Fraud charges filed against 2 Duchesne developers

Two Duchesne County real estate developers already awaiting trial on state tax-evasion charges have now been accused of defrauding customers.

Frank Joseph Steed Sr., 63, and Joan A. Steed, 60, were each charged this week in 8th District Court with five counts of engaging in a pattern of unlawful activity and five counts of communications fraud, all second-degree felonies.

The case arises out of a probe by the Utah Division of Consumer Protection into the Steeds' sales practices. The division's chief investigator, Kent Nelson, said in a seven-page administrative citation that the couple sold as many as 140 lots in unapproved phases of their Duchesne Mini Ranches development.

Under state law, developers can sign "reservation agreements" with customers and take money for lots that have not been officially platted, based on guidelines published by the Utah Division of Real Estate.

"The Steeds failed to follow those guidelines and made no reference to buyers about their payments being reservations," Nelson wrote.

The citation lists five specific instances where the Steeds allegedly accepted payment for property and promised that "deeding and construction would begin within a few months of the date of sale." Neither promise was kept, according to Nelson.

"The Steeds were fully aware that no subdivision could be submitted and approved and no deeding and construction could begin until they and their entities provided funding" for needed water-system improvements, he wrote.

When the customers requested a deed for their land or sought to sell it, Nelson said, they learned no deed had been filed with the Duchesne County Recorder's Office. At least two customers sought refunds but hadn't received them when the citation was issued, the investigator said.

A hearing on the citation has been rescheduled several times at the request of the Steeds, according to Utah Department of Commerce executive director Francine A. Giani. The couple faces a possible fine of $355,000, but that could be reduced if they make restitution to their alleged victims, Giani said.

An assistant for Mary Anne Q. Wood, an attorney for the Steeds, said Wood had not seen the charges and therefore would not comment on them.

The Steeds already stand accused of failing to pay more than $3.1 million in state taxes over a three-year period.

In October 2008, the Utah Attorney General's Office charged the couple in 3rd District Court with one count each of engaging in a pattern of unlawful activity, four counts each of tax evasion and four counts each of failing to file a timely or proper tax return.