By Mark Waite

Henry “Butch” Neth, a former Nye County Commissioner from 2000 to 2004 and member of a prominent Pahrump real estate family, was indicted by a Clark County grand jury last week on four counts of securities fraud and one count of embezzlement.

Neth’s indictment, along with his partner Eric Frye, came just over three years after his arrest at his Pahrump home May 14, 2009 by investigators with the Nevada Secretary of State’s office.

A preliminary hearing was originally scheduled in September 2009, but had been repeatedly postponed. A grand jury serves as an alternative to a preliminary hearing.

An arraignment has been scheduled for 9 a.m., June 6 in Eighth District Court Department 14 in Las Vegas, before acting Judge Charles Thompson.

The charges concern the offer and sale of securities in Stockton Jane LLC, for a project in Kingman, Ariz. back in May 2005.

The indictment charges Neth and Frye with representing to Jonathon Baktari and/or Sassan Kaveh they would use $200,000 Baktari and Kaveh invested to purchase land in Arizona on behalf of the Stockton Jane LLC, when Neth and Frye already used the money to purchase 252 acres of land in their names.

They also falsely represented they would develop the property with the funds.

The seller of the land, Joe Ott, didn’t want the limited liability corporation to have title or carry the note on the property, a fact that wasn’t disclosed to investors, according to the indictment.

The other counts involve similar accusations concerning investments of $25,000 in Stockton Jane LLC by Abdi Raissi, by Carlos, Louis and Nicole Vargas and by Jennifer and Greg Pender about that same time.

The embezzlement count involves charges Neth and Frye on May 16, 2005 used $570,000 of Stockton Jane LLC funds to pay a deposit on the 252 acres in their names.

The indictment adds between June 16, 2005 and June 24, 2006, over 29 separate transactions transferred $1,343,800 of Stockton Jane LLC funds to the account of Eagle View Group Inc.

Another $300,000 of Stockton Jane LLC money was used to pay Meecorp Capital Markets for services rendered to Eagle View Group on June 24, 2005.

Still another $261,200 of investor funds was diverted for purposes unconnected to the acquisition and development of the Stockton Jane project, the indictment states.

At the time of their arrest, Secretary of State Ross Miller released this statement: “This appears to be a case in which investors thought they would be getting an unheard of return, perhaps because the suspect had held elected office in the community.”

“The prospect of a 123 percent return certainly falls under the category of too good to be true, but the fact that it’s being offered by a former elected official might add credibility for some investors. It should serve as further warning that dealing with unlicensed brokers or dealers of unregistered securities is virtually always a losing proposition for the investors,” Miller said.

Neth won election in November 2000 to a Nye County Commission District 3 seat, defeating David Cleveland 1,923 votes to 1,698. Cleveland, the former prosperous owner of Valley Homes, a Pahrump mobile home business, is now serving a 16-year prison term for driving under the influence causing a death, after a November 2006 traffic accident.

But Neth, who often flew a private plane to commission meetings in Tonopah, lost badly in the September 2004 primary, gathering only 110 votes.

Neth and Frye had agreed to pay $750,000 to 14 plaintiffs as part of a confession in a civil case that concluded in 2008. That stemmed from a lawsuit filed Oct. 30, 2007 that claimed Neth and Frye recruited 62 people to invest from $25,000 to $250,000 in Stockton Jane LLC.

The Kingman property was purchased for $23,500 per acre, for a total of more than $5.9 million, according to documents filed in the civil case. The property was master planned for 957 lots of 6,000 square feet or less. It was intended to be an innovative, environmentally friendly project.

Neth is seen on a videotape at an investors meeting in September 2007 admitting he diverted funds partly to pay for a concrete culvert and other costs on another 113-acre project.

Neth said on the videotape: “I had no idea the market was going to turn and I could have never predicted it. So I made the decision to loan that $1.4 million to the 113 acres .”

Provenza Neth Properties was first incorporated in Pahrump in 1973.