A U.S. district judge has awarded a group of Idaho Springs investors $8.7 million after a title company failed to respond in court to allegations that it stole $4.5 million from the investors and distributed the cash to personal accounts.

The 35-investor Mighty Argo Cable Car Group deposited the $4.5 million into an escrow account with Virginia-based First Title Inc. in August 2020 as part of an equity deposit on a $34 million construction loan to build a gondola-anchored resort village in Idaho Springs.

The investors sued the owners of First Title in April 2021, arguing Sandra Bacon and Chrisheena McGee stole the deposit and distributed it to personal accounts while sharing fake documents to hide their theft. The women, according to the Argo group, emailed the group bank documents where they added a “7,1” to statements, so a bank account with $20,803.89” read as $7,120,803.89.

When the Argo group sued and filed requests for paperwork for their agreement, the owners of First Title responded by pleading for protection against self-incrimination provided by the U.S. Constitution’s Fifth Amendment. U.S. District Judge Regina M. Rodriguez in January ordered the two women and First Title to respond, because corporations do not have rights under the Fifth Amendment.

No one has heard anything from Bacon, McGee or First Title since.

Derek Deyon, the Houston-based attorney who the Argo group says received $200,000 of their money from Bacon and McGee to serve as the women’s counsel, declined to comment on the judgment, saying “we really didn’t mount a defense and we didn’t respond to discovery.”

But … why not?

“No comment,” Deyon said.

On Tuesday, Rodriguez awarded the Argo group $4.36 million in actual damages and another $4.36 million in punitive damages.

“The defendants here not only purposefully defrauded the plaintiff out of millions of dollars, they also took numerous steps to try to cover up their fraud,” Rodriguez ruled in the civil case. The investors are hoping the ruling will prod law enforcement officials to look into the case and pursue criminal charges.

It’s hard to imagine Bacon and McGee writing a check to pay the settlement considering they never bothered to respond to the allegations they stole $4.5 million. But the Argo group has been moving its project forward, despite the costly delay.

The group of friends from Idaho Springs estimates construction costs for their project have climbed by more than $2 million in the past two years. The group had hoped to be well underway by now, with land acquisition, installation of an $8.3 million gondola climbing 1.2 miles from the banks of Clear Creek to a $2.3 million mountaintop plaza and construction of a $4.7 million three-story parking garage in the city.

The development is the planned first phase of a redevelopment of the Argo Mill and Tunnel, where miners carved a 5-mile tunnel to harvest and mill $1 trillion worth of gold in the 1800s. The gondola was the first step in plans for a hotel, convention center, homes and a village surrounding the historic mill in Idaho Springs.

The group still has an outstanding claim against Dallas-based Trivecta Lending and its owner Jay Matthiesen, who organized the $34 million construction loan deal. The Argo investors argue Matthiesen “fraudulently induced” the Argo group to work the deal with First Title to line up funding for his company and worked with Bacon and McGee as part of the scheme to defraud the investors. The Argo group argues Matthiesen never had money to lend for the construction loan and took $150,000 from the two women and filtered it through different holding companies before it ended up with Matthiesen’s wife, Carrie Matthiesen, for renovations of the couple’s home.

“Matthiesen was part of the fraudulent scheme by misrepresenting, concealing and failing to disclose material facts,” reads the group’s amended complaint adding Matthiesen earlier this year.

Matthiesen, in a response filed in the case in May, said he was unable to close the construction loan deal because First Title never transferred the $4.5 million in escrow. He denied any fraudulent conduct involving the escrow payment. He admits taking $150,000 from First Title and spending that money, but “denies that he knew the funds were Mighty Argo’s funds,” his May response reads.

Mary Jane Loevlie, the Idaho Springs entrepreneur leading the Argo project and village development, said her group was pleased with the judgment.

“It’s definitely a win,” she said, acknowledging the challenge of collecting from people who never responded to the allegations of theft.

Since the two women stole their money, the Argo investors have found a new lender and more investors to keep the project moving. The city extended the development timeline and investors remain “steadfast and stalwart,” Loevlie said. This fall crews plan to bury power lines to support the gondola. Crowds have been thick in Idaho Springs this summer and tours of the group’s Argo Mill have been selling out, she said.

“Idaho Springs is becoming this cool and vibrant place that we always knew it was and now everyone is realizing,” Loevlie said. “We are confident this project is going to be built.”

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