Miss. developers' murky past includes fraud

Because of their “essential and active roles” in the stock fraud and their behavior afterward, the judge tacked on civil penalties of $400,000 for each Kern brother, for a total judgment of over $9.8 million. He also found that Donald Kern’s 2002 bankruptcy filing did not relieve him of the obligation to pay.

Currently, the government has recovered $565,000 from the Kerns, as a result of Donald Kern’s bankruptcy, said Richard Simpson, an SEC lawyer, meaning the brothers still owe the government well over $9 million.

“All of the appeals are done,” Simpson said. “We won hands-down. The judgment is affirmed. So we have an impregnable judgment that we’re trying to collect.”

Asked about a claim by Donald Kern that his debt was satisfied in “arbitration,” Simpson laughed.

Richard Kern said he “of course” will pay the judgment but when he does so is “between myself and the SEC.”

The Kerns also would not divulge details of numerous other real estate developments on which they claim to have worked.

Richard Kern said he had developed “a myriad of projects” from apartments in Colorado to shopping centers in California, restaurants and strip centers in Arizona and “a really big project in Russia.” Asked to name one, he replied, “I’d just as soon not.”

'I can't remember them'
Donald Kern said he has worked in construction and real estate since he was in high school. Asked to name a single project, he replied, “Off the top of my head, I can’t remember them right now.”

Other members of the firm, including its chief media representative, also would not name any projects that the men had developed.

“I’d have to check and see what I’m at liberty to give out,” said Angela Kurlander. When pressed for the name of just one project, she said, “This is your focus at MSNBC, how can we make everything as negative as possible?”

Danny Coates, a Hancock County resident and local point man for Paradise Properties Group, said that he had known Richard Kern for many years. But when asked the same question, he said “I really don’t know” any previous projects that Kern had developed.

Attorney Gerald Gex, who works for the county and was assigned by Kellar to discuss the case with MSNBC.com, called the refusal by the Paradise representatives to name past projects “just the dumbest thing I’ve ever heard in my life,” adding, “That doesn’t sound right.”

Another member of the Paradise team who would not name any projects undertaken by the Kerns is Mike Cure, a well-known local businessman and the Kerns' partner in the Hancock County developments.

Cure, whose family has been represented by Gex for many years, said he was aware of Richard Kern's SEC case and was "not at all" concerned that the brothers' past legal troubles would taint his ventures with them.

"Richard seems to be a forthright guy who looks to have a good relationship with bankers," he said. Cure added that because he and his family own all of the land involved in their deals with the Kerns, "I've got control."

"What Richard has brought to the table here is a vision," Cure said. "He also has financing capabilities and I think he's going to do some good things for the community. We certainly need it in this area."

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