Gordian knot still confounds victims of convicted banker

The mess that tangled bankers, banking customers and business associates of Frederick Allison, the former New Frontier Bank vice president, continues to defy those who seek to untie the Gordian knot left behind by the convicted banker.

Allison’s fraud and other criminal acts started in the early part of this century, and fallout continued as late as June this year as the now-released Allison attempted to avoid repayment of debts. The latest: An effort to use the bankruptcy court to release him from debts assigned to him in civil suits. The largest of his creditors, however, isn’t having any of it and has asked the court to enforce judgments against him, with interest, now totalling $912,831.

The background

Allison served as a vice president of the now defunct New Frontier Bank from March 10, 1999, to Feb. 27, 2003, when he was fired. During his tenure, and after, he was engaged in activities that resulted in felony convictions.

In a Larimer County case, Allison in December 2003 “gifted” a Toyota 4Runner to a man who then used the vehicle as collateral on a $15,000 loan from New Frontier Bank. New Frontier held the title to the vehicle. The loan proceeds were given to Allison, who continued to use the 4Runner. Allison then applied for a duplicate title and used the duplicate title to pawn the vehicle at Central Cycle in Fort Collins. The bank and Central Cycle discovered the deception and sued. Criminal charges followed, and Allison pleaded guilty to forgery.

In a Weld County case, Allison applied in February 2003 for a $40,000 loan from a business associate, Rhonda Lesh, who handled construction loans for New Frontier. He used property near Drake as collateral. Except he didn’t own the Drake property.

The Drake property was owned by Leo Beeman, a New Frontier customer and an Allison family friend. Allison had encouraged Beeman to buy the Drake property as an investment and build a house on it. Beeman, who lived in southern Colorado, trusted Allison to help him with the redevelopment.

Allison forged Beeman’s signature on documents, including deeds, to transfer title to himself. He admitted taking out loans against the property and used the money for personal expenses.

Allison also forged Beeman’s signature on loan documents at New Frontier where he used Beeman’s certificates of deposit as collateral.

Allison pleaded guilty to theft and forgery in the Lesh case on Dec. 7, 2005.
But it would be the Beeman situation that would continue to plague Allison and result in the current litigation.

When Beeman discovered the fraud on the Drake property and the bank loans, he and Allison worked out an agreement in which Allison agreed to pay back $285,600. When Allison failed to pay, he served him with a lawsuit in March 2004. The court ruled in Beeman’s favor June 24, 2004, but Beeman was unable to collect on the debt.

Allison started his sentence — 10 years probation and two years work-release — but he violated terms of his probation and was resentenced in June 2008 to five years in prison at the Delta (Colorado) Correctional Center. He has since been released and lives in Grand Junction.

Beeman assigned the judgment to Namaste Judgment Enforcement LLC in July 2018, and Allison filed for Chapter 7 bankruptcy June 7, 2020. His claim indicates he had assets of between $0 and $50,000 but debts in excess of $1 million. Of the unsecured claims, the Namaste (Beeman) debt was by far the largest.

The case today

The court actions today revolve around whether debts of the type incurred by Allison can be discharged in a Chapter 7 bankruptcy.

In its adversary filing, Namaste argued federal law does not permit debts to be discharged if the “debt for money, property, services…[was] obtained by false pretenses, false representation or actual fraud.”

“Because the Namaste debt is based on a judgment issued as a result of Allison’s false representations, use of a materially false statement in writing relied upon by creditor with the intent to deceive, action of fraud or defalcation while acting as a fiduciary and willful and malicious injury by Allison, this debt is nondischargeable debt…,” the court case reads.

Further, the suit alleges that Allison admitted the fraud and fraudulently signed Beeman’s name to loan documents.

Allison, in response, said that his relationship with Beeman was a consensual partnership. “Mr. Allison did in fact sign Mr. Beeman’s name — with his implied consent — to various documents using Mr. Beeman’s property to secure certain loans,” according to a court filing from Allison’s attorney, Drew Moore of Grand Junction.

An affidavit that Beeman signed disagreed. “I never granted Allison permission to place my signature on any document,” he wrote.

In answers to written discovery requests, Allison also said that he intended to contest the judgment that Beeman received, but the check he wrote to pay for the legal response bounced and thus was not accepted by the court. He also said that the money he received personally in connection with the Drake property redevelopment was money “that I deemed would be profit for my use” when the project was complete.

The bankruptcy court has yet to rule on motions filed in June on the case. Neither Allison’s attorney nor Namaste’s attorney responded to requests for additional information.

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