’s Ponzi scheme selling mortgage paper and land was bound to fail.
“But too many people had to pay the piper in his fraud,” he said.
Warren’s felonies meant he couldn’t get a license to sell real estate in Arizona legally.
He found a way around that by bribing the head of the Arizona Department of Real Estate, J. Fred Talley.
Bolles and other Arizona Republic reporters obtained copies of Warren’s applications for a real estate license that were first denied and later approved.
Warren, who often was seen having drinks with the regulator, devised a complicated way of making payments to Talley through Warren’s different firms and the people running them.
Reporting from Bolles and other Republic journalists detailed the payments made to Tally and to another employee of the state real estate regulatory agency.
Those reports led to an investigation. Talley died of a heart attack while it was under way.
What were Warren’s companies doing?
Notes from Bolles’ reporting show Warren’s ties to the many companies, the amounts of money passed among them and the names of his business partners and family members running them.
Great Southwest Land and Cattle Co., Consolidated Mortgage, Western Growth Capital, Prescott Valley Inc., Queen Creek Land & Cattle Co., Arizona Valley Development Co. and Cochise College Park were among Warren’s bigger and more well-known firms.
Most were selling land in what is now Prescott Valley. Warren had salespeople travel through the Midwest pitching the lots as retirement properties to groups in small towns.
The deals attracted veterans who had trained in Arizona before World War II and wanted to retire on their own piece of desert.
The companies also were pushing mortgages with fake buyers to banks and other financial groups that would invest in the paper.
Actor Cesar Romero, who played the joker in the original TV show “Batman,” was hired by Warren’s companies to market their Prescott Valley land.
A duck pond was built in front of one the subdivisions now known as Verde Village, but little else was developed.
News articles from 1971 showed the Verde Village sales office surrounded by cars and headlines saying $8 million in lot sales had been recorded.
But the lots didn’t have existing water supplies or paved streets. All relied on septic tanks, and some of the lots were too small to house sewer tanks.
Some early residents of Warren’s developments had to get water by sharing a hose with a neighbor and communicate by CBs because they weren’t in an incorporated area and couldn’t get phone lines.
What led Bolles to write the story?
The failure of Western Growth Capital in 1966 first drew Bolles’ attention to Arizona’s land fraud problem.
Lee Ackerman, Democratic Party chairman, was tied to the once-high flying — and then suddenly failing — firm and became a source.
Warren had partnered with Ackerman to launch Western Growth, which mostly sold land in Yavapai County.
Warren told Bolles that Ackerman came to him because he could sell land and the politician knew people to sell it to.
Western Growth reported assets of $7.8 million, including the Diamond Valley subdivision on the edge of Prescott, right before going into bankruptcy.
Bankruptcy filings showed it had less than $1 million in assets, and a federal official called them “spaghetti ... meaningless,” according to a Bolles story.
Ackerman sued Warren, saying Warren had cashed out of Western Growth and invested the money in his other firms. Ackerman had to file for personal bankruptcy.
Warren had obtained letters in 1971 that promoted buying land in Arizona from then-U.S. Sen. Barry Goldwater and then-U.S. Rep. Sam Steiger.
Bolles had copies in his reporting files.
Both politicians later denied any support of the land fraud, saying they were not backing Ned Warren and by signing a letter, they were only welcoming people to Arizona.
Warren, with his affinity for power brokers, didn’t mingle with the reported drunks and prostitutes that he had his people meet in Phoenix bars. They were paid a few hundred dollars to sign for loans they never planned to pay back, according to court testimony and previous reporting.
He then maneuvered bad land and loans among his many firms, signing over ownership or selling when the deals were about to fail.
“I like to build up companies for 18 months or so and then sell them and walk away from them,” Warren told the journalism group Investigative Reporters and Editors Inc. in a 1976 series following up on Bolles’ reporting after his death.
“I was a thief, and I was a good thief.”
3 suspicious deaths of business associates
At least three of Warren’s associates died violently.
Ed Lazar, Warren’s partner and president of Consolidated Mortgage, was shot five times — once in the head and four times in the heart — in the stairwell of a central Phoenix parking garage in 1975.
He was killed the day before he was to testify against Warren in his land fraud trial. Coins were tossed on his body, a warning symbol to anyone who wanted to testify against the mob.
Walter Cronkite reported on Lazar’s death on the CBS evening news, calling it a “gangland slaying.”
One of the shooters from Chicago later confessed and said Warren had ordered the killing through some of his people.
“No one went to prison for my father’s murder,” said Zachary Lazar, who was 6 when he father was killed.
He did deep research about how his accountant father became tied up in Warren’s fraud and wrote a book about it called “Evening’s Empire: The Story of My Father’s Murder.”
Tony Serra, the sales manager of Warren’s Great Southwest Land & Cattle Company, was convicted of land fraud charges in 1974. Serra was murdered in prison in 1977.
Leonard Hoffman, who was tapped by Warren to take over over Prescott Valley Inc., was one of the first suspicious deaths. He died in a private plane crash in 1973. The cause wasn’t reported.
Convicted of bribery and 20 counts of land fraud
In 1976, Bolles was killed after his car blew up outside a midtown Phoenix hotel not far from where Lazar died.
After the Bolles slaying, County Attorney Moises Berger was forced to resign. A Phoenix police organized crime detective taped him admitting that he had backed off on prosecuting Warren because of pressure from prominent officials in the Republican Party.
The Rev. James Cornwall, a salesman for Consolidated Mortgage and then president of Great Southwest Land, also agreed to testify against Warren. He was put under 24-hour guard after the deaths of Lazar and Bolles.
Cornwall ended up with a sentence of probation for his testimony.
In 1978, Warren was convicted of 20 federal charges of land fraud and two charges of bribery and sent to the Arizona State Prison in Florence. He died of cancer in 1980, after starting to serve his 60-year sentence.
In 1975, Warren had been convicted on extortion charges in Seattle and sentenced to 12 years for threats made to a Phoenix bartender. The trial had been moved from Phoenix. Warren appealed and never served time for that conviction.
The impact: More regulations and oversight
To stop development like Warren’s subdivisions in Prescott Valley, the Arizona Legislature gave counties power to regulate subdivisions in 1971.
In 1978, a court order blocked future land sales in the Prescott Valley subdivisions until plans for utilities and roads were approved and funded.
Prescott Valley’s early residents rallied to keep the community from failing, sending letters to regulators, holding fundraisers to build amenities and creating their own HOA.
“Prescott Valley developed nicely despite Warren,” Pollack said.
Now the community is an incorporated town with more than 45,751 residents, plenty of shopping and big employers including Yavapai Regional Medical Center. It has more people than the city of Prescott, where 43,314 people live, according to the U.S. Census.
“The fraud Warren pulled off isn’t the biggest fraud in Arizona history, but it deceived many people,” said Greg Vogel, CEO of Scottsdale-based Land Advisors Organization and Arizona land historian.
He said Bolles’ reporting helped shed light on and stop that fraud.
“No more can guys pay hookers and drunks to sign illegal mortgages and sales documents and pass those papers on as legitimate. Now, thankfully, that kind of fraud can’t be done and hidden.”