Report Outlines Questionable Practices in Buckram Oak Deal
Updated: Wednesday, November 22, 2006 7:18 PM
Posted: Wednesday, November 22, 2006 1:54 PM
The Kentucky Real Estate Commission says that four of the principal defendants named in Jess Jackson's prominent fraud lawsuit violated state laws in providing unlicensed real estate services to the California vintner and horseman in connection with the $17.5 sale of the former Buckram Oak Farm near Lexington.
A report issued Oct. 24 on a seven-month investigation conducted by the commission also contains detailed input from sources directly or indirectly involved in the controversial sale of the farm, but draws no conclusions. The farm, which is now part of Jackson's Stonestreet Stables property collection, was sold by a holding company affiliated with the late horseman, Mahmoud Fustok.
The report concluded that four horsemen named in the Jackson lawsuit -- Emmanuel de Seroux, Bruce Headley, Brad Martin, and Frederic Sauque – broke state statutes that require brokered real estate transactions to be performed by agents licensed in Kentucky.
The commission carries no punitive authority, other than to issue a cease-and-desist order that basically tells the four they cannot practice real estate in Kentucky, said executive director Norman Brown. The group is also working with the state's attorney general's office to get a court injunction in place to prevent future unlicensed dealings.
Brown said he isn't certain how the alleged illegal activity was brought to the commission's attention.
"Sometimes we get anonymous tips," he said. "We don't have to have a person's name on file to start an investigation."
A Lexington attorney that is part of the legal team representing Jackson in the lawsuit said he preferred not to share an opinion about the report.
"I think the reader will have to read the investigatory report and judge for themselves if it validates (allegations made in the lawsuit)," said Richard Getty. "We think we have a strong and viable case. We expect to try our case in the courtroom, and not in the public domain."
The lawsuit--barring a settlement--is scheduled for a jury trial next June. In the complaint, Jackson, who is the founder of Kendall-Jackson Wine Estates, accuses the four named horsemen and others of fraudulent dealings in both the purchases of horses and farm property.
The Buckram Oak Farm deal itself carries claims of a $1.5 million overcharge, which allegedly was then split among the conspirators. Buckram Oaks Holdings N.V., which was affiliated with Fustok and is also named in the lawsuit, allegedly carried a list price of $16 million on the farm, which has been renamed by Jackson as Stonestreet Farm.
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