A Denver judge has ordered that $174,000 belonging to accused fraudster Steve Bachar must be split among people he owes $5.5 million to rather than be returned to him.
District Court Judge Kandace Gerdes’ order ends a four-month-long dispute involving a restitution check, a theft victim who didn’t want it and several unrelated victims who did.
In March, Bachar turned over $174,370 to the Denver District Court as part of a plea agreement for felony and misdemeanor theft. The money was supposed to go to Jamie Lindsay, a 74-year-old North Carolina man who Bachar had admitted stealing $125,000 from.
But Judge Eric Johnson unexpectedly rejected the plea agreement at Lindsay’s request March 10, scheduled a September trial, and ordered that the money be given back to Bachar. Then, before it could be returned, two companies and a person who are owed about $5 million by Bachar filed motions to garnish that $174,370 of erstwhile restitution.
That put Nikolaus Zender, clerk of the Denver District Court, in a tough position. Should he comply with Johnson’s order or comply with garnishment orders signed by three other judges? In his 23 years on the job, he had never seen a situation like this. So, he kept the money in the court’s trust account until the matter could be decided by yet another judge.
That judge was Gerdes, who listened to four hours of debate on June 27 and Thursday.
On one side of her courtroom was Future Health Co. in California (owed $3.8 million by Bachar), DaVita (owed $700,000), local retiree Robert Hanfling (owed $271,000 by Bachar) and ex-wife Susan Bachar, who filed a motion to garnish in April and said she’s owed $690,000.
Their half-dozen attorneys argued that the money in the court’s account was Bachar’s and therefore garnishable, just as it would be if it was sitting in a bank account. They told Gerdes that their four clients had an agreement to split the $174,370 amongst themselves and they just needed the judge to order the clerk of the court to hand the money to them.
“The last thing that any of us wants — and I think this includes the court and the Attorney General’s Office — is for these funds to go back to a known thief and criminal,” said John Bernstein, an attorney for Future Health, last month. “All that would do is enhance the crimes that he has already committed against many, many people.”
Bachar has not been convicted of a crime. He will face charges of securities fraud and theft at a four-day trial starting Sept. 26. The court judgments that Future Health, DaVita and Hanfling won against Bachar were default judgments after he ignored their lawsuits.
On the other side of the courtroom was Assistant Attorney General LeeAnn Morrill, representing Zender. She said she was “sympathetic to the plight” of Bachar’s creditors but worried about the precedent being set by the garnishment of restitution money. “Worst case scenario,” a violent crime victim’s restitution could be garnished before the victim is paid, she warned.
“That’s what this is all meant to avoid,” Morrill told Gerdes last week.
Bachar did not attend either hearing and Gerdes noted his absence on both occasions. Susan Bachar attended the first hearing June 27 but not last week’s discussion.
On June 27, Gerdes tentatively sided with Morrill, finding that the $174,370 could not be garnished because it had not yet been returned to Bachar. Then, on June 30, Judge Johnson ordered that the money be returned to Bachar. With that, the money became garnishable and Gerdes ordered that it be sent to Bachar’s creditors rather than him Thursday.