A would-be buyer of Tamarack Resort in Idaho is the subject of new questions, as AP reporter John Miller reports that Matthew Hutcheson is being investigated by the U.S. Department of Labor, plus faces liens on his home plus bad checks and a former employee's lawsuit totaling $350,000. Click below for Miller's full report.
Workers ask Idaho fiduciary: Where is their money?
By JOHN MILLER, Associated Press
BOISE, Idaho (AP) — Would-be Idaho ski resort buyer Matthew D. Hutcheson spent his career building a reputation as an independent investment adviser helping multi-employer retirement plans manage workers' money, regularly regaling listeners with tales of his testimony on Capitol Hill.
“I am Congress' policy adviser on everything retirement,” he once said.
But in Hutcheson's obscure corner of the retirement savings world where trust is everything, workers and investment managers in Washington state, North Carolina and Hawaii now say he won't tell them where their money is.
The U.S. Department of Labor is investigating, and questioned his associates in Boise on Wednesday. But officials have not said exactly what they are looking for.
Hutcheson has pledged to clear everything up once he talks to federal investigators.
“I'm taking responsibility,” Hutcheson said Friday. “I'm going to get this fixed.”
Liens on Hutcheson's house near Boise, as well as a former employee's lawsuit and bad check claims, also add up to $350,000, while his $40 million bid for the half-finished Tamarack Resort some 90 miles north of Boise in a remote spur of the Rocky Mountains has stalled.
The Associated Press has also found Hutcheson has exaggerated claims in four in-person interviews, a dozen phone conversations and emails obtained by the AP since he announced his Tamarack bid last November.
During one session, he told the AP he'd struck a deal with Palo Alto, Calif.-based electric car maker Tesla Motors to build a factory near Tamarack. This week, Tesla said it had no idea who Hutcheson was.
“Tesla has not taken part in discussions about relocating our manufacturing facility to Idaho,” said spokeswoman Khobi Brooklyn.
Hutcheson also said he's a co-founder of BrightScope, a company that tracks 401(k) performance. On Friday, BrightScope Chief Executive Officer Mike Alfred said Hutcheson was only an early adviser. “Matt was never a founder of BrightScope,” Alfred said.
And billionaire Marc Lasry's Avenue Capital Group in New York disputes Hutcheson's email indicating the hedge fund had pledged $50 million toward Tamarack. The hedge fund said it was shown the resort, but rejected any investment. “It absolutely misrepresents our level of involvement, since we have none,” Avenue Capital said.
Hutcheson said he couldn't go into his discussions with Tesla.
“My contact at Tesla has not given me permission to share our email exchanges,” he told the AP in an email Wednesday.
Hutcheson disagreed with Alfred's assessment of his BrightScope role, insisting he purchased “founders shares” in the company, making him a founder.
And he provided documents detailing correspondence in July between Avenue Capital and his company over Tamarack, though they don't indicate Avenue Capital ever committed $50 million to help buy the resort.
Hutcheson emerged suddenly in Idaho last year with his bid for Tamarack.
Its French-born owner, Jean-Pierre Boespflug, who is now on the run from banks and has disappeared, was trying to unload the property after defaulting on a $250 million loan from lenders, including Credit Suisse Group in 2008.
Hutcheson relished the role of rescuer — not just for the resort, but the region where it was located. “I'm on a humanitarian mission for the people of Valley County,” Hutcheson said.
So far, however, Hutcheson hasn't assembled financing to complete his first foray into speculative vacation real estate.
This January, he backed out of a deal to buy Tamarack's golf course, leaving its majority owner, Randy Hopkins, at the title company with sale documents — but no cash.
“It simply didn't happen,” Hopkins said, adding Hutcheson never told him why.
Hutcheson did acquire a $3.5 million promissory note on the golf course.
Now, even that's in question.
A new lawsuit, filed in Virginia's Rappahannock County Circuit Court, alleges Hutcheson defaulted on a $425,000 hard-money loan this year and now won't relinquish the golf course note that he'd pledged as collateral.
Hutcheson declined to tell the AP where he got the cash to buy the golf course note.
In August, Rolf Trautmann and Dennis Maher, two Washington state actuaries, complained to the Department of Labor about Hutcheson's handling of $1.9 million in G Fiduciary, a retirement plan where Hutcheson had been trustee until recently.
Trautmann and Maher say Hutcheson wanted them to credit the money to a new plan without actually transferring it — or telling them where the cash was.
“We refused,” Trautmann said. “We don't know if he has done anything wrong, but it doesn't smell right.”
Hutcheson, 41, also won't detail the whereabouts of $275,000 from a North Carolina dentist's office 401(k) plan, saying only a “liquidity event” froze the funds. And Hawaii-based investment manager Cris Borden said he's pressed Hutcheson for months about $24,000 belonging to employees of a Honolulu restaurant and its owner, Jesus Puerto, to no avail.
“Where is Jesus' money?” Borden wrote Hutcheson in a Sept. 20 email.
His new lawyer said everything will be cleared up.
“The money is secure, the money is bonded and the money is insured,” said Hutcheson's attorney Dennis Charney. “We will demonstrate to the appropriate forum at the appropriate time that Mr. Hutcheson's dealings are above-board and perfectly legitimate.”
The Department of Labor declined comment.
Amid these concerns, however, Hutcheson's one-time supporters are distancing themselves.
Ary Rosenbaum, a New York lawyer who has taken over as fiduciary at the $7 million, multi-employer National Retirement Security Plan that Hutcheson founded, said Hutcheson relinquished all his duties there on Oct. 4.
“Believe me, I've seen quite a lot of messes,” Rosenbaum said. “This one is odd.”
Copyright 2011 The Associated Press.