Verona campus for Nexus Services Inc. sold off at public auction for $3.4 million
STAUNTON — The Verona campus for Nexus Services Inc. was sold off at a public auction Wednesday for $3.4 million as the company's legal and financial woes continue.
A notice for the sale of the 5.5 acre property, located at 113 Mill Place Parkway, was posted a few days ago. The public auction was held atop the front steps of the Augusta County Circuit Courthouse after Nexus defaulted on its payments.
Frank Root, a local real estate developer, successfully bid for the property Wednesday. The News Leader reported in 2015 that Nexus purchased the property from Countryside Holdings, Root's company. At Wednesday's auction, Root was identified as the lender for the property, which allowed him to start the bidding at $3.4 million. Nobody matched his bid.
Nexus reportedly broke ground at the Mill Place Office Park with a $22 million construction and relocation plan in place. County records show the company bought the property for $4.7 million. On Wednesday, entry to the Verona campus was blocked off.
Started by Michael Donovan and his husband, Richard Moore, both convicted felons, Nexus helps post bond through third-party licensed bondsmen with federally-approved insurance companies for people being held in immigration detention centers while they await court cases. The business grew into a multi-million dollar endeavor.
Reached for comment, Donovan claimed the decision was made last summer to cease operations in Augusta County, and he made an unsubstantiated claim of "local corruption" as the reason for the move. "This decision made us refocus our resources towards building our team in our new, more conducive corporate office location. The costs of maintaining both the Verona and a new location would be untenable," he said.
Donovan, whose company has filed numerous, unsuccessful lawsuits against local officials and law enforcement, said litigation is forthcoming against each member of the Board of Supervisors and other county officials.
He said Nexus is still conducting business, and said the company will be moving into new corporate offices. "The Nexus team is excited about our new location, details of which we'll be sharing soon," Donovan said.
Nexus and its owners are facing other issues as well.
In May, a federal judge found the company's owners in civil contempt for noncompliance in a 2021 lawsuit filed by the Consumer Financial Protection Bureau that alleges deceptive practices, and said default judgements will be entered against Donovan, a majority owner, along with Moore and Director Evan Ajin. A month later in the same case, the states of Virginia, New York and Massachusetts, along with their respective attorney generals, filed paperwork demanding roughly $600 million from Nexus and its three owners in a legal battle that has lasted nearly two years.
A two-day hearing for damages in the CFPB's federal lawsuit against Nexus is slated to begin Aug. 15 in Harrisonburg, court records show.
Donovan maintains that the CFPB's funding method — which is being challenged in the federal courts — is illegal. The U.S. Court of Appeals for the Second Circuit and the Fifth Circuit have split on the issue, with the Second Circuit ruling the CFPB's funding is constitutional, and the Fifth Circuit ruling it's not.
"We anticipate the United States Supreme Court will rule the CFPB unconstitutional, aligning with the stance of the 5th Circuit," Donovan said.
In October, members of the Augusta County Sheriff's Office and Virginia State Police searched the Nexus campus and the Fishersville home of Moore and Donovan after they were indicted by the Augusta County grand jury on single felony charges of obtaining money by false pretenses and conspiracy to commit a felony, as well as two charges each of financial exploitation of a vulnerable adult. The couple, along with Timothy Shipe — also a vice president at the company who was indicted on two felony charges — are accused of stealing $426,000 from Zachary Cruz, the brother of the convicted Florida school shooter Nikolas Cruz, after befriending him following the 2018 mass shooting and moving him to Virginia. A five-day jury trial is set to begin Dec. 11.
Moore is already facing 10 federal counts of employment tax fraud after being accused in 2021 by government authorities of not paying the IRS more than $1.5 million during a six-year period. According to the Justice Department, Moore allegedly directed the company’s day-to-day management and was responsible for paying employment taxes to the IRS.
Earlier this month on July 13, Moore, facing a perjury charge in Louisa County, pleaded guilty to an amended felony charge of forgery, court records show. He was given no jail time. Moore still has a pending perjury charge in Augusta County.
Last month, Donovan and Moore were ordered to pay $1.1 million to a Waynesboro law firm in a breach of contract lawsuit. Both were no shows in court when the ruling was made.
Brad Zinn is the cops, courts and breaking news reporter at The News Leader. Have a news tip? Or something that needs investigating? You can email reporter Brad Zinn (he/him) at bzinn@newsleader.com. You can also follow him on Twitter.
This article originally appeared on Staunton News Leader: Verona campus for Nexus Services Inc. sold off at public auction
