Convicted BestBank president found liable in case of missing hemp

BERTHOUD — A former Boulder banker convicted in 2010, sentenced to prison and placed on the hook for $11.9 million in restitution to the Federal Deposit Insurance Corp. for bank fraud in the collapse of BestBank in 1998 has been judged, along with his son and two companies, to be at fault in a case involving the disappearance of a hemp crop.

In a case decided in Denver District Court in January 2020 and affirmed by the Colorado Court of Appeals Sept. 9, 2021, Thomas Alan Boyd, along with others, was determined to be liable for  securities fraud, untrue statements, a scheme to defraud, false representation, nondisclosure and concealment, and negligent misrepresentation. 

The case was brought by Hemp Recovery Co. LLC, which was the assignee of claims belonging to Adam A. Desmond and DD Needle Rock Farms LLC, a hemp producer. Needle Rock Farms is a Crawford, Colorado, company.

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As alleged in the lawsuit filed Feb. 6, 2019, Desmond and Needle Rock Farms, based upon representations made by Thomas Alan Boyd and his son, Christopher Boyd, agreed to transfer 4,415 pounds of hemp flower, valued at $75 per pound, to Christopher Boyd’s company, Foothills Ventures LLC of Berthoud, for processing and extraction of its CBD oil. Needle Rock and Foothills had agreed to a 50/50 split of proceeds from sale of products derived from the hemp, according to the lawsuit.

Foothills Ventures was formed in June 2017, according to Secretary of State records; the hemp was transferred in October and November 2017.

The hemp was then transferred to another company, Sling Logistics LLC, which was formed in December 2016 by Thomas Alan Boyd and Matthew Taylor. Sling was said to be in the business of wholesale brokering and transportation of marijuana and hemp. Needle Rock paid Sling $230,000 in anticipation of services.

When nothing happened, Needle Rock sought to get the hemp returned, but it could not be found, according to the lawsuit. Needle Rock also was unable to recover the $230,000.

The district court determined that Thomas Alan Boyd was liable for the securities fraud, untrue statements, and scheme to defraud charges. It also found that Thomas Alan Boyd, Christopher Boyd and Foothills Ventures were liable for charges of false representation, nondisclosure and concealment, and negligent misrepresentation.

The fourth party, Sling Logistics, defaulted in the case by not showing up at trial. Taylor was in jail at the time. He was sentenced in March 2020 to almost seven years in prison and fined $7.2 million in restitution for defrauding the U.S. government over a scheme to apply for federal tax credits for production and use of renewable fuels. According to the U.S. Department of Justice, Taylor and co-conspirators created a fake company, Shintan Inc., that they said produced biodiesel from plant and animal matter. Taylor personally received $4.5 million in tax credits. No biodiesel was produced.

The district court said that the parties, including the two Boyds, Foothills and Sling, owed Hemp Recovery $606,714, plus interest. Specifically, the court said Thomas Alan Boyd and Sling Logistics jointly and severally are responsible for $269,407 of the amount, and Thomas Alan Boyd, Christopher Boyd, Foothills Ventures and Sling Logistics are responsible for $337,306.

The appeal centered on whether Thomas Alan Boyd was, as the district court determined, an agent of Foothills Ventures, therefore making Christopher Boyd and Foothills Ventures also liable. The appeals court confirmed the district court’s conclusions.

Steve Feder of the Feder Law Firm of Denver said the plaintiffs are mostly concerned about others getting caught up in similar situations. They have not yet collected on the judgment, Feder said.

“Alan Boyd was found liable for the factoring, which is a security under Colorado law. He’s been found liable for securities fraud, and because fraud was involved, all the judgments would be nondischargeable in bankruptcy. Our clients’ concerns are how to collect and when to collect,” he said.

Calls to attorneys for the defendants — Karla Carrigan of Carrigan and Cotter Law of Littleton — were not returned prior to publication.

The original case, Hemp Recovery Co. LLC versus Thomas Alan Boyd, Christopher Boyd, Foothills Ventures LLC and Sling Logistics LLC, is 2019cv30498.  The case number for the appeal in the Colorado Court of Appeals is 2020CA451.