Release of suspect in Ponzi scheme angers investors

Las Vegas Justice of the Peace Deborah Lippis reluctantly ordered jailed Pahrump developer Hans Seibt released on house arrest Wednesday — but not before chastising prosecutors for recommending it without informing his alleged victims.

Some of them, senior citizens who invested heavily in what prosecutors allege was a massive Ponzi scheme, were outraged at not being notified about his pending release.

“I’m absolutely livid,” said Sheri Cole, 64, who with her husband lost about $500,000 invested with Seibt. “I wish they would have told us that this was going to happen, so we could have gone down to court to stop it. I think he will find a way to get out of here.”

Ursula Rollins, 75, who lost $345,000 to Seibt, shared Cole’s anger.

“I think this is absolutely awful,” she said. “It’s always the criminal who gets away and the victims who get punished. I just want him in jail because I doubt very much that we’ll ever see any of our money.”

Luis Rojas, 71, a retired waiter who lost his $55,000 investment, added, “This isn’t right. It’s ridiculous that they didn’t notify us. I would have gone to the courthouse.”

Seibt, 70, has been charged with felony theft and securities fraud in a money scheme that bilked hundreds of investors, mostly his fellow seniors, out of millions of dollars.

A dozen of those investors — including Cole, Rollins and Rojas — were in court in July, when Deputy Attorney General Jeffrey Segal called the German-born Seibt a flight risk and persuaded Lippis to set his bail at $310,000.

On Wednesday, when pressed by Lippis, Segal acknowledged he failed to tell the investors that he now backed Seibt’s release as part of a compromise with the defense that bought prosecutors more time to take the case before a grand jury and file additional charges.

That drew the ire of Lippis, who accused Segal of trying to force her into putting Seibt on house arrest against the wishes of his angry investors.

“I don’t understand what I perceive to be manipulation,” she said. “That really bothers me.”

Lippis set a status check in three months for Segal to report back to her on the progress of the grand jury investigation.

Afterward, the prosecutor said he still considers Seibt a flight risk, but his concerns are lessened by the electronic monitoring that comes with house arrest. Seibt, who has been behind bars since his July 21 arrest, surrendered his passport.

“This isn’t something I’m happy about,” Segal said. “It’s an unpleasant compromise in the interest of justice. And we hope to get justice for as many of the victims as we can.”

Seibt left many investors without their life savings after he filed for bankruptcy in September 2008, reporting $70 million in debts.

Prosecutors allege Seibt used two of his companies, HSLV Development Corp. and Clark and Nye County Development Corp., to solicit investments of $10,000 or more.

He offered trust deeds, joint venture agreements and subscription agreements, all of which were supposed to be secured by parcels of land Seibt was holding in Nye County. But he is accused of exaggerating the value of the land.

Seibt told investors they would receive a return of 10 percent to 12 percent on their investments, but that ended up being a lie, prosecutors allege.

Instead of buying the land with the investment money, Seibt used the cash for his personal expenses and to pay off other investors, prosecutors allege.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135.