by George Waldon on Monday, Jun. 6, 2011 12:00 am
Joe Blankenship: "Let's do this deal and get everyone whole."
Blankenship, formerly of Little Rock and currently of Heber Springs, has told past and potential business associates that he has tapped into a cache of Yamashita's gold, a legendary treasure trove of World War II booty allegedly amassed by the Japanese during their Asian conquests.
He has been looking for financing to help get the gold out of the Philippines to Canada via Kenya in a cloak-and-dagger quest to avoid government entanglements.
"I am in Nairobi, Kenya," he wrote in an email this spring that included photos of him posing with stacks of shiny metal bars and boxes of glittering nuggets. "I realize our relationship has been strained over the past year but now is the time to put that aside and to do a business deal so that all of us ... get whole."
And he continued:
"I have a total of 1,018 kilos.... Estimated value is $42.62 million retail based on $1,373 per ounce. My contract is for a 15 percent discount, so we net $6.4 million. We need a refinery to take us out at about a 5-7.5 percent discount. That nets us $3.2 million-$4.3 million.
"For your effort, I'll give you $1 million...."
"It's the wildest scheme I've seen," said Ron Crawford, president of Maumelle's Southland Metals, who holds a $400,000 judgment against Blankenship. "His metals business is chasing suckers because it's obvious he doesn't have any gold."
According to Crawford and confirmed by others who declined to be named, Blankenship used the lure of Yamashita's gold to entice individuals to loan him money. Contacted by phone about his gold business, Blankenship didn't have much to say.
"That's just a bunch of rumors going around town," he said.
What is he up to these days?
"Just trying to help sell copies of Arkansas Business," Blankenship said before excusing himself, saying he needed to take another phone call.
Blankenship enjoyed a multimillion-dollar payday in 2002 when he sold his stake in a Little Rock email database company, Total eData Corp., to ChoicePoint Inc. of Alpharetta, Ga.
But his take on that deal, estimated at $6 million to $7 million, was later engulfed by multimillion-dollar tax problems and multimillion-dollar leveraged investments gone bad.
His gold business is believed to be connected with BFBHB Import & Export LLC of Heber Springs, led by Helen Blankenship. His mother, a retired nurse, is listed with the Secretary of State's Office as the registered agent, manager and incorporator/organizer of BFBHB, which was incorporated in November 2009.
According to Crawford, using his mother as a front is consistent with Blankenship's efforts to protect assets from a string of secured and unsecured creditors trying to collect on judgments and unpaid loans.
And as one of those unpaid, asset-chasing creditors, Crawford is in a position to know. He joins First Security Bank of Searcy in accusing Blankenship of loan fraud.
The bank's fraud allegations seem to be in limbo since it began recovering a laundry list of Blankenship assets in 2008. Crawford is pursuing assets to cover a $400,000 default judgment.
Crawford got to know Blankenship when they were partners in the Red Sky Duck Club. Crawford loaned Blankenship $300,000 in August 2009 secured by Blankenship's 40 percent stake in the Lonoke County club.
However, Blankenship had relinquished that ownership months earlier to Little Rock's Delta Trust & Bank to cover a bad debt with the bank. Crawford didn't discover this until he tried to collect after Blankenship defaulted on repaying him. These days, Blankenship is renting a 4,200-SF house on Eden Isle and is seen tooling around Heber Springs in a black Escalade. The luxury SUV is said to be titled in his mother's name to avoid creditors' claims.
Crawford said others had been financially burned by Blankenship but were reluctant to throw good money after bad or come forward because of embarrassment.
Crawford said he would not drop his legal pursuit of Blankenship and that the dispute had become more than a mission to collect money.
"That's where I'm at," Crawford said. "I'm not going to change my mind. He's already bilked too many good men. I am not going to back down."
Golden Email Excerpt
This is a portion of an email allegedly sent this spring by Joe Blankenship from Nairobi, Kenya:
"I have a total of 1,018 kilos. It was sourced from the Philippines and the Congo region of Africa. It has a purity of +23 carats. It is secured in a bonded warehouse at the airport controlled by customs. The buyer will take possession there. The product is insured for full-face amount, and the buyer will have insurance getting it home. Estimated value is $42.62 million retail based on $1,373 per ounce. My contract is for a 15 percent discount, so we net $6.4 million. We need a refinery to take us out at about a 5-7.5 percent discount. That nets us $3.2 million-$4.3 million. For your effort, I'll give you $1 million....
"Let's get this thing done and put all this shit behind us. We specifically need an investor or refinery willing to buy 1,018 kilos of unregistered dore [a bar of a semi-pure gold] that is insured and stored in a bonded warehouse in Nairobi. All paperwork will be provided to make it legal to ship via commercial flight. I am doing the final testing tomorrow morning.
"Let's do this deal and get everyone whole."
Blankenship's Crumbled Real Estate Holdings
Valley Falls Manor and More
First Security Bank of Searcy sold Blankenship's famed 14,156-SF Valley Falls Estates home for $2.15 million on March 31, 2011.
The bank recovered the west Little Rock house, built but never lived in by Blankenship, and two adjoining lots as part of a $5 million foreclosure sale on Oct. 9, 2009.
Also included in that deal were eight lots in the upscale Waterview Estates residential development in west Pulaski County and a 19.4 percent stake in the 300 Third high-rise condominium project in downtown Little Rock.
First Security sold the Valley Falls lots for $230,000 each in March and July 2010 and one of the Waterview lots for $265,000 in November 2010.
Heber Springs Property
Little Rock's One Bank & Trust recovered a 1.8-acre lot in the Eagle Bay Estates neighborhood of Heber Springs in March 2011.
Little Rock's Bank of the Ozarks recovered two Eden Isle homes from the Blankenships at a November 2010 foreclosure sale. The 4,155-SF homes in the Ridgewood neighborhood once housed the couple's parents. The lots were purchased for a combined $285,000 in June 2005.
First Security Bank sold Blankenship's 6,923-SF lakehouse in Heber Springs in December 2009 for $1.6 million. The buyer was Boating of HS LLC, led by Reynie Rutledge, chairman and CEO of the bank's holding company, First Security Bancorp.
The bank recovered the Eagle Bay Estates property in July 2008. The Blankenships bought the home for $1.25 million in February 2003.
Two homes in the Hillcrest neighborhood of Heber Springs were marked with delinquent property taxes in May 2010. The Blankenships acquired the 2,358-SF house for $125,000 and the 1,677-SF house for $90,000 in February 2007.
On Feb. 18, 2011, Little Rock's Metropolitan National Bank landed a default judgment of $328,112 against Blankenship in connection with the residential project in Little Rock.
The debt originated with a $500,000 loan on Sept. 15, 2006, to Kanis Acquisition Co. LLC, which held a 25 percent stake in Kanis Village. Metropolitan also obtained a judgment against Eric McDuffie who, like Blankenship, personally guaranteed the loan.
On July 9, 2010, Arvest Bank of Fayetteville recovered 44 residential lots in Kanis Village at a $1.85 million foreclosure sale. The property secured an April 2005 loan of $2.1 million that Kanis Village LLC used to acquire 92 acres.
The limited liability company was composed of Blankenship, McDuffie and Mike Hill.
Red Sky Duck Club
In February, Delta Trust & Bank of Little Rock sold Blankenship's 40 percent stake in the 185-acre spread 6 miles south of Lonoke near Bayou Meto for $285,000. The bank recovered his share in Red Sky in February 2009 after Blankenship defaulted on a $269,500 mortgage claim.
Snug Harbor Marina and Condominiums
Metropolitan National Bank recovered the 4.6-acre property along U.S. 98B in Panama City, Fla., in April 2010. The bank holds a $5.2 million deficiency judgment. The Snug Harbor site has 705 feet of waterfront on Watson Bayou, a deep-water inlet with access to St. Andrews Bay and the Gulf of Mexico beyond.
Never fulfilled plans called for 393 luxury condos, 140 boat slips and a dry dock storage building with 120 spaces.
Blankenship's WBBC LLC bought the property for $7 million in July 2005. Metropolitan loaned the limited liability company $7 million in August 2006.
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