Pilots of America Message Board

Home Live Chat
Go Back   Pilots of America Message Board > Pilot's Lounge > Hangar Talk

Hangar Talk Open forum for discussion of any topic you like, aviation related or otherwise (but no spin zone material, see below).

Virtually all topics in this forum are permitted - so long as they are discussed in a civil manner.

NOTE: Politics and religion and any other topic likely to become highly charged must be posted in The Spin Zone. To gain access to the Spin Zone, click this link and join the Spin Zone group.

Closed Thread
 
Thread Tools Display Modes
Old January 24th, 2010, 10:45 PM   #1
Dave Siciliano Dave Siciliano is offline
(User ID: Dave Siciliano)
Final Approach
 
Dave Siciliano's Avatar
 
Join Date: Feb 2005
Location: Dallas, Texas
Posts: 6,429
Baron Thomas charged with fraud

From the Beechlist.

Best,

Dave

Looks like they sold over $10,000,000 in investments with planes as collateral. Advertised in TAP. This won't be pretty.
===========================================


http://images.edocket.azcc.gov/docketpdf/0000107510.pdf

Jan 5, 2010. Barron Thomas Aviation is being called before the Arizona Corporation Commission Securities Division to answer the charge of selling unregistered securities:

"An Arizona investor purchased a $50,000 12% Investment from BT and 3TA on or about March 14, 2005. On April 22, 2005, BT and BTA used the Arizona investor's money to repay the prior Texas investor. BT and BTA then caused a new FAA Lien to be effected in favor of the new Arizona investor on the N8194W Airplane.

However, unbeknownst to either the Texas or Arizona investor, the blue and white 48194W Airplane was at all times relevant laying in pieces in an open air storage yard in a severely deteriorated state. The N8194W Airplane is comprised of a separated, dented fuselage with faded paint, no wings, no landing gear and includes other defects."
Dave Siciliano is offline  
Old January 24th, 2010, 11:39 PM   #2
"Smooth Talker" SCCutler is online now
(User ID: SCCutler)
Administrator
PoA Test PilotPilots Of America Management
 
SCCutler's Avatar
 
Join Date: Feb 2005
Location: Dallas
Posts: 13,732
Send a message via AIM to SCCutler
Re: Baron Thomas charged with fraud

Oh my.

And I thought he was just a dick because he would not return my calls when I wanted to buy an airplane from him.

Small favors ... thank you, Lord!
__________________
Time to fly.
SCCutler is online now  
Old January 25th, 2010, 12:20 AM   #3
Nathan young nyoung is offline
(User ID: nyoung)
Pre-takeoff checklist
 
nyoung's Avatar
 
Join Date: Aug 2008
Location: Cary, IL
Posts: 364
Re: Baron Thomas charged with fraud

I've never personally engaged with BT, but always thought his practice of redacting N-numbers from both the text and .jpgs in his advertisements was strange... it did not leave me with a good impression.


Quote:
Originally Posted by Dave Siciliano View Post
From the Beechlist.

Best,

Dave

Looks like they sold over $10,000,000 in investments with planes as collateral. Advertised in TAP. This won't be pretty.
===========================================


http://images.edocket.azcc.gov/docketpdf/0000107510.pdf

Jan 5, 2010. Barron Thomas Aviation is being called before the Arizona Corporation Commission Securities Division to answer the charge of selling unregistered securities:

"An Arizona investor purchased a $50,000 12% Investment from BT and 3TA on or about March 14, 2005. On April 22, 2005, BT and BTA used the Arizona investor's money to repay the prior Texas investor. BT and BTA then caused a new FAA Lien to be effected in favor of the new Arizona investor on the N8194W Airplane.

However, unbeknownst to either the Texas or Arizona investor, the blue and white 48194W Airplane was at all times relevant laying in pieces in an open air storage yard in a severely deteriorated state. The N8194W Airplane is comprised of a separated, dented fuselage with faded paint, no wings, no landing gear and includes other defects."
nyoung is offline  
Old January 25th, 2010, 01:10 AM   #4
Wayne wabower is offline
(User ID: wabower)
Touchdown! Greaser!
 
wabower's Avatar
 
Join Date: Sep 2008
Posts: 12,018
Re: Baron Thomas charged with fraud

Not uncommon for brokers who know their listing agreements may expire prior to the time the airplane is sold. They don't want to provide potential buyers with information that would allow them to make direct contact with the owner. Their position is that they incurred the expense of running the ad and will not be reimbursed by commission earnings unless it sells.

Quote:
Originally Posted by nyoung View Post
I've never personally engaged with BT, but always thought his practice of redacting N-numbers from both the text and .jpgs in his advertisements was strange... it did not leave me with a good impression.
wabower is offline  
Old January 25th, 2010, 01:58 AM   #5
FBH N801BH is online now
(User ID: N801BH)
Final Approach
 
N801BH's Avatar
 
Join Date: Jul 2008
Location: Jackson Hole Wy
Posts: 8,818
Send a message via Yahoo to N801BH
Re: Baron Thomas charged with fraud

Quote:
Originally Posted by wabower View Post
Not uncommon for brokers who know their listing agreements may expire prior to the time the airplane is sold. They don't want to provide potential buyers with information that would allow them to make direct contact with the owner. Their position is that they incurred the expense of running the ad and will not be reimbursed by commission earnings unless it sells.
For BT that is the least of their problems.
N801BH is online now  
Old January 25th, 2010, 09:06 AM   #6
Wayne wabower is offline
(User ID: wabower)
Touchdown! Greaser!
 
wabower's Avatar
 
Join Date: Sep 2008
Posts: 12,018
Re: Baron Thomas charged with fraud

Agreed. He's been advertising (apparently) non-existent airplanes for many years. In fairness, airplanes similar to the ones he listed probably existed, he just didn't happen to have a listing agreement to sell them. But if you lock up all the airplane traders who employ similar tactics, the airports are going to have a glut of rental space on their hands.

At one time a local friend owned a B-90. One day the big snake-oil broker in Florida called and tried to sell it to him.

Quote:
Originally Posted by N801BH View Post
For BT that is the least of their problems.
wabower is offline  
Old January 25th, 2010, 09:35 AM   #7
denny Dr. O is offline
(User ID: Dr. O)
Pattern Altitude
 
Join Date: Sep 2008
Location: Hemlock, MI
Posts: 1,763
Re: Baron Thomas charged with fraud

A fella at our local airport took a fancy to one of Mr. Thomas' listings... When he called, they kept insisting that they had to have his credit card numbers to show he was serious BEFORE they could discuss the airplane with him because of wasting their time with tire kickers... He wisely hung up on them...

And any damn fool who believes he is going to get 12% on his money, over the phone, deserves what he got...

denny-o
Dr. O is offline  
Old January 25th, 2010, 09:43 AM   #8
steingar steingar is offline
(User ID: steingar)
Touchdown! Greaser!
 
steingar's Avatar
 
Join Date: Feb 2007
Posts: 19,043
Re: Baron Thomas charged with fraud

There was a long thread about BT eating aircraft deposits on the Red Board. Sounds like its about time.
steingar is offline  
Old January 25th, 2010, 09:48 AM   #9
iBazinga! ScottM is offline
(User ID: ScottM)
Taxi to Parking
PoA Test Pilot
 
ScottM's Avatar
 
Join Date: Jul 2005
Location: Variable, but somewhere on earth
Posts: 42,570
Re: Baron Thomas charged with fraud

BT and fraud. Wow color me surprised. NOT!
__________________
Scott
CP-ASEL-IA
'80 Piper PA28-161
AOPA ASNV 10C (Galt: Greenwood, IL)

------------------------
See, some peckerwood's gotta get the thing up.
And some peckerwood's gotta land the son of a bitch.
And that "peckerwood" is called a "pilot".

States I have flown in
-----------------------

ScottM is offline  
Old January 25th, 2010, 10:43 AM   #10
Bill Burkett Trapper John is offline
(User ID: Trapper John)
Banned
 
Join Date: Feb 2008
Location: Headley Grange
Posts: 8,158
Re: Baron Thomas charged with fraud

That attachment starts getting pretty interesting around page 14. His previous history in Texas was an eye-opener, too...


Trapper John
Trapper John is offline  
Old January 25th, 2010, 10:48 AM   #11
Bill S. wsuffa is offline
(User ID: wsuffa)
Administrator
PoA Test PilotPilots Of America Management
 
wsuffa's Avatar
 
Join Date: Feb 2005
Location: DC Suburbs
Posts: 18,198
Re: Baron Thomas charged with fraud

Quote:
Originally Posted by wabower View Post
Not uncommon for brokers who know their listing agreements may expire prior to the time the airplane is sold. They don't want to provide potential buyers with information that would allow them to make direct contact with the owner. Their position is that they incurred the expense of running the ad and will not be reimbursed by commission earnings unless it sells.
There are ways to protect one's self against that as a broker.

Many real estate agents have used the same trick for a couple of reasons:

1) to force the prospective buyer to call and build a "relationship" - and hopefully upsell them to something more expensive,
2) to justify the fees by leading the "great unwashed" buyer through the process, and
3) to prevent the prospective buyer from doing due-diligence prior to presenting the property, meaning that the broker controls more of the information flow.

It's all about "sell" and "upsell", and about forcing the buyer to make more of a commitment to the deal.

yeah, there are risks, but it's part of the job.

Fortunately, the internet has made a difference in information flow and the ability of brokers to pull off some of these stunts.

Quote:
Originally Posted by smigaldi View Post
BT and fraud. Wow color me surprised. NOT!
Now if we can get a few of the other charlatans....
__________________
Courage is the price that life exacts for granting peace. The soul that knows it not, knows no release from little things; knows not the livid loneliness of fear. - Amelia Earhart


Places I've landed
wsuffa is offline  
Old January 25th, 2010, 11:15 AM   #12
TangoWhiskey TangoWhiskey is offline
(User ID: TangoWhiskey)
Touchdown! Greaser!
 
TangoWhiskey's Avatar
 
Join Date: Feb 2005
Location: Fort Worth, TX
Posts: 11,937
Re: Baron Thomas charged with fraud

Question for the business lawyers: When does soliciting business investments / operating capital from private investors cross the line to "offering securities"? If I solicit and obtain venture capital, or investments from friends and relatives, is that illegal? Or is it the scope of what BT did, the "holding out" (in aviation parlance) in TAP advertisements, that crossed a line?
__________________
Troy W. - "Tango Whiskey"
Fort Worth TX
PP-ASEL-IA

Places I have flown:


"In a world full of people, only some want to fly. Isn't that crazy?!" - Seal, Crazy, 1990
TangoWhiskey is offline  
Old January 25th, 2010, 11:46 AM   #13
TangoWhiskey TangoWhiskey is offline
(User ID: TangoWhiskey)
Touchdown! Greaser!
 
TangoWhiskey's Avatar
 
Join Date: Feb 2005
Location: Fort Worth, TX
Posts: 11,937
Re: Baron Thomas charged with fraud

The documents describe paying off one investor's principal using the funds from new incoming investors... can you spell p - o - n - z - i ?
__________________
Troy W. - "Tango Whiskey"
Fort Worth TX
PP-ASEL-IA

Places I have flown:


"In a world full of people, only some want to fly. Isn't that crazy?!" - Seal, Crazy, 1990
TangoWhiskey is offline  
Old January 25th, 2010, 12:52 PM   #14
Harley Reich Lawreston is offline
(User ID: Lawreston)
En-Route
 
Lawreston's Avatar
 
Join Date: Feb 2005
Location: Georgetown, ME
Posts: 4,308
Re: Baron Thomas charged with fraud

Put him in to room with Bernie so they can compare notes.

HR
Lawreston is offline  
Old January 25th, 2010, 01:22 PM   #15
Wayne wabower is offline
(User ID: wabower)
Touchdown! Greaser!
 
wabower's Avatar
 
Join Date: Sep 2008
Posts: 12,018
Re: Baron Thomas charged with fraud

Certain exemptions are available, depending on whether you're making a private or a public offering. If you advertise publicly (as Thomas did with his trade-a-plane ads) you obviously face more scrutiny and must jump through more hoops.

If you only sell privately and only to "accredited" investors (generally defined as financially sohpisticated folks with tangible net worth--excluding their home--in excess of a mil, high income, etc you can have offer to as many as you want, and admit quite a few. There are also exemptions if you don't get compensated for the sale, don't publicly advertise for investors, blah.

By definition, almost any activity for which you provide common management to a group of others who provide the money involves the sale of a security, and the term is almosta s broad as some FAR's. Beaver pelts, for example, have been deemed a security by the regulators.

My "real" career in investment banking and syndication was mostly with privately offered securities. The rules are somewhat tricky. Most people simply don't know what they need to know.

Quote:
Originally Posted by TangoWhiskey View Post
Question for the business lawyers: When does soliciting business investments / operating capital from private investors cross the line to "offering securities"? If I solicit and obtain venture capital, or investments from friends and relatives, is that illegal? Or is it the scope of what BT did, the "holding out" (in aviation parlance) in TAP advertisements, that crossed a line?
wabower is offline  
Old January 25th, 2010, 01:31 PM   #16
TangoWhiskey TangoWhiskey is offline
(User ID: TangoWhiskey)
Touchdown! Greaser!
 
TangoWhiskey's Avatar
 
Join Date: Feb 2005
Location: Fort Worth, TX
Posts: 11,937
Re: Baron Thomas charged with fraud

Quote:
Originally Posted by wabower View Post
The rules are somewhat tricky. Most people simply don't know what they need to know.
And that's why there are attorneys to advise us... of course, that presumes you're trying to play by the rules. ;-)

I think reading this one paragraph from his offering, which labeled only one risk to the investment and was laden with grammatical errors, and the use of the word "part" instead of "par", would have been sufficient to raise flags in my mind. If this doesn't scream "I wrote this myself without the help of an attorney", nothing does.

Quote:
Risk: The risk in this deal is a cataclysmic world event that completely stops aircraft sales and exhausts our ability to make interest payments (or sell the airplane) until the panic subsides and the market returns to normal. Our feeling is that, in such a disaster, most all other business situations will experience the same business interruption, so the risk in our deal is probably on part with most other business.
__________________
Troy W. - "Tango Whiskey"
Fort Worth TX
PP-ASEL-IA

Places I have flown:


"In a world full of people, only some want to fly. Isn't that crazy?!" - Seal, Crazy, 1990
TangoWhiskey is offline  
Old January 25th, 2010, 01:36 PM   #17
Wayne wabower is offline
(User ID: wabower)
Touchdown! Greaser!
 
wabower's Avatar
 
Join Date: Sep 2008
Posts: 12,018
Re: Baron Thomas charged with fraud

Even a simple private placement offering memorandum can easily be 50-60 pages. I usually start by reading the first page of the proposed business plan, then the sections on risk factors and management compensation. If those make any sense, I might read more.

Quote:
Originally Posted by TangoWhiskey View Post
And that's why there are attorneys to advise us... of course, that presumes you're trying to play by the rules. ;-)

I think reading this one paragraph from his offering, which labeled only one risk to the investment and was laden with grammatical errors, and the use of the word "part" instead of "par", would have been sufficient to raise flags in my mind. If this doesn't scream "I wrote this myself without the help of an attorney", nothing does.
wabower is offline  
Old January 25th, 2010, 02:07 PM   #18
murphey murphey is online now
(User ID: murphey)
En-Route
 
murphey's Avatar
 
Join Date: Aug 2008
Location: Colorado
Posts: 4,613
Re: Baron Thomas charged with fraud

Quote:
Originally Posted by nyoung View Post
I've never personally engaged with BT, but always thought his practice of redacting N-numbers from both the text and .jpgs in his advertisements was strange... it did not leave me with a good impression.
BT did not always have the contract to sell an airplane he was advertising.

I did attempt to purchase an airplane from him once. At the time, my father (a retired used car salesman) lived in Phoenix and was negotiating for me. Dad called me one afternoon and told me to stay far away from BT. Dad called to set up an appointment to see the airplane. BT responded that he'd just sent the plane out for a new paint job.

Now, both in the airplane biz and the car biz, the only reason you'd paint the vehicle before letting someone see it was due to damage. Or worse.

The cockles of my heart are warming...BT deserves being tossed in the county lockup (Sheriff A, have fun!) with a couple guys from the deep south named Bubba.....
murphey is online now  
Old January 25th, 2010, 03:46 PM   #19
Tim Winters timwinters is online now
(User ID: timwinters)
Final Approach
 
timwinters's Avatar
 
Join Date: Feb 2008
Location: SEMO (H88 & 0T3 & CGI)
Posts: 6,120
Re: Baron Thomas charged with fraud

Quote:
Originally Posted by smigaldi View Post
BT and fraud. Wow color me surprised.


Quote:
The N8194W Airplane is comprised of a separated, dented fuselage with faded paint, no wings, no landing gear and includes other defects
I really love that part. Other defects? Like the ones listed aren't enough?
__________________
Best,
Tim
C182A, N5057D
Ms. DueBeUs
H88 & 0T3 & CGI

Quote:
Originally Posted by timwinters
Turning every thread into a political debate doesn't make you an intellectual, no, it just makes you a dick
This space for rent, place your ad here!

Last edited by timwinters; January 25th, 2010 at 03:57 PM.
timwinters is online now  
Old February 3rd, 2010, 08:48 PM   #20
John Baker John Baker is offline
(User ID: John Baker)
Final Approach
 
John Baker's Avatar
 
Join Date: Oct 2008
Location: San Diego, California
Posts: 7,289
Re: Baron Thomas charged with fraud

Quote:
Originally Posted by SCCutler View Post
Oh my.

And I thought he was just a dick because he would not return my calls when I wanted to buy an airplane from him.

Small favors ... thank you, Lord!
That exact same thing happened to me. Then he sends me cards wanting to buy my airplane. I called him about it, in essence saying why should I sell him my plane when he refused to sell me one. He said "I simply did not work hard enough, in my efforts to buy from him." I could not believe he was saying that to me. I told him to take me off his mailing list, never happened, I still get the cards.

John
__________________
So the maples formed a union
And demanded equal rights
'The oaks are just too greedy
We will make them give us light'
Now there's no more oak oppression
For they passed a noble law
And the trees are all kept equal
By hatchet, axe and saw.

~ Rush
John Baker is offline  
Old February 4th, 2010, 07:56 AM   #21
Bill Burkett Trapper John is offline
(User ID: Trapper John)
Banned
 
Join Date: Feb 2008
Location: Headley Grange
Posts: 8,158
Re: Baron Thomas charged with fraud

Quote:
Originally Posted by John Baker View Post
I told him to take me off his mailing list, never happened, I still get the cards.
LOL, I guess you'll know when he goes to the can after the return address changes to, "Federal Bureau of Prisons".


Trapper John
Trapper John is offline  
Old February 4th, 2010, 11:31 AM   #22
denny Dr. O is offline
(User ID: Dr. O)
Pattern Altitude
 
Join Date: Sep 2008
Location: Hemlock, MI
Posts: 1,763
Re: Baron Thomas charged with fraud

*My "real" career in investment banking and syndication*

My real career from puberty on has been deflowering virgins, drinking beer with various young ladies in the back seat of a 51 Ford (with fogged windows), working on my tan and looking studly...
Unfortunately, it didn't pay enough and I was forced to get an education and take a job (bummer)...
OTOH, I should have gone to Hollywood, taken a job wiping tables and been discovered so I could have been a Shawn Penn, etc. making 10-20 mil a flick., banging Pretty Woman, jumping on couches, etc...
Damn, the regrets I have...

denny-o
Dr. O is offline  
Old February 4th, 2010, 11:49 AM   #23
TangoWhiskey TangoWhiskey is offline
(User ID: TangoWhiskey)
Touchdown! Greaser!
 
TangoWhiskey's Avatar
 
Join Date: Feb 2005
Location: Fort Worth, TX
Posts: 11,937
Re: Baron Thomas charged with fraud

Quote:
Originally Posted by Trapper John View Post
LOL, I guess you'll know when he goes to the can after the return address changes to, "Federal Bureau of Prisons".


Trapper John
From what I read of the complaint documents linked at the top of this thread, they weren't pursuing prison time; just "cease and desist" and "make good on the investments already made".
__________________
Troy W. - "Tango Whiskey"
Fort Worth TX
PP-ASEL-IA

Places I have flown:


"In a world full of people, only some want to fly. Isn't that crazy?!" - Seal, Crazy, 1990
TangoWhiskey is offline  
Old February 4th, 2010, 11:57 AM   #24
Bill Burkett Trapper John is offline
(User ID: Trapper John)
Banned
 
Join Date: Feb 2008
Location: Headley Grange
Posts: 8,158
Re: Baron Thomas charged with fraud

Quote:
Originally Posted by TangoWhiskey View Post
From what I read of the complaint documents linked at the top of this thread, they weren't pursuing prison time; just "cease and desist" and "make good on the investments already made".
That's because it's a state Securities Commission complaint. Start reading around page 14, and it doesn't take much imagination to see a prosecutor investigating and eventually filing fraud charges.


Trapper John
Trapper John is offline  
Old February 16th, 2010, 05:24 PM   #25
Mooney E mauricefrompolo is offline
(User ID: mauricefrompolo)
Filing Flight Plan
 
Join Date: Feb 2010
Posts: 10
Re: Baron Thomas charged with fraud

If you will check out the ads that Barron Thomas has right now (Feb 2010) he has a 1963 Mooney "C" for $28500. The first time I called he answered me right back and said that he had a deposit on it from a buyer and would keep me posted on what transpired. Two weeks later I called him to see what the tail number of the plane was. No response. I called every day for a week. Finally he answered the phone and replied, "if you want to send a deposit I will show you the tail numbers when you arrive on site". What kind of idiot does he think people are anyway?
mauricefrompolo is offline  
Closed Thread
Home Register New Posts Today's Posts
Go Back   Pilots of America Message Board > Pilot's Lounge > Hangar Talk

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
So, what happened to Thomas Jefferson? John Baker Hangar Talk 43 December 5th, 2008 09:32 AM
Jay Thomas and the Lone Ranger Tom-D Hangar Talk 2 April 8th, 2008 01:13 PM
Dylan Thomas Anyone? poadeleted1 Hangar Talk 3 March 25th, 2006 05:39 AM


All times are GMT -4. The time now is 01:56 AM.


Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
(c) 2005 - Pilots of America