Longtime investor defends role in case.
FLORENCE - Light from an overcast day filters into the formal living room of Douglas Huntingdon's 7,567-square-foot home overlooking Woahink Lake and, farther out, the Pacific Ocean.
Huntingdon, 87, holds a cane and a cigarette. He sits in an upholstered chair, smoking and thinking back 30 years, to when he first came into contact with Louis James "Jim" Borstelmann and his company, Sunburst Associates of Thousand Oaks, Calif.
"My business associate down there, and partner, was approached by a so-called financial adviser who wanted to set up retirement accounts for the two of us," Huntingdon says. "One of the things he wanted us to invest in was a trust deed, with Borstelmann - $10,000. I liked the results so well, I just kept investing."
Huntingdon was a businessman and a mechanical engineer living in Southern California at the time. Shortly afterward, he moved to Montana and bought "raw real estate," which he says paid handsome profits as he sold it off over the years.
Huntingdon moved to Florence in 1988, and for the past several years has lived at his estate on Clear Lake Road. The home and a total of just under 10 acres of hillside property is held by irrevocable trusts in his name and that of his son, Don.
All the while, Douglas Huntingdon has continued investing and reinvesting in Sunburst trust deeds. For at least the past 12 years, he has received 2 percent commissions for recruiting others - primarily from the Florence retirement community - to do the same.
Huntingdon says he held $2.3 million worth of the loan documents himself when Borstelmann shut his company down in January.
"Jim taught me everything I know about trust deeds," Huntingdon says. "I know, probably, almost as much as he does."
The trust deeds sold by Sunburst were unquestionably legitimate throughout most of the three decades the two men did business together, Huntingdon says. Several trust deeds in which Huntingdon owned shares reached maturity and were paid off by their listed borrowers, he says. On three occasions over the years, Borstelmann had to foreclose on properties that were used to secure specific trust deeds, to force repayment of the loans, Huntingdon says.
Then late last year, Huntingdon says, Borstelmann told him he'd recently foreclosed on 15 properties. In his next breath, he mentioned 25 foreclosures, Huntingdon says.
"He said he was having trouble with the (borrowers) making their payments, so he was using his own money," Huntingdon says. "My ears perked up about that."
There was another red flag that also got his attention, he says.
"Very seldom was there a new investor (listed as a shareholder on the trust deeds)," Huntingdon says. "There was just too much business with old investors. It got me thinking, `How in the hell am I going to double-check this?'"
Borstelmann has been unavailable for comment. His business and home phones have been disconnected, and he has not responded to a letter from The Register-Guard.
Sunburst's failure sparks Douglas Huntingdon's memories of a second company that he says was once owned by Borstelmann - Conejo Investments. An Internet search indicates the company is no longer active, but did exist as recently as 2007 in Fresno County, Calif. - where Borstelmann has lived in the past.
"It did nothing but high-risk investments," Huntingdon says. "(Borstelmann) would buy something for 10 cents a share, and would either sell it for zero cents on the dollar, or a dollar (per share).
"It was a big joy in his life - but he would never have other investors involved, because it was too risky."
Huntingdon says Borstelmann typically did not like to invest in the stock market.
"He also told me one time that he may have in the neighborhood of $30 million in (Sunburst) investments," Huntingdon says.
"And we account for $23 million of that," his son says, referring to the trust deed purchases involving Florence residents and the Huntingdons' friends and family.
Douglas Huntingdon isn't quite ready to write off the losses. He's not convinced there won't be another turn of events.
"When this happened, I just couldn't believe it," he says. "Jim and I have been friends for too many years.
"I still think at some point, Jim is going to see the light. And we'll have (the missing money) by the end of the year."
Huntingdon is asked how he reacts when accused by those around him of complicity in whatever may have led to Sunburst's collapse and the disappearance of millions of dollars in invested money. He grows quiet and stares into space before answering.
"I may have been a bit naive, I don't know," he says. "I didn't think I was."
After another pause, he finishes his thought. "But they'll blame anybody but themselves," he says.
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|Title Annotation:||City/Region; A Florence man who promoted Sunburst investments says it all seemed legitimate|
|Publication:||The Register-Guard (Eugene, OR)|
|Date:||Jun 14, 2009|
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