Do You Believe in Coincidences?

By The Banker | Blog Posts, Personal Finance, Taxes, Texas
12 Apr 2013
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Manuel IsquierdoSAISD Superintendent candidate Manuel Isquierdo claims that his troubled experience proves he has learned from his mistakes, which will make him a better leader of my kid’s local school district.

My past experience as a distressed investor helps me plumb the public record of personal financial distress very quickly.

Let’s see what the public record shows.

Isquierdo’s home and mortgage history in Tucson, AZ

Isquierdo reported that his large IRS tax lien problems stem from the loss he took on a home in Stockton, California that he bought for $700,000 and later sold for $300,000.

He also said he has “learned from his mistakes” which is what will make him a better leader of SAISD.

If you had taken a $400,000 loss on a home, would it be fair to say you have ‘learned from your mistake’ when you move into a $1.15 million golf community home with nearly no money down?

I would like to answer that one myself.  No.  It is evidence, at least financially, of a guy who learned very little from his mistakes.  Instead, it is evidence of a guy desperately grasping for a financial solution that will only hurt him even worse in the long run.

Isquierdo purchased his home in a golf community named “El Conquistador Country Club” for $1.15 million on April 28, 2011 from Roland and Rhonda Freeland.

Isquierdo and his wife Edith purchased the home with a $5,000 down payment, and the sellers of the property, the Freelands, retained a Deed of Trust (aka a Mortgage) for $1.145 million.

Traditional mortgage-lending with a bank requires a 20% down payment.  One of the causes of the mortgage crisis was the no or low-money down mortgage, in which purchasers had little ‘home equity’ and therefore little incentive to stay current with their mortgage if they got into financial trouble.  Default rates on low-money down mortgages are very high.

The Isquierdos began their home ownership in the Tucson golf community on a $1.15 million home with no home equity.  After reportedly losing $400,000 on his Stockton, CA home, he did not regroup and learn from his mistakes.

Isquierdo and his wife do not have a 20% down-payment, nor a 10% down-payment, nor even a 3% down-payment mortgage – of the type that the FHA/VA offers for veterans.  Isquierdo and his wife have a 0.43% down-payment mortgage.

History of home mortgage mistakes.  Learning opportunities?

It appears from public records that things are not going smoothly with this choice.

Rhonda and Roland Freeland, the Deed of Trust holders, filed a UCC lien with the Arizona Secretary of State in November 2012, naming Isquierdo and his wife as debtors, securing “fixtures including proceeds and products, general intangibles, and vehicles.”

Typically a UCC lien is filed to secure a business loan rather than a home mortgage, but we can infer from this state filing that the Freeland’s feel their Deed of Trust/mortgage to be insufficiently secure.

Unfortunately, it gets worse.

A Notice of Trustee’s Sale of foreclosure was filed 2/19/13 with respect to this property, which indicates that the $1.145 million Deed of Trust is being enforced by the lien holders, the Freelands, for non-payment.

The home is now listed for sale on Zillow.com at $975,000.  That’s down from a listing of $995,000 on 2/18/13, and $1,150,000 on 12/13/12.  This is the sign of a distressed situation.

If the home eventually sells for, say $945,000, he’ll still be on the hook for approximately $200,000 in a mortgage deficiency balance.  By ignoring the IRS tax lien in 2011 and taking on a $1.15 million home with no money down, he managed to exacerbate his precarious financial situation in a way he didn’t have to do.  That’s a self-inflicted financial wound.

Needless to say many folks earning $305,000[1] per year might have managed to address their IRS liens by choosing a more affordable home situation.

All of this is awful and painful for them and not pleasant to point out.  On the other hand, it does not indicate a man who is learning and improving as a result of his past mistakes on his Stockton, CA home.

 

History of Tax Liens

The first tax lien problem in the public records actually pre-dates the approximately $150,000 in IRS liens.

The State of California filed a state tax lien on the Isquierdos in May 2009 for $17,783.  This California State Tax lien just recently got cleared up on February 1, 2013, only two months before he was named the sole finalist candidate for the SAISD Superintendent position.

Did Isquirdo learn from the experience of the $17,783 state tax lien?

Not exactly, because his tax lien position worsened two years later.

Following the California State Tax lien of 2008, the IRS filed the following liens.

2/18/11: $107,056 – Federal Tax Lien

1/25/12: $45,618 – Federal Tax Lien

Look, I can’t tell from the public record exactly the source of the Federal Tax Lien, but I do know that this happens only over a long period of time after the IRS has gone to extraordinary lengths to collect past tax debts.

Delinquent taxpayers literally get years of notification before the IRS files this type of lien.  Taxpayers who approach the IRS in a straightforward manner, with a payment plan or offer to make good on their debts do not get suddenly slapped with this type of Federal Tax lien.

At the time of the first filing, Isquierdo earned a $230,000 salary from the Sunnyside District in Tucson, later increased to $305,000 in September 2011.  Instead of paying his Federal Tax Liens, he bought a $1.15 million home two months later with virtually no money down.

 

History of traffic and license violations.  Is this also a learning opportunity?

I think it’s safe to say nobody begrudges anyone an occasional speeding ticket or parking violation.  We learn from the painful $25 or even $100 fine, and we resolve in the future to park only in designated areas or to obey traffic speed indicators.  No problem there.  It’s a learning experience.

The problem, however, arises if we do not learn from our mistakes, avoiding future fines and violations.  The public record on Manuel Isquierdo makes a mockery of his claim that he’s a man learning and improving from his mistakes.

One or two citations is human, fallible, and no big deal.  Nine court citations in five years is weird, problematic, and gives lie to the ‘learning as he goes’ excuse.

From the public record:

  1. 1/24/08 – Lack of Registration, Guilty Plea, Oro Valley Municipal Court
  2. 7/7/08 – Resident with Out of State Plates, Guilty Plea, Marana Municipal Court
  3. 7/23/09 – Failure to stop at red light, Guilty plea, Phoenix Municipal Court
  4. 7/27/09 – Guilty plea, suspended plates, Tucson Municipal Court
  5. 8/7/09 – Failure to carry vehicle registration, Marana Muncipal Court.
  6. 10/21/09 – Non-Criminal Ordinance violation – Tucson Municipal Court
  7. 2/22/10 – 2 Traffic violations (including failure to obey signs) and one misdemeanor for driving with a suspended license.  Tucson City Attorney dismissed these
  8. 7/8/11 – Speeding/Traffic violation, Forfeited bail. City of Eloy Justice Court,
  9. 11/26/12 – Unspecified non-criminal charge, Tucson Municipal Court

 

I’m tempted to speculate on what is going on here.  Is he just laser-like focused on improving student outcomes – so little things like registrations, license plates, driver’s licenses, speed limits, and traffic laws don’t faze him?

Is there a part of him who enjoys petty brushes with the law, or the feeling of ‘getting away with something?’

Is he incapable of following all the minor bureaucratic rules that serve as mini-tyrants over all of our daily lives?[2]

Concluding, scary thought: I don’t believe in coincidences

These public record histories of not-learning and not-improving directly contradict this candidate’s recent plea to the SAISD community.

I have to confess, however, this isn’t my biggest worry about Manuel Isquierdo’s candidacy and the SAISD board.

I haven’t addressed the investigation of Isquierdo for charging his school district credit card for $12,500 in improper expenses, or Isquierdo’s grand jury subpoena for his and his wife’s role, in marketing and selling a program called ‘Project Graduation,’ for which a school district superintendent was fired following an investigation.  I haven’t studied the public records on those so I won’t comment, although I find them significant and troubling.

The selection of Manuel Isquierdo reflects terribly on the SAISD board.

At the end of the day, this process has reminded me that I don’t believe in coincidences.

Members of the SAISD board have stated that they knew this was a candidate with “some history,” or “baggage.”

Unfortunately my immediate thought was the following: A superintendent with a known history of financial distress and a record of desperate moves to correct it could be just the kind of guy that members of the SAISD Board could do business with.

If you see the board the way I do, it just doesn’t seem like a coincidence.

 

Please also see subsequent post: Recalling Isquierdo from the “Where Are They Now File” in August 2013

and a later post in the Tucson paper about his ongoing financial trouble, tax liens, and another bankruptcy from December 2013.



[1] or more, if you include his assistant-superintendent wife’s salary

[2] If it’s the last one, boy is he going to chafe at SAISD.  Welcome to my 7 year-old daughter’s life at Bonham Academy!

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13 Comments

  1. I feel the same way. Thanks for doing the research to back it up.

  2. Viktoria Valenzuela says:

    Thank you for letting us know your findings! This guy sho not be allowed to manage a damn thing, especially our school district! I will repost this blog to everyone and I hope we can find a better candidate who actually graduated from a San Antonio school!

  3. Vanessa Martinez says:

    Are you going to any of the community meetings to question this guy? You’re on the right track, and exactly what we need to attend these meetings. I will try to go, and ask these questions as well, but these are your questions, and you’ve got the knowledge to back them up. We need you in our corner!

  4. ToddR says:

    This guy has all the attributes of a deadbeat. If I were you, I’b be thinking about private school for my kids and I’d probably put my house on the market, too. As a tax payer, you’ll get stuck with the bill when he goes all Keynesian with the school district’s budget.

  5. Manny says:

    If you look around town at school districts that are usually in trouble for one reason or another (SAISD, South San, etc.), you will see a pattern of the School Boards hiring Superintendents with “baggage”. As you so eloquently pointed out, it is easier for them to do business with these types of people. The reason why? Because the School Board members themselves have “baggage”. From nepotism, to skimming money, to receiving kick-backs from contractors, these people want to continue to their ways with approval from above. And yet people in these school districts keep electing the same names to the school board over and over. Thanks again for this investigation! Great work, and I am glad I discovered your blog :)

  6. [...] “Do You Believe in Coincidences?”, Bankers Anonymous, April 12, 2013.  The Bankers Anonymous post is worth reading in its entirety because of the detailed research about Isquierdo’s tax and real estate problems. [...]

  7. anonymous says:

    I worked with this character in a previous district. He is a classic sociopath, fit the classification to a ‘t’. Also he is a deadbeat dad. The real reason he owes federal taxes is because he would claim max dependents on his w-2 when we would receive lump sum payments. Eventually the taxes have to be paid, but Isquierdo always thinks he is above the law (a signature trait of a sociopath). The real question should be if he and his wife make over 400K in combined salaries (and he has transportation and misc. allowances) where is all of their money being spent? This should be a big question people have. Are there vices at play? Substance abuse, gambling, shopping? It is clear he is not squirreling money away.

    • The Banker says:

      This is interesting, as it ties the petty traffic violations to a larger pattern of believing he’s above the law. Thanks for your comment.

  8. Alonissos says:

    Have any of the school board members apologized for being so stupid and careless as to almost hire this guy?

    • The Banker says:

      Their main response has been 1. Blame the consultant. 2. Blame other board members 3. Disagree about who knew what, when. Haven’t seen a personal mea culpa yet.

  9. [...] person can report on a level of a news organization. A Banker’s Anonymous post in my hometown has extensively detailed the financials of SAISD Superintendent candidate Manuel Isquierdo. The author does not just extensively detail his [...]

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