Portland attorney accused of hiding role in real estate fraud, then reaping millions in marijuana deal

Portland attorney Nick Slinde is facing new allegations that he hid his role in a notorious Oregon real estate scam, putting his own interests ahead of his client’s and reaping millions of dollars when investors’ money was redirected into a marijuana business in which Slinde owned a stake.

The new accusations are in a scathing letter to the Oregon State Bar from the court-appointed receiver overseeing the dissolution of Iris Capital, the investment fund that spurred the scandal and cost Oregon retirees $1 million in savings. The bar association has been investigating Slinde since 2019.

The receiver’s attorney, Justin Leonard, charges that Slinde used his position as Iris’ attorney to negotiate a share of the marijuana business for himself. Then, after the real estate venture fell apart, Leonard said Slinde failed to turn over documents that could have helped the receiver negotiate a larger settlement for the retirees.

The accusations go beyond asserting a professional failure. While Slinde did not face allegations that he actively participated in the real estate scam, Leonard maintains that Slinde benefitted financially and avoided liability because he didn’t provide complete documentation of what really happened.

“Mr. Slinde’s actions may have violated Oregon’s rules and standards of professional responsibility and warrant your further investigation,” Leonard wrote in a February letter to the bar, obtained by the Oregonian through a public records request.

Slinde is co-founder and named partner at Slinde Nelson, a boutique business and real estate law firm with a dozen attorneys in Portland. His own attorney emphatically rejected the allegations, urging the bar to wrap up its inquiry into events that occurred eight years ago.

Noting that Slinde has never faced discipline in 22 years as an Oregon lawyer, his attorney asserted that the Iris receiver, Amy Mitchell, had all the relevant documents at her disposal but didn’t make use of them.

“The suggestion that Slinde Nelson is somehow at fault for the Receiver’s and her counsel’s failure to review documents that they possessed is meritless,” attorney David Elkanich wrote.

Document dispute

The Iris case and associated allegations against Slinde are complicated and concern investments and legal advice stretching back more than a decade.

Investigators and prosecutors say Iris’ founder, Shayne Kniss, raised $5 million from 47 investors between 2011 and 2014 to buy, rehabilitate and sell homes. However, Kniss embezzled some of their investments to pay for lavish personal expenses and fund his marijuana businesses.

Kniss pleaded guilty to wire fraud in 2018 and was sentenced the following year to three years in federal prison. (He was released early, this past October.)

The bar’s investigation of Slinde began in 2019, when Kniss filed a complaint against him. Kniss alleged that Slinde, as Iris’ attorney, had a conflict of interest when he negotiated a 2014 settlement over a dispute Iris had with developer Sean Keys. Keys paid $500,000 into Kniss’ own marijuana startup, in which Slinde had an ownership stake, to resolve allegations that Keys had misappropriated Iris funds.

While Kniss knew that Slinde had a stake in the business, he argued Slinde had failed to protect Iris investors when negotiating the deal.

In Leonard’s letter, he amplifies Kniss’ accusation, alleging that newly disclosed documents suggest Slinde was aware of the mingling of the real estate and marijuana businesses.

“The Receiver is now concerned that Mr. Slinde may have taken actions that favored the (marijuana businesses) over his original client (Iris) and the interests of the investors in the Iris Funds,” Leonard wrote.

“Whether negligently or intentionally … it appears Mr. Slinde intentionally protected himself, his firm and the (marijuana businesses) themselves – entities in which he held significant ownership interest,” Leonard said.

While Kniss alone was held criminally responsible for the Iris fraud, professional services firms and others paid confidential settlements for their role advising Kniss by providing accounting or legal work. Documents associated with the investigation suggest those deals were worth more than $3 million.

“The case occurs in a larger context of bigger players paying their way out of this problem while you’re left holding the bag,” U.S. District Court Judge Michael Mosman told Kniss at his sentencing in 2019.

In his new letter to the bar, Leonard alleges that when the receiver took control of Iris, Slinde didn’t turn over the full case file as the court instructed. He wrote that some emails didn’t become available until recently, when the bar subpoenaed them from Slinde as part of its investigation.

If all the information had been available earlier, Leonard said the Iris receiver would have known some parties had played larger roles in enabling the fraud and the receiver might have negotiated larger settlements for Iris’ investors.

“The failure to provide these emails prejudiced the receiver’s investigations into claims against third-parties,” Leonard wrote, including Slinde’s law firm and the marijuana business.

One marijuana startup that emerged from Iris was originally called Terwilliger Partners, backed with money from Iris investors. Iris’ mom-and-pop investors held no stake in the marijuana business, but Slinde acquired a 15% share through his work with Iris.

Terwilliger later became Cura Cannabis, also known as Select. Portland-based Cura agreed to sell itself in May 2019 to a big Massachusetts company, Curaleaf, in a deal initially valued at nearly $1 billion.

Curaleaf subsequently endured a significant decline in its share price, and the all-stock deal for the Portland company was worth just around $400 million when it closed in February 2020. At that time, Slinde and his law partner owned about 10% of Cura’s shares, according to state records, worth approximately $40 million.

Cura’s sale included restrictions on when its shareholders could sell their shares, and also provided the opportunity to receive more Curaleaf stock if the newly acquired business met sales targets after its sale.

So it’s not clear how many Curaleaf shares Slinde and his partner own today, or the ultimate value of their stake in the marijuana business that emerged from Iris’ collapse. Slinde’s attorney did not respond to a request for comment.

(Slinde is now being sued by Curaleaf’s chairman, Boris Jordan, over a separate business deal. Jordan alleges that Slinde and some of his associates committed securities fraud by making false claims about a Portland CBD company, Sentia Wellness, that Jordan backed. Slinde was Sentia’s outside general counsel.)

‘A long process’

It’s often problematic when attorneys accept ownership stakes in their clients’ businesses, according to John Strait, an emeritus law professor at Seattle University. He said it has the potential to put a lawyer’s interest in conflict with a client’s if a deal comes apart.

“If it goes sour, you become the ensurer of the success of the transaction because of your professional responsibilities,” said Strait, who has served as a consultant to the Oregon State Bar and as an expert witness in Oregon conflict-of-interest cases.

After reviewing the receiver’s letter to the Oregon State Bar, Strait said there appears to be evidence Slinde had crossed the line beyond simply representing a client.

“He has some real ethical issues, no question, and the receiver’s analysis is, if anything, generous to him,” Strait said. “There’s certainly the likelihood of some kind of discipline if those allegations are sustained.”

Elkanich, Slinde’s attorney, said the fault lies with the Iris receiver, not Slinde. In his letter responding to the latest accusations, Elkanich describes the allegations as a “red herring” and said nearly all the material raised by the receiver was readily available through documents Slinde and his law firm provided previously.

“We have no idea … why or how the Receiver thinks this issue–raised for the first time now, six years after Slinde Nelson’s production–would have affected anything regarding the Receiver’s efforts to recover additional investor funds,” Elkanich wrote.

Further, Elkanich said the conflict-of-interest allegations don’t hold up because it was Kniss, not Slinde, who initiated the agreement to resolve the dispute with the developer, Keys. Kniss had alleged that Keys had misappropriated Iris funds, an accusation never substantiated. But Kniss’ criminal defense attorney said Keys paid an unspecified settlement to the Iris receiver.

Absent proof that Keys really did misappropriate the money, though, Elkanich said, “there was no quid pro quo as a matter of fact and law,” regarding the payment into the marijuana business.

“Mr. Kniss filed this complaint on April 10, 2019–nearly three years ago. We believe that this is an unacceptable length of time for a lawyer to await resolution of a Bar inquiry,” Elkanich wrote.

Dustin Dopps, spokesperson for the Oregon State Bar, acknowledged in an email to the Oregonian that its investigation has “been a long process.”

“This is primarily due to the complexity of the matter and the volume of documents involved,” Dopps wrote. “I can’t give you an update on when the investigation will be finished or what the outcome will be (Dismissal, Public Reprimand, Suspension, Disbarment, etc.), but I can say that our Disciplinary Counsel’s Office is still actively working on it.”