Court orders former Idaho real estate developer to repay millions
An Idaho court has ruled against a Treasure Valley resident for his role in a Ponzi scheme that bilked millions from real estate investors.
The 4th District Court in Ada County awarded the state a judgment in excess of $9.5 million in its case against Meridian's Nathan Ward Pyles and his Nampa-based real estate development business, Shiloh Management Services, according to a news release from the Idaho Department of Finance. The judgment money will go toward restitution for investors.
As part of the settlement, Pyles admitted to violating the Idaho Uniform Securities Act and agreed to be banned permanently from selling securities in Idaho.
Pyles also admitted the state's allegations as part of the settlement. Before the deal was reached, his case was slated for a three-week jury trial starting in November.
The civil lawsuit, which was filed in 2018, accused Pyles of stealing at least $4.9 million from investors under the guise of flipping homes and selling them for profit.
State finance officials say Shiloh Management Services raised $28,769,325 from 55 investors, 37 of those being Idaho residents. Pyles defrauded investors not only by overpaying himself and using company money for personal expenses, but also by using new investor money to pay old investors, the basic characteristic of a Ponzi scheme.
Pyles filed multiple investor liens on properties, the state said, falsely leading investors to believe they would have a claim on a piece of property. Investigators also believe he took money from people in other ways, including selling investor liens that would exceed the value of a property.
"Pyles essentially treated Shiloh's and investors' money as personal assets by using the money for personal needs, for business needs as he saw them and to repay previous investors," Deputy Attorney General Alan Conilogue wrote in the 21-page complaint filed in 2018.
For a time, Shiloh was a profitable business. But Pyles' personal expenses drove the company into involuntary bankruptcy after a push from investors.
State finance officials also charged Boise resident Roger Button with helping Pyles in the scheme, though Button himself was an investor. Finance officials alleged that Button would receive a 2% commission on investors he brought to Pyles.
Court records show charges against Button in the civil case were dismissed with prejudice in March, meaning the case against him cannot be reopened.
Prior to the civil suit, Pyles was arrested and charged for allegedly writing fraudulent checks, but those charges were dropped.