California couple looks to collect money from developer Daniel Pettit, joining other investors

Johnston developer Daniel Pettit sent flowers to Dana and Jerry Ogden after the 2021 loss of their 27-year-old son to fentanyl poisoning ― a gesture that Dana Ogden said moved the grieving California couple deeply.

Two-and-a-half years later, the Ogdens are among numerous investors and lenders from across the country wondering if they will ever recoup a large sum of money they gave Pettit in an investment deal gone bad.

Ogden, of Dublin, California, near San Francisco, told Watchdog she has tried to reach out to the FBI, the Iowa Attorney General’s Office, the Iowa Insurance Division and Johnston police as they investigate Pettit, 43, amid widespread allegations of fraud.

She said Johnston police appear to be investigating her allegations that Pettit never repaid her and her husband the $60,000 he persuaded them to invest in a West Des Moines apartment development deal. She said she has the evidence and paperwork showing that Pettit took their money and that he failed to repay them in accordance with a legal agreement they both signed.

The Iowa Insurance Division also called recently, Ogden said. “I asked, ‘Can I get any of our money back by helping you?' They said, ‘No. The only thing we will do is keep him in jail longer and keep him from hurting more people.’ I haven’t heard anything back from the FBI.”

Pettit, who was arrested Jan. 12 after failing to show up in early December to serve a six-month jail term for contempt, was still in the Polk County Jail last week and could not be reached for comment.

At least six investors have complained to Watchdog that they don't know who's coordinating the criminal investigation of Pettit, though some say they have talked to federal, state and local authorities.

A Watchdog probe in December found judgments and debts of nearly $70 million claimed against Pettit and limited liability corporations in which he is involved. The court actions show his failed deals affect not only yet-to-be-constructed developments in West Des Moines, but also a wide swath of people, lenders and companies beyond Iowa. His ex-wife and his mother, who lives in his hometown of Cedar Rapids, also are tangled up in court cases.

More than two dozen cases filed in Iowa courts show banks have foreclosed on properties Pettit or his corporations purchased. Contractors from consulting to construction have filed mechanic's liens on his property. Investors from Illinois, Minnesota, New Jersey, Nevada, New York and Utah have obtained court judgments worth millions. Several former business partners accused him of fraud after he defaulted on tens of millions he borrowed, court documents show.

A one-time mayoral candidate in Waukee, the Iowa native had announced some of the most ambitious projects in that city before the pandemic hit ― from a 40-acre, $101 million entertainment district called The Quarter to an 88,000-square-foot event and office space nearby. But his projects and lavish lifestyle began to crash in 2022 after he'd recruited numerous investors in The Village at Sugar Creek and Banks Landing at Booneville Road and South 88^th Street, north of Des Moines University’s new campus in West Des Moines.

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After months of erratic behavior toward one-time business partners or investors, Pettit disappeared for weeks before being jailed Jan. 12. His arrest came after he repeatedly ignored court orders and failed to respond to subpoenas in three separate civil lawsuits against him.

Judge Jeanie Vaudt said Pettit liquidated bank accounts in spring and summer 2023, tried to write a check for a $275,000 Michael Jordan jersey, and transferred around $100,000 from a personal account to a joint account with a woman in Nevada. He'd also applied for life insurance with a $10 million death benefit to be awarded to his own revocable trust, the judge found.

"To put it plainly, it appears that defendant Daniel E. Pettit has consistently not been forthcoming to plaintiffs about his true financial condition and the kinds of results he could deliver to his investors," Vaudt's contempt ruling said. "Many individuals and companies ― big, medium and small ― potentially have been economically damaged by (his) empty promises and lack of candor as to his true financial position... . It is reasonable to assume that some of the money funding that lavish lifestyle came from defendant Daniel E. Pettit's investors."

Pettit is scheduled to remain behind bars for six months as authorities investigate the claims against him.

Federal cases seek to resolve West Des Moines development

In the months leading up to his arrest, investors have told Watchdog, Pettit promised proceeds from loans or the sale of his assets to make them whole for debts worth millions that had gone unpaid.

Former partners in a Las Vegas legal cannabis business filed civil court papers this month saying Pettit promised proceeds from the sale of an expensive painting of champion boxer Canelo Alvarez by pop artist Rob Prior as well as cash payments through 2027 to reimburse them for $1.9 million owed in a court judgment tied to the venture's failure.

On Jan. 25, Philadelphia Indemnity Insurance Co., which issued bonds for the unfinished Sugar Creek development, also filed a federal lawsuit in the Southern District of Iowa against Pettit, his DB Booneville LLC and others who partnered with him.

The insurance company demanded the repayment of $3.4 million from the bond proceeds for the project after DB Booneville failed to make promised improvements for the development.

The insurance company has sought injunctive relief and alleged breach of contract by Pettit; his company Encompass Holdings; Pettit’s ex-wife, Rachael; fellow investor Bernard Feldman and his wife, Ava; and associated trusts.

Pettit also listed for sale this month his Johnston mansion, which at $5.5 million is one of the most expensive residential properties in Iowa. The home at 7395 100^th St., which has a swimming pool and nine-hole golf course, has numerous liens placed against it, Iowa secretary of state records show.

'I just want you to have a win,' Pettit allegedly told grieving couple

Ogden said her son Austin, who lived in Las Vegas and knew Pettit, died of fentanyl poisoning in June 2021 after going out with some people at a Los Angeles convention. The case is still being investigated by authorities there, she said.

She said her son had worked as a host for high-end clients at Wynn Las Vegas, a luxury casino-hotel, and he'd been associated socially with Pettit. After the funeral, she said, she and Pettit struck up conversations via text and phone calls.

“Daniel was sweet as punch. He kept saying how sorry and sad he was… and that he could only imagine what we were going through,” she said.

As Christians, she said, she and her husband also were moved by Pettit’s professed faith and the good deeds he talked about carrying out with churches and organizations. They eventually invested $60,000 in the West Des Moines Sugar Creek development after he promised a $1 million return over time, she said.

“We started to think we wanted to do something Austin would have wanted us to do. The more he talked… we felt led to invest," she said. "We wanted to invest the proceeds in a fentanyl awareness charity.”

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The couple, who she said had just lost a large amount of money to the former tenant of a rental property, were cautious about future investments. But Ogden said she and her husband, as well as their lawyer, were reassured after reviewing legal documents guaranteeing their investment, with payments to begin when the project was completed in 2023.

“Daniel kept saying, ‘You guys have been through so much; I just want you to have a win.’ We wanted a win, too,” she said.

After Pettit received their money in 2022, Ogden said, she became concerned when he sent her texts and pictures of him flying his sons by private jet to Las Vegas.

“He said he adopted the twin boys because his family member was a drug addict, and he put them through college, and they were going to be graduating as successful doctors,” she said. “He told us about the box seats he owned at the Allegiant Stadium in Las Vegas.”

Later, she said, “he sent us pictures of him kneeling in front of our son's memorial," a Raiders Legacy Brick at Allegiant Stadium in Las Vegas.

She said Pettit told her that he was delayed in repaying them because his father was very ill.

But the big red flag, she said, came in March 2023 when another man who’d done business with Pettit called them, screaming that Pettit owed him money and that he was coming after investors too.

Ogden said she told Pettit that she and her husband needed out of the Sugar Creek deal.

“I said, ‘We are tapped out emotionally, physically and mentally. Please, let us walk,'” she said. He said, 'No problem'… . It took two months, but everybody signed the legal paperwork on the dotted line. Then the money never came.”

Ogden provided Watchdog with a copy of the signed agreement between them, their limited liability corporation, Pettit and Village at Sugar Creek Apartments LLC.

Authorities have thus far been tight-lipped about their criminal investigation into Pettit’s business transactions. Johnston police also are investigating allegations that Pettit may have staged an armed robbery at his home involving an acquaintance, Moustapha Moustapha, of California.

Pettit alleged Moustapha, who runs a high-end car rental business in Los Angeles, barged into his Johnston mansion brandishing a gun and demanding money he said Pettit owed him.

Two of Pettit’s former business associates who witnessed the encounter told Watchdog that Moustapha did not appear to have taken all of the items Pettit alleged were stolen, including Cartier jewelry, handguns, Rolex watches and a luxury Bentley automobile.

Moustapha, who has been released from jail and returned to Los Angeles, has not been cooperative with his own attorneys, Nick Sarcone and Mike Culp, court documents show.

The two attorneys applied this month to withdraw from representing him, saying there has been "a material and irreparable breakdown" of the attorney-client relationship.

"The undersigned attorneys are unable to communicate with the defendant in a manner consistent with the attorney client relationship. Further, the undersigned attorneys and Defendant fundamentally disagree on the course of proceedings in this matter," the attorneys wrote in a court motion.

Moustapha, like Pettit, could not be reached for comment. Moustapha has a court hearing Friday that will determine whether he needs new representation.

Lee Rood's Reader's Watchdog column helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Reach her at lrood@registermedia.com, at 515-284-8549, on Twitter at @leerood or on Facebook at Facebook.com/readerswatchdog.

This article originally appeared on Des Moines Register: Daniel Pettit owes $60K borrowed during grief, California couple say