Thread: Montana Jail/American Private Police Force, sad ending

Con man in Mont. jail deal says he's broke

By MATTHEW BROWN, The Associated Press
5:46 p.m. October 30, 2009

BILLINGS, Mont. — The California con man who failed in his bid to take over an empty Montana jail testified Friday that he is out of money, does not have the corporate backing he once claimed and even struggles to pay rent on his apartment.

Michael Hilton appeared in Los Angeles Superior Court for a hearing in a 2000 civil judgment against him now estimated at $700,000.

Previously, he insisted in multiple interviews that his bid to take over a 464-bed jail in rural Hardin had backing from deep-pocketed security industry investors who wanted to remain anonymous.

But Hilton testified Friday that he raised just $100,000 from four investors – and that money has since run dry.

With no other job, Hilton said he has dismissed his few employees and is now four months behind on his rent.

"I'm out of the game. I'm done," he said in a telephone interview with The Associated Press following his court appearance.

"All the expenses – the payroll, the rent, traveling – I paid all these," he added, explaining why he has no money to pay off the 2000 California judgment.

Rick Earnhart, the plaintiff in the civil suit that was the subject of Friday's hearing, said he lost $175,000 in two schemes perpetrated by Hilton in the 1990s.

"He's just playing poor me, poor me," Earnhart said Friday. "Don't buy into it. He's a total con man."

Hilton, a 55-year-old native of Montenegro, spent several years in prison in California on grand theft charges and has at least three civil judgments against him for fraudulent investment schemes.

Hardin economic development officials signed a contract with Hilton in early September calling for his company, American Police Force, to operate the city's never-used jail and fill it with inmates.

But the deal was never ratified by a bank overseeing the jail, and it collapsed after media revelations about Hilton's criminal background.

Board members for Hardin's economic development agency, the Two Rivers Authority, have said they never investigated Hilton's background and didn't know of his criminal history until after they signed a deal with him.

But Hilton said Friday that he confessed his past as early as July to the authority's executive director, Greg Smith, and was told it would not be a problem.

Smith, who has since resigned, could not be reached immediately for comment.

Before the end of the jail deal came, as the expenses mounted and Hilton's operating cash dwindled, he said he borrowed money at one point from his girlfriend, Becky Nguyen.

His own bank account is now empty, he said, while that of American Police Force is overdrawn by $2,000.

Hilton also acknowledged never having the corporate backing he claimed. Instead, he said he had only four investors – including Nguyen – who put money toward the jail project and a proposed law enforcement and military training center.

http://www3.signonsandiego.com/stories/ ... dex=192039

Board members for Hardin's economic development agency, the Two Rivers Authority, have said they never investigated Hilton's background and didn't know of his criminal history until after they signed a deal with him.

That little defense won't work with the IRS, so why should this board feel they are not responsible for their stupidity?