LCS: Trial centered on The Cliffs continues
This article is a continuation of The Graham Leader’s and Lake Country Sun’s ongoing coverage of the trial at Palo Pinto Courthouse. For part one, see the April 27 edition of The Graham Leader.
Rick De La Fuente, who serves as CFO of Double Diamond, was called to the stand by the plaintiffs during the afternoon of day three of the trial.
The plaintiffs went over the way money flowed throughout the Double Diamond entities to try and show how the POA’s money could not be tracked to the entities in charge of the services. The defendants later discussed how money could not be tracked to show it did not go to the correct entities.
De La Fuente also discussed two loans of $100,000 and $150,000 which were sent to Eagle Rock Community, another Double Diamond owned development, from the Cliffs POA account in 2016. The CFO said it was before his time as CFO and did not know if the money was transferred for a legitimate reason. He also said the $100,000 was sent back immediately in 2016 and he sent back the $150,000 in late 2018.
De La Fuente said the company switched accounting systems in 1999 and they cannot tell the running totals before the switch. This includes the amount of cash advances given to the POA by Double Diamond. However, Judge Mike Moore said he will believe those totals are the correct amounts unless proven otherwise.
The plaintiffs then went over the difference in the amounts charged between Double Diamond and new third party vendors for the POA’s service agreement with De La Fuente. The plaintiffs showed Double Diamond charged $910,000 per year for maintenance and watering of the course, $950,000 a year for general expenses and $32,000 a year for management fees. While new third party vendors are charging $840,000 for golf course, $467,000 for general maintenance and $36,000 for management fees.
This amounted to a total difference of $567,000 per year, De La Fuente said there were likely some things Double Diamond provided which is not currently being provided, but said he had not inspected the contracts enough to list differences.
For the rest of the story see the Wednesday, May 1 edition of The Graham Leader.