It’s been nearly a year since three unknown men broke into Chris
Cot
&
amp;#233’s home while he slept, duct-taped his hands and ankles,
and then pulverized his body to the brink of death with hammers and
two-by-fours. Police have identified a key suspect
– but no motive – thanks to posters Cot
&
amp;#233 hung up around town, but the district attorney has
declined to press charges until more evidence surfaces, said
Gilroy’s lead detective.
It’s been nearly a year since three unknown men broke into Chris Cote’s home while he slept, duct-taped his hands and ankles, and then pulverized his body to the brink of death with hammers and two-by-fours. Police have identified a key suspect – but no motive – thanks to posters Cote hung up around town, but the district attorney has declined to press charges until more evidence surfaces, said Gilroy’s lead detective.
Meanwhile, Cote has been traveling back and forth from South Africa, awaiting medical treatment and justice while people at home await repayment. Chief among those owed is United American Bank, which loaned Cote $3.9 million two years ago to develop solar homes at the corner of Hanna Street and Gurries Drive. The bank foreclosed the property in November, about the same time Cote sued his former real estate agent after dozens of workers filed liens on the project. The lender has since finished off 10 of the 18 expected units and plans to rent those homes – losing hundreds of thousands of dollars in the process – within the next few weeks, according to bank representatives.
As for the dozens of local sub-contractors who built the homes and claim they are owed more than $1 million, they are awaiting restitution from the Hollister-based general contractor, Al Valles, who sued Cote in February 2008, claiming he laundered his construction loan through a maze of “sham corporations.” Cote and his lawyer, though, dismiss this and claim his attackers destroyed the physical records of those companies during Cote’s violent nightmare.
The attack and investigation
The 20-minute attack, just after 2 a.m. June 10, left Cote with shattered legs, blood clots and a cracked skull with bone fragments stuck in his brain. He claims recent trips to Africa to teach locals about American values and to protect the endangered cheetah are also meant to keep him safe from his attackers, whom he fears will strike again.
Before he left the country last month, the controversial developer and his family posted wanted posters all over town with the image of a young white male captured on a security camera at a store where he supposedly bought the duct tape the night before the attack.
Since then, Gilroy Police Detective Stan Devlin said a couple of residents called police and tipped them off to a man whom he declined to identify. Police conducted interviews and forwarded a case to the district attorney, but Assistant District Attorney David Howe said his office has not filed charges and that the investigation is still ongoing.
“We’re still waiting on more evidence,” Devlin said in reference to backed-up crime lab results from San Jose. The chief suspect lives in town, Devlin said, and Cote added that the community would be “shocked” to know who it is, but he also declined to name the man in question.
As far as a motive, Devlin said police were still piecing that together while treating the suspect as “a stranger to Mr. Cote.”
“We can’t tie him to the construction business,” Devlin said. “Why he’s involved in this? Who knows.”
Still, Devlin described the suspect as the department’s “strongest lead” and encouraged residents to keep police posted.
Cote remains somewhat pessimistic.
“I do not think the murderers will ever be caught,” he wrote in an e-mail from Africa. “They are in Gilroy – people tell me they see them going to church now for the first time. The police and I both have strong suspicions about who and why, but I cant go into details.”
Click on thumbnail for a full timeline
Following the money
Cote’s paper trail is long and complicated.
Beginning in 2001, he founded Hollings Cartaway Hunger-Relief Organization, one of his three companies that Experian credit group has rated as medium- to high-risk entities tied to the Hanna Square construction project. Cote, along with Hollings, bought the Hanna Square properties in August 2006 for nearly $1.9 million, according to county tax records. A month later, he transferred half of those properties to another holding company, Gilroy Aviation Sciences, Technology & Alternative Energy Investment Fund, and he transferred all parcels to Aviation 11 months later when they were valued at $2.4 million. In November 2007, he founded Gilroy Independence Hanna Square Homeowners Association and transferred all the parcels to that company the same month.
All this led Al Valles’ lawyer, Daniel DeVries, to argue in a recent letter to the civil court that Cote and his companies “committed fraud by setting up sham corporations through which to receive and mis-allocate the construction loan proceeds.” Valles is trying to recoup more than $1 million in unpaid construction costs incurred by sub-contractors that Cote claims were unauthorized because he said he signed a contract with Valles alone.
“The properties were purchased by my companies (and) then consolidated under (Aviation) since it obtained all the building permits from the city in its name only,” Cote wrote.
Yet, Cote attempted multiple times between July and September 2007 to re-record the deeds of trust on his Hanna Square properties by substituting one of his companies as the trustee instead of the original Alliance Title – essentially attempting to guarantee that one of his companies would always be the trustor, trustee and beneficiary.
While clever, that doesn’t mean much of anything, according to Stephen Pahl of Pahl & McCay, a lawyer representing United American Bank.
“It may be these (deeds of trust) were placed for purposes of keeping people from placing liens against the properties,” Pahl wrote in an e-mail.
In fact, Cote wrote in an e-mail, “All liens that once existed were illegal and a breach of contract.”
One of those liens came from Turlock-based South County Tile and Stone in February 2008 after the company did the project’s kitchens, bathrooms and floors for $150,000, according to court documents. South County has sued Al Valles and Cote, but Valles is attempting to shift the blame to Cote and his companies, all of whom Valles sued in February 2008 on behalf of the unpaid sub-contractors he hired and still owes money to, according to court documents.
The Valles and South County lawsuits are two separate civil cases against Cote alleging that he owes more than $1 million to contractors, but Cote has said he has satisfied all his debts and that Valles breached dozens of clauses in the contract, causing his companies – which he described as “one in the same” – to incur more than $700,000 in losses. That’s a fraction of the $3.8 million the bank’s missing, Pahl said.
“(Cote) failed to complete the units and also apparently stiffed his contractors,” Pahl said. “Cote’s defense is that Al (Valles) didn’t do his workmanship, but the bank certainly has no fight with his work. We’re both victims of Mr. Cote, and while I’m sympathetic to the fact that he got the crap beaten out of him, that doesn’t excuse the fact that he basically walked away from the project.”
Cote’s lawyer, Charles J. Naegele, argued Cote’s assailants stole and destroyed company records, adding that the bank should have papers to supplement Cote’s memory gaps.
“He was beaten within an inch of life, left for dead, and all of the records you are seeking were either stolen or damaged beyond recognition,” Naegele wrote to the court.
In an e-mail, Cote explained that the messy wrangling at his home stained relevant papers red and that a clean-up crew hired by his homeowner’s insurance company while he lay unconscious in the hospital “(gathered) up all the blood-soaked items in my home and (destroyed) them sanitarily.” He has turned in all remaining documents, he wrote.
The judge in the case ordered Cote to look harder and fined him thousands of dollars to do so by June.
Cote “is in the best position to obtain the information and documents from the banks, persons and others organizations who presumably held the info,” wrote Superior Court Judge Socrates Manoukian on Jan. 16.
Cote – whose spotty history here includes a 1989 incident when his former bus company cheated the school district out of several thousand dollars – sued his former real estate agent and Gilroy Unified School District trustee Denise Apuzzo for $3,000 in November. In January, the judge ordered Apuzzo to pay him about $1,400 for money he lent her to cover a real estate class and an airline ticket, but the judge declined to tack on Cote’s additional claims for obscure PG&E bills and doctor’s visits.
Apuzzo said it all came out of left field at first but started to make more sense once she realized her initial open house in an unfinished home occurred the day after Al Valles filed a mechanic’s lien against Cote, who claimed he had already sold some of the units to police officers even though the city had yet to approve the work. Four months later, on June 10, Cote was attacked.
“The way I found out he was not paying his bills was when he got beat up,” Apuzzo said, echoing statements of sub-contractors who rushed to file liens after the incident. “He just kept adding stuff on (in the lawsuit). It was so absurd – not the kind of thing you could print and make any sense of.”
Timeline
8-16-06 – Gilroy Aviation Sciences, Technology, & ALternative Energy Investment Fund founded
8-22-06 – Hollings Cartaway Hunger-Relief Organization, one of Cote’s companies, buys four of eight lots at Hanna Square site then valued at $676,000
Cote himself buys four other lots at Hanna Square then valued at $1.2 million
August 2006 – Median price for single family residence in Gilroy is $687,000
9-26-06 – Cote transfers properties to ‘Aviation’
6-07 – Two Bear Sterns hedge funds collapse
7-9-07 – ‘Hollings’ transfers properties to ‘Aviation,’ which holds all properties, now worth $2.4 million
7-31-07 – Cote attempts to substitute one of his own companies as trustee on deed, replacing Alliance Title, the original trustee
Median price for single family residence falls slightly to $675,000
10-07 – Dow Jones Industrial peaks above 14,000 points
11-21-07 – Gilroy Independence Hanna Square Homeowners Association founded
12-07 – Cote allegedly stops paying General Contractor, Al Valles
1-16-08 – Cote transfers deeds from ‘Aviation’ to ‘Hanna Square HOA’
2-08 – Dozens of sub-contractors begin filing liens against Cote and his various companies, last lien filed in March, 2009
2-23-08 – First open house
2-29-08 – Al V sues Cote, companies and United American Bank
3-08 Median home price falls to $538,000
5-23-08 – South County Tile, a sub-contractor, sues Al V, who is attempting to pass grievances onto Cote and companies
6-10-08 – Cote nearly beaten to death during home invasion
6-30-08 – Cote slips into tax default on his own property at 1515 Welburn Avenue
9-30-08 – Trustee, PLM Lender, sends Cote default notice on Hanna Square properties
11-6-08 – ‘Aviation’ transfers Hanna Sq. deeds to United American Bank, which begins to finish project
11-20-08 – Cote sues former real estate agent, Denize Appuzo, for petty cash
2-12-09 – State tax agency send ‘Hollings’ overdue notice for nearly $3,000
2-13-09 – Cote travels to South Africa, returns intermittently for medical and business reasons
4-3-09 – City expected to approve finished work
4-7-09 – Cote’s next court date as defendant against Al V
