Shh! Fortuna Doesn’t Want to Talk about Delores Reeves
Tomorrow, Delores Reeves and her husband, Glenn stand in a Humboldt County courtroom. They are there to begin the process of answering allegations that they perpetrated one of the biggest frauds in recent Humboldt history. And, there has been almost no coverage of this story.
One of their alleged victims is slender and fit, her cap of silky silver hair cups golden skin only lightly touched by wrinkles. She smiles shakily as she sits upright behind the long wooden table in the offices of the Janssen law firm near the Eureka Courthouse. The shakiness is emotional though, not physical. She seems closer to middle-aged then elderly–the kind of woman who could grace an ad for vitamins, the kind of woman that makes growing older look easy. But on this day, her eyes are pink and swollen. When asked her name, she averts her head and half whispers that she’d rather not have it shared. She doesn’t want her name used. She lives in a small community where many people already know and her name is a matter of public record because she has filed a complaint with law enforcement. But, please don’t use it anyway, she asks.
She’s alleged to be a victim of what her lawyer Timothy Needham calls “an elaborate Ponzi scheme” by Delores Reeves and her husband, Glenn. And, in some ways, she’s a victim of a town that bills itself as the Friendly City of Fortuna. Like the town of Hadleyburg in Mark Twain’s story (The Man that Corrupted Hadleyburg), Fortuna has a reputation as a town of very little crime, of solid citizens industriously working at the American Dream. And for the vast majority of its residents this is still true. But its silence is part of the problem. This woman was drained of around $400,000 and at least 7 other victims were similarly defrauded for a total of about $2 million. And there might be even more victims and more money stolen. But almost no one wants to talk about it publicly.
Fortuna and its neighbor, Ferndale, seem like modern-day Mayberrys–wholesome and safe. But recently both have been the scenes of crime which have shaken the towns to their cores. Ferndale’s scandal involving the Humboldt Creamery reverberated across the nation landing splash dab on the pages of the New York Times. Yet, Fortuna’s scandal where a prominent local couple, Delores and Glenn Reeves were arrested on charges of theft and embezzlement, has barely even touched the pages of its own newspaper let alone the larger Times Standard or national papers. Yet, as several people have privately insisted, the amount of money lost is larger and the victims hurt more deeply than the Creamery crime. Why isn’t it being talked about?
The seventy-two year old victim who doesn’t want her name known says that she knows of one couple that had to sell their home to pay off their debt as the result of Delores Reeves and her husband, Glenn. They now live in a small apartment. Another victim, a teacher, lost half of her retirement savings. She herself lost over $400,000. Her lawyer estimates that over two and half million dollars were taken. How did this happen? And why aren’t the front pages full of stories about the victims and the accused?
The one victim’s story begins when she came to this area and fell in love with the community. At first she said, “I invested in Ferndale. I was completely taken with the people. They would say hello to you on the street.” She bought property near Fortuna with “my own vegetable garden and fruit trees.” This was all part of living the end of her life well. “I hate the Bay Area. Up here you can do things without going nuts. No traffic. No smog. Up here you get hugged…. I’ve got a lot of things on my bucket list,” she said and for a moment she grinned as though life were a tall glass of lemonade and she was going to drain it to the last drop.
Then she sagged remembering recent events and how her lemonade has been siphoned away. “Delores Reeves was working at Humboldt Bank…I needed a loan and she handled my loan…then she decided to go out on her own. She was pretty well aware of my finances by the time she went out on her own.” The two became friends, sharing lunches and even family dinners. There were constant friendly emails. “I was included. I became close to her daughter,” she said sadly. Needham, the lawyer says that Delores Reeves was very ingratiating with her victims who often were in their seventies, eighties and nineties. “[She] would tell me about loans,” explained the victim. Then she would arrange for the victim to lend money to supposedly credible people with secure properties. “There were 12-14 that went the way they should,” the woman explained. “[But] she would know when I got a payoff or sold a piece of property.” Then as one loan was paid off, she would suggest a new loan. In this way, Reeves was able to use the money from one loan to keep afloat payments that needed to be made on others.
According to this victim and her lawyer, one of the ways Reeves defrauded people was that she arranged phony loans to real people who didn’t even know they were supposedly “borrowing” money. Their identifies were stolen. She also leveraged properties far beyond what they were worth. One simple trailer was leveraged for close to $300,000. She also is alleged by the victim’s lawyer of having defrauded borrowers-once telling a veteran that he didn’t qualify for a V.A. loan so that she could reap the increased fees for a more conventional and bigger loan.
However, as the financial downturn swept the real estate market, Reeves found it increasingly difficult to keep the loans she’d arranged afloat. Eventually, a couple of years ago, says the victim, the payments started coming in erratically though they would get paid off eventually. One day, she needed a social security number off one of the loans for tax purposes. She couldn’t find the loan document. She called Reeves lamenting being “ditzy.” How, she asked Reeves, “..could I lose a whole loan document?” But, she hadn’t. And Reeves knew it. At that point, the woman thinks Reeves realized that the fragile boat that she had been keeping afloat on her friends’ money was sinking. Reeves wrote the victim a letter confessing what had happened. “She told me she would find a way to pay me back. She would sell her jewelry…I was frozen. I couldn’t believe this was happening.” Even after writing the letters, the victim alleges that Reeves continued to make more loans to others.
Still the victim hesitated. This was her friend. She didn’t want to have her arrested but eventually family members talked her into going to the Fortuna Police Department. To her surprise, even though she had a confessional letter, the department wasn’t confident that much could be done. According to the victim, she was told that a woman of Delores Reeve’s age and standing in the community was not likely to do any jail term. Compounding her surprise was that though the confession happened on March 11th and the victim went to the police March 17th, there was no immediate response. In fact, Reeves apparently soon became aware of the victim’s attempt to engage the police because 5 days later Reeves called the victim and indicated that she expected to be arrested. However, she was not arrested until April 15th nearly a month later. During that time, Reeves, according to information that the victim’s lawyer, Timothy Needham turned up, hired a document scrubbing firm to destroy many files in her business. She also had ample time to destroy any evidence on her computers. The length of time seems surprising. Certainly, others accused of crimes would love a month to clean house.
Erin Dunn, the CEO of the Fortuna Chamber of Commerce, is saddened by what has happened in her beautiful little town. She confirmed that Reeves and her husband are long time residents. A search on the internet turns up that Delores Reeves graduated in 1973 from Fortuna. Her husband, Glenn Reeves also graduated from there. He had been president of the Fortuna Downtown Merchant Assoc. Locals also revealed that he also dressed as Santa at the Electric Light Parade for many years. But Dunn says that people in Fortuna are not talking about the story. “This is not a hot topic. It’s just tragic. People are somewhat sympathetic to [Delores Reeves].” She hurries on “People aren’t sympathetic for the deed but are compassionate for the reasons that lead up to it. She’s a person, a friend, and a colleague but [there is] a sense of ‘you can’t do that.'” Unlike Dunn, most people approached don’t want to even talk let alone be quoted. It’s as if by not talking about the crime, it will disappear. Glenn Reeves’ arrest can’t even be found noted in any of the newspapers or blogs online. People don’t want to offend neighbors, friends and business partners that might be sympathetic to the accused. So they say nothing to outsiders and watch what they say to each other. The shiny red apple of their town’s reputation has a worm in it. Like many of us, they’d rather pretend the worm isn’t there.
The story isn’t being discussed much, not in the town, not in the papers, not on the blogs–only in the homes of the victims and in hushed voices among those who worry they might offend someone by supporting the wrong person. Here, at last, a victim has spoken out hoping that by doing so the silence would be broken and more victims would come forward.
The Janssen law firm, to which Timothy Needham belongs, is well known for their role in forcing Skilled Healthcare to clean up their act. Needham is hoping that “this person who has committed so many despicable acts against so many seniors” is punished. But more than that, restoring some of the money lost to his clients would be nice. This looks difficult as the Reeves home is rumored to be sold in foreclosure (it is a short sale) and any money supposedly stolen is probably long gone. Perhaps other victims and people close to the alleged crime might be able to help piece together more of what happened, more of who benefited, more of whom has stolen the lemonade that was supposed to make a lovely older woman’s senior years comfortable.
You can call the Janssen law firm at (707) 445-2071 if you think you may have been a victim or may have information about others who may have been involved.
UPDATE 6/28:Victim’s suit names others besides the Reeves.
Photo from real estate listing.