Conversation with a board member

Vicki Hunsinger 5-19-10

In business one of the most important tools are facts. That is why it is important to make sure that the information given to you can be verified. I have repeatedly asked Mr. Brown for the verifiable information for his Diamondhead Condo Hotel, Ltd. project. I have asked the Board to perform due diligence. To my knowledge, none of those things have been completed. Because I am a property holder in Diamondhead and a former resident, I want to make sure that my interests and the interests of my neighbors are considered and protected in business dealings.
You have seen my mention of “discovery” in due diligence. Discovery is looking into all the nooks and crannies of a business deal. To assure that it is in fact an ethical, legal business deal; to affirm, from all perspectives, that the outcome is, in fact, as proposed in the business plan. I have continued to take a look at the various aspects of this proposal. One important thing that is always done for discovery is to check the references of the proposer and to assure that he/she is of good character, has good working relationships with other clients, and has the appropriate financial backing.



Today I called Grand Valley Lake Community. It is a gated community with a golf course located in Saulsbury, Tennesee. Grand Valley Lake has approximately 1000 residents. It is where Mr. Brown resides. I was fortunate, the first person I spoke with immediately knew who I was inquiring about before I mentioned Mr. Brown’s name. My inquiry was only regarding any business dealings they might have had with Mr. Brown. I explained to this person that Diamondhead was considering signing a business agreement with Mr. Brown. This person replied, “I am sorry to hear that, it makes me sad”. Grand Valley Lake Community does not have the other amenities that we are fortunate to have here at Diamondhead. It has only a golf course. After a short conversation, I was asked to call a board member this evening. We were able to speak in a conference call with one of the Board members from Grand Valley Lake Community.



The Board member described Grand Valley Lake Community business dealings with Mr. Brown. The golf course was in severe financial trouble. The people in the community wanted to save the golf course and were approached by Mr. Brown with a scheme to save the golf course. Several people in that community, including Mr. Brown, formed an investment group with the intention of saving their golf course. Mr. Brown proposed that he would sell 2000 memberships to the golf course. These would sell for $1,000 for an individual, and $1,200 for a family. Based upon his proposal to sell 2000 memberships, (he stated these sales would be, “a piece of cake”), the golf course could be paid off in two years. Mr. Brown recruited members to an investment group with each member contributing $15,000. The exception was Mr. Brown; who contributed $2,500. Almost a half million dollars was collected. Once the money was collected Mr. Brown informed the group that he was unable to sell even one membership. He felt that the Grand Valley Lake Community needed to build pools, playgrounds, fun centers, a bowling alley, condos, etc. He also stated that he should be named CEO and that as CEO he expected to have total control of the investment money. This Board member felt it was important for us to know that Mr. Brown has “no people ready to spend money”. The Board member was sad to explain to us that a member of this investment group severely lost his reputation in their community. This member was completely taken in by Mr. Brown’s scheme and so damaged by his association with him, that he can no longer show his face at community events. In addition, the Board member told us that Mr. Brown negotiated an agreement with the owner/developer of the golf course for a lease to purchase for the investment group. This was at a 10% interest rate (well above the interest rates available).



Mr. Brown is a well-known member of this community, and lives in a “single wide trailer”. He is no longer a member of the investment group. Our contact emphasized that Mr. Brown has absolutely no financial backing. Mr. Brown did not sell a single membership, “Zero”. He is not considered an ethical businessman, nor of good character in the Grand Valley Lake Community. He stated that Mr. Brown was unworthy of trust. The Board member stated, “ we should have done our homework a lot sooner”. The Board member also told us that, “There was no paperwork from Mr. Brown; we should have known.” The Board member emphasized that Mr. Brown was focused, “on the investment monies”. There was also a short discussion as to how Mr. Brown used his “good Christian persona” to gain the support of potential investors. Mr. Brown does now have his own religious organization listed under Churches; God Calling Ministries.


Our contact on the Grand Valley Lake Board and Investment Group stated that he/she would be willing to speak with our POA President Ray Massey regarding the business dealings with Mr. Brown. Mr. Brown has told community members that he has several projects going on down in Arkansas at this time. As far as this board member knows the businesses -> Metro Group “do not exist”. This Board member ended our conversation by saying that he will never again use the term “A Piece of Cake”.


The term I have heard repeated often here in Diamondhead, “we are getting something for nothing”, is true in this instance. Diamondhead will be getting several hundred new affiliated members (something) using our facilities at an extremely discounted rate and there will be no monetary renumeration (nothing). Mr. Brown will be getting, at a minimum, several properties (lots within Diamondhead) from delinquent property owners with developer status (no annual dues, no sewer charges). He will be in control of any down payments from potential condo purchasers; and the monies from the sales of memberships to Diamondhead (if any are actually sold). Mr. Brown will be able to use these properties and any monies as leverage for his future projects.