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Site developer has criminal background; says all in past, can still redevelop Atlas Cement Plant property

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by Vera Miller
Staff Writer
February 14, 2007

The man leading the redevelopment of the former Universal Atlas Cement Plant site in Penn Hills is a Utah man who served time in prison for fraud and tax evasion.

James VanTreese, who also has been called James Erekson by municipal officials, said the prison time he served is all in the past.

"I don't know what the big problem is (with my criminal record)," said VanTreese, general manager and third-in-rank for Erekson Encounters. "I am perfectly capable of cleaning up the property."

VanTreese, 60, of Salt Lake City, Utah, said he paid a heavy price for his convictions and that it is all over.

VanTreese pleaded no contest to four counts of communication fraud, two counts of securities fraud and one count of tax evasion, according to Wayne Klein, director of Utah Division of Securities.

He was charged with several counts that included second-degree felony communications fraud, securities fraud and racketeering in 1997 as Northwest Publishing Inc. president, according to the Utah Attorney General's Office.

A Utah judge sentenced VanTreese to up to 30 years in state prison, but he served about two years from 2001 to 2003, Klein said.

VanTreese was released on supervised parole, which ended in April 2005, Klein said.

The other defendants in the case were his son, Jason, secretary of the publishing company; James Perkins, vice president of operations; and Thomas Wood, a director and president.

Jason was sentenced to three years of probation. A judge dismissed the charges against Perkins and Wood in 2000, according to Utah criminal records.

VanTreese and Wood credit the Utah Attorney General Office's takeover of Northwest's property for causing the company to fail.

In unrelated cases, Van-Treese has convictions in Texas for mail fraud and theft, charges that VanTreese confirmed.

Northwest Publishing did not fulfill some contracts with authors, who paid about a quarter of publishing costs, by failing to publish some books and pay royalties, according to the lawsuit company trustee Duane Gillman filed against the VanTreeses in bankruptcy court in 1996.

According to court documents:

  • In 1995, Northwest received between 75 and 100 complaints per week from authors who said books were not being published or, if published, were not being delivered on time. Royalty checks were not sent to authors, or alternatively, royalty checks sent were returned based on insufficient funds.

  • Northwest paid many of its obligations, including maj-or vendors and the company payroll service, in cash. Northwest did not borrow from commercial lenders to operate its business. In many instances, vendors would not extend credit to Northwest due to previously bounced checks.

  • The cash receipt book that existed was never compiled into a ledger or used for any other accounting purpose.

  • Many paychecks to employees regularly bounced. Employees informed VanTreese, who had them hold and then resubmit the checks when they would clear or exchanged the checks for cash.

  • Northwest, which opened around 1991, never filed federal or state tax returns.

  • Northwest was not selling enough books to be profitable. As a result, incoming author money was used to keep the company functioning rather than as funding to meet Northwest's contractual obligations to authors.

  • VanTreese and his son gambled the company's money about once a week in Wendover, Nev., or other locations.

    VanTreese filed for bankruptcy in 1995, but U.S. Bankruptcy Judge Judith Boulden ruled in 1998 that the VanTreeses were liable for losses of $10.5 million due to their gross negligence in running the publishing company.

    But a judge did not require Northwest to pay back its victims, said Wood, who is now legal counsel for Erekson Encounters and a friend of VanTreese.

    A majority of the contracts were fulfilled, according to VanTreese.

    "I didn't defraud anyone," he said. "I didn't do anything wrong with the publishing company."

    VanTreese was editor of 239 books from March 1992 to May 1996, according to Barnes & Noble's Web site.

    VanTreese said he still wants to move ahead as Erekson Encounters' Penn Hills project leader so other developers will buy the cleared land for a residential neighborhood and industrial park.

    So far, taking over the property from Miller, Mead & Gross (MM&G) and clearing it has cost Erekson Encounters about $1.7 million, he said.

    Since his involvement with the project, VanTreese said, he has paid about $500,000 in delinquent and current property taxes for the land along Thompson Run Road.

    Records posted to the Allegheny County prothonotary Web site show about $97,000 in delinquent school district, municipal and county taxes were paid off, clearing all the liens against the former cement plant's property.

    Wood helped with managing the tax payments. He said the paid tax bills totaled about $500,000.

    VanTreese and Wood credit the Utah Attorney General Office's takeover of Northwest's property for causing the company to fail.

    MM&G had not done any demolition work when it owned the former Atlas plant land from 1993 to last year.

    MM&G filed for bankruptcy in June 2005, but U.S. Bankruptcy Judge Thomas Agresti dismissed the case in August.

    The school district and municipality asked Agresti to require MM&G to find a buyer by June 30, 2006. When MM&G did not, he dismissed the bankruptcy case.

    That cleared the way for a sheriff's sale of the 206-acre property, which is zoned for single-family homes and heavy industrial use.

    VanTreese, as Erekson Encounters general manager, bought out MM&G stocks to stop the sheriff's sale.

    Erekson Encounters remodels kitchens and bathrooms in Utah. The company owner is VanTreese's ex-brother-in law, Reid Erekson.

    At a press conference at the municipal building on Jan. 22, VanTreese said he would be willing to accept assistance from government agencies but would not depend on them to develop the property.

    On Monday, VanTreese said he has not asked for money from any governmental agency and does not have plans to do so.

    Christopher Blackwell, municipal principal planner, said he is not aware of VanTreese asking for money from the municipality.

    But VanTreese has asked the municipality to swap municipal land that has a pump station with another parcel to build a road for the future development.

    "His criminal background is a reason for the municipality to not invest its money into the project," Blackwell said. "If a developer comes in, we don't do a background check. No one can give him money in the timeframe he is working in."

    Howard Davidson, municipal planning and economic development director, would not comment on VanTreese's criminal background.

    Mayor Anthony DeLuca Jr. said he was surprised to learn about VanTreese's background and would make sure the municipality does not give him any money for the project due to the situation.

    He said VanTreese has not approached him for funding.

    Councilwoman Sara Kuhn said she doesn't have a reason to know VanTreese's criminal background.

    But Kuhn said she would not respond to a question about whether she would consider giving VanTreese money for the project because it is a hypothetical.

    Councilwoman Yvonne Lamanna said she is concerned that he could approach the municipality for financial help.

    She said she would be reluctant to authorize any negotiations with him until further investigation.

    VanTreese said he plans to continue working on the property, which he estimates will be cleaned up in a year.

    OSHA probe of worker's death continues

    Early in the demolition process at the former Atlas Cement Plant site on Jan. 3, Jordanian immigrant Yousef Maayah, 64, of Dearborn, Mich., fell 40 feet to his death while he was demolishing a building.

    The federal Occupational Safety & Health Administration (OSHA) is still investigating the death of the subcontractor for Erekson Encounters, said Leni Fortson, OSHA spokeswoman.

    By law, OSHA has six months to complete its investigation. When the investigation is finished, OSHA will make its findings public, she said.

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