PORTSMOUTH
State Sen. Louise Lucas and her conference project were under state investigation this year during a time when she was asking the City Council for its support.
In a June settlement with the State Corporation Commission, Lucas agreed to offer to refund nearly $2 million with interest that she raised from about 600 private investors for the project. That was supposed to be done within 30 days, but she didn't start notifying investors until last week.
The commission alleges Lucas violated state security laws by failing to register her company with the agency before selling interests in the project to investors, according to documents on the agency's Web site.
Portsmouth Councilwoman Elizabeth Psimas said Monday that she was not aware of the investigation until recently.
The council voted July 22 not to allow Lucas to use up to $50 million in federal enterprise zone bonds for her project. The bonds, which would be backed by a bank and not the city, would allow Lucas to receive lower-cost financing.
"This is completely news to me," Psimas said.
Lucas wants to build a $60 million hotel and conference center in Portsmouth's Victory Village Business Park. The money collected by the Portsmouth Democrat has been mostly from prominent African Americans throughout Hampton Roads.
Lucas said in a recent phone interview that she didn't know she needed to register with the state when she began raising money for the project in 2006.
According to the agency's documents, Lucas neither admitted to nor denied the allegations as part of the June settlement order.
Lucas said she began notifying investors last week through phone calls that they could pick up information about the project, including documentation on the investigation, from her business headquarters in Portsmouth. She did not send the letters out sooner on the advice of one of her attorneys, she said.
According to documents on the commission's Web site:
- Investigators claim Victory Conference Center LLC, the company that Lucas created to run and oversee the conference center, broke the law by offering investments when it was not registered with the commission and by employing Lucas when she had not registered with the commission as an agent.
- As part of the order, Victory Conference Center agreed to inform all investors about the investigation's findings and offer them the opportunity to get their money back, with interest, within 30 days.
- If the investors accepted the offer for the return of their money, they were supposed to receive payment within seven days of receipt of the acceptance.
- Within 90 days, the company was supposed to submit an affidavit to the commission that stated the date each investor received the offer of their money back, the investor's response, and the amount of money that was returned to each investor and when.
According to a letter from Lucas dated Oct. 9, investors have until Nov. 15 to fill out and return paperwork on whether they would like to remain investors or whether they want their money back. The Virginian-Pilot obtained a copy of the letter from an investor.
"Today we are proud to say that our legal house is in order," states the letter, which is signed by Lucas.
Larry K. Palmer Jr. of Midlothian said he wishes he had known about the investigation sooner. Palmer, who owns a cleaning business invested $4,000 in the project with his wife. "I am a little upset and disappointed," he said.
"I expected better from professional people."
But investor Evelyn Hyman of Portsmouth said she continues to strongly support the project because she believes Portsmouth needs it.
"I've been fully informed and the decision is mine," Hyman said.
Lucas said that before information about the investigation was provided to investors, about a dozen had already asked for their money back.
"The money is in escrow," Lucas said. "Everybody who wants to get out, can get out."
Ken Schrad, a spokesman for the commission, would not reveal how the agency learned about Lucas' project or discuss details about the investigation.
Schrad said the commission routinely deals with allegations of violations of the state security laws. Many of those cases result in settlements, he said. If an entity makes a good-faith effort to comply with the terms of a settlement, the commission will work with them, Schrad said.
He described their dealings with Victory Conference Center as "an ongoing matter" that remains under investigation. Victory Conference Center LLC still is not registered with the commission but has a pending application, Schrad said.
Tony Basch, an attorney for Victory Conference Center, said letters weren't sent to investors sooner because he had hoped to get permission from the state by now to raise up to another $3 million for the project.
If they had, the documents would have explained the investigation and that investors could get their money back, he said. They would have also stated that they could invest more in the project.
"The intention was we wanted to be able to give investors a package that made sense together," laying out the story of the investigation but also providing information about the overall offering going forward, Basch said.
But on Sept. 29, Basch said the commission and Victory Conference Center could not reach an agreement on the terms.
Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com
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Where are all the posts from the Lucas investors?
Where are all the posts from the Lucas investors?
Attention Lucas Investors:
Attention Lucas Investors: Do you really know where your money is? Call her and see if she answers the phone. Ask your questions, and then report back to this blog. Ask how much of your “investment” has been spent on expenses. Ask how much interest you have earned. What is your current return on investment? Make us all eat our words. Post your findings.
TO: RENO
Yes! That was my entire point exactly.
This is a Lucas issue- her character says it all.
This is a Lucas issue- her character says it all.
when are we going to get past this white black issue
you know I am so tired of hearing the issue on black white it is the year 2008 people get over the past and live for the future. we all need to be raising our children without the race in it everyone needs to be the same we all blead RED come on how are we going to overcome the racial issues if we all don't start it for our children. if everyone one wants to judge people by their skin color and keep the past here for our children then some one needs to figure out what cities each color are allowed to live in and seprate all skin colors from one another. Please people of Virginia This includes P-Town the city that I love and will grow old in we all need to come together and find equal between us. My daughter is married to a black man and have 2 children together and I feel bad for my grandchildren that this world has to stay in the past I raise my children that there is no difference between any ones skin color under the color of the skin we are ALL ALIKE god created us all the same way sometimes i think Why didnt god just make life easy and make all people the same color or even go crazy and make people half white and half black would't that make life a whole lot easier
Lucas Needs To Resign
It is time for Senator Lucas to resign her position because she no longer represents the people of the 18th District. She represents her own self interest, her investors and special interest groups that help put her in office. When are the people who help put her in office remove her from office. The time is now. She claims "she didn't know she needed to register her company with the state when she began raising money for the project in 2006". As a State Senator she should know or at least her lawyers who advise her should know. How can Lucas while under investigation seek permission from the state to raise an additional $3 million dollars to continue with the project that everyone in their right mind has already rejected. If she cannot keep her own business house in order without violating state laws as alleged by the State Corporation Commission how can the people of the 18th District trust her. It is time for Lucas to ride off into the sunset and on the way pick up Mayor Holley of Portsmouth. Between the two they have been an embarrassment to the City of Portsmouth.
To Ira Tateu
That is because I don't feel the need to comment on everything...especially those things that don't affect me.
My new point: I wonder why
My new point: I wonder why I did not see this story published in the print edition of the newspaper. (10/15/2008) Why would the Pilot omit such an important story? Articles have appeared about this project in the past. Why is it now buried in the archives of pilotonline? The editors of the ONLY newspaper in town control the print news. They saw the reaction on the blogs and knew it would have the same reaction in the print edition. Why pull the story? The editors owe the public an explanation. By not printing the story, the Pilot is not fair and balanced. Why is negative news about Lucas so important that the Pilot would not publish it in the print edition?
To jreid8231
By the way...she is a "state" senator.
To jreid8231
I DO NOT approve of Senator Lucas's actions. If you read my comment you would see that I said I was an investor. I had good intentions to help Portsmouth revitalize that area of Portsmouth. There was never mention of a hotel when we invested. I have every intent on doing my part in correcting this issue. My point is that people should deal with the "issue" at hand and stop the hostility that is being attached. When you lose control of your emotions, you lose "clarity" in dealing with the situation. You can accomplish your goals and still be professional about it.
to: just a thought
Why you ask? Because she is a UNITED STATES SENATOR (party affiliation) and she is trying to build and ALL BLACK hotel (race issue). Now, if she were doing this the RIGHT WAY and this project was for the good of EVERYONE, then you would not be reading all negative comments here. The fact that most all the comments are negative should reflect on how the public feels of this project. It's pretty simple. Do-gooders like yourself that find no wrong in what she's doing are the type of people Sen Lucas needs for her project. Now, the only question that remains is are you friend, relative, supporter or investor?
Just a thought
"Why does everything that someone does wrong have to turn into a "race" issue or "party" affiliation?"
I will offer a straight answer. It is because there in election in a couple of weeks. Moreover, the election dicusions on these boards are very partisan. Many accusations against a certain republican candidate for president are false. Mrs. Lucas is a representative of local democrats. Many people on these boards are in the habit of touting one party (democrats) as having ownership of some moral highground. If party must be the issue it is fair game. I do not support Drake but I did not see you jumping up to defend the partisan attaks in those articles.
RENO
You missed my point completely.
To Just a Thought
Just a Thought, criminals generally are not well “thought” of.
What's Going On?
I don't usually post comments but my heart is heavy and I have something to say. I don't understand why there is so much hatred going on in the world today. The economy is in shambles, moral values are lacking, greed is running rampant, patience is short, wars are many, people are dying because they can't afford healthcare, jobs are being lost, homelessness is at an all time high, people have lost their retirement funds and all we can do as people is viciously attack each other.
Most of the comments that are being posted have "nothing" to do with the conference center and "everything" to do with something else. Why does everything that someone does wrong have to turn into a "race" issue or "party" affiliation? Why can't we address the issue without stereotypical biases? I think more than ever we need to come together as a "human" race and stand together to attack the issues and not each other. Everyone has a right to his/her opinion and if you don't agree with someone, it's O.K.
I invested in this project when I thought it was only a conference center because I thought it would be a great opportunity to help revitalize that area of Portsmouth...and I don't even live in Portsmout
Sen Lucas
It's strange that there is still a double standard. If Sen Lucas had an (R) by her name, she would have been asked to resign. If a republican gets caught with their hand in the cokie jar, they would be deemed a criminal. If a democrat does the same, it is an oversite.
How did Bush, McCain, and Obama get into this discussion? This is Portsmouth, not The District of Criminals. Whoops!
Where are you?
I can't believe we haven't heard from Gertz Point. Are you speechless?
Lucas to refund investors
Totally disappointed and devastated by this news. This is not about John McCain, Sarah Palin, Barack Obama or Joe Biden. This is about a person betraying the trust of so many that put faith and trust in someone they assumed well respected.
Am I surprised?
Not even for one second! I am glad that someone dropped a dime on this racist and her whole deal. "She neither denied or admitted" is exactly what she had planned the whole time. She knew she was wrong and didn't have the guts to admit her mistake. If this had been about a "White" hotel she would be screaming discrimination to high heaven, and getting the gallows ready. Personnally I hope they cook her butt. Hey Mayor Holley --- what have you got to say now? What -- no taking up for your good friend? Who ever called the authorities on her --- you have my admiration and thanks!!!!
Pilot Buries This Story
The Pilot has already started to bury this story. In less than 10 hours it is off the first page of the web site. Reason: 100% negative response from bloggers. Typical agenda for this newspaper.
Only 1 Vote
To bad most ballots in Portsmouth only have 1 person to vote for:
Fillinname (D)
Will probably have to write in a vote for myself again. Guess being a middle age white man with a (R) next to my name in Portsmouth probably wouldn't get me elected.
Broke The Law
Seems that Lucas just does what she wants. Told she was breaking the law. Does not respond. Attorney knows she is breaking the law and he has a justification of why it is ok to continue to break the law. Four things should happen: Lucas should resign from the State Senate, drop the project and return all money, make a public apology, and she should be charged criminally. How many of these things do you think will happen? Zero! Why do you think that will be?
Move along, nothing new here...
This thread has devolved into (big surprise) unfounded partisan attacks. Much to the chagrin of many, you can't blame Bush or the republicans for this one. I'm sad for you. But nice job working Bush/McCain/Palin?Obama into the thread. I'll have to pop over to see if Palin is being criticized for trying to close the monk house.
Now, THIS is entertainment!
joe_cool, I feel your pain. I successfully shed the title of "Portsmouth Resident" a year ago. And as a FORMER resident, I can watch the antics of this City Council with great amusement! If they keep up the corruption unchecked, maybe they'll become as ludicrous as the Councils of Detroit and Richmond. Hopefully someone will get a viedo feed on youtube.... it just isn't as funny without video goodness.
Here I am!
a Democrat, Obama supporter and one who NEVER supported this project. It smacks of conflict of interest and opportunism and yes, she should have known better as a state official. Glad you guys missed me!
hey mayor holly
Want to repeat your famous last words? Anyone care to bet people will not get there funds back.
Another sad example
This is another sad example of one of our representatives trying to dodge around the law for greed's sake. When are we going to start demanding our representatives to act responsibly and ethically and when they don't, they admit to their wrong doing and resign, immediately?
Spin or self deception?
"She is a law abiding citizen"
If you read the article you will see that is untrue. It may comfort you to know I did not write it.
Portsmouth Councilwoman Elizabeth Psimas
When did she become spokeswomen for P'town?
Oh how dumb
As for Joe Cool's last comment, please do not use George Bush and Barack Obama's name in the same sentence (unfortunately you made me have to do it). George Bush, though Ivy League educated was a below average student. He succeed only based on his family's reputation and their money. It is the only way that he would have gotten an Ivy League education. Deal with the fact that Republicans elected a President who ran our economy in the hole, lead us into a war with innocent people, and ruin our name throughout the world. We are worst off than ever before. McCain has been in the Senate longer and was a prisoner of war. I respect him for that...I am a true American, but it makes him no more experienced than Obama. We need a new direction and real change. Not a man who can't send email messages...72 years old and therefore unable to even participate in this dialogue. I met McCain before about 5 years ago...we had the opportunity to shake hands...just us two standing there...out dated then...out dated now!