April 30, 2013 9:37 PM
Jim E. Winburn, Staff Writer
VICTORVILLE • A City Councilwoman and former bond broker for the municipal airport authority blame what they called “handshake deals” for the questionable financial practices that ultimately led to this week’s fraud allegations against Victorville by the U.S. Securities and Exchange Commission.
Jeffrey Kinsell, owner of the brokerage firm Kinsell, Newcomb & De Dios, said Tuesday that Victorville’s accountability problem began with just such an undocumented deal with an airport hangar developer.
Victorville City Councilwoman Angela Valles on Tuesday cited “handshake deals” involving former City Manager Jon Roberts and others that led to the SEC lawsuit filed in U.S. District Court in Los Angeles on Monday. Even the SEC cited a 2006 “handshake deal” in its court complaint.
But it’s still unclear who might have been involved in a deal to get four hangars built at Southern California Logistics Airport using municipal bonds backed by what the SEC alleges were inflated property values.
“As far as I know, and what I’ve read so far, there has been no real identification of who was involved in the handshake deals,” said former City Councilman Terry Caldwell, who added that anyone involved in those kinds of undocumented agreements would have been identified by now. “I do know that people, including Valles, have said over time there were handshake deals, and it raises speculation that everybody is involved — it’s not fair, and it amounts to making blanket assertions.”
The SEC on Monday filed suit against the city, its airport authority, the brokerage firm KND, Kinsell and Assistant City Manager Keith Metzler, saying that they defrauded investors when they issued bonds used to build the hangars at SCLA. (Read the full complaint here.)
Many of those involved in getting the hangars built are no longer in the area.
Kinsell claims the deal was made between Victorville’s former City Manager Jon Roberts and Will Graven, owner of CBS Aviation Development, which initially was contracted to build the hangars. They left after building two hangars, according to former City Councilman Mike Rothschild. That’s when KND entered into the project.
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