Arrested development 

How the Circle H Ranch went from "the greatest story in western Montana" to a cautionary tale

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He says Circle H's problem is not opportunists in Missoula, but Seale and his partners. Raser calls them "extremely greedy people" who wanted to "wring every nickel out of the project."

Raser denies taking the Northwestern Energy check. As to the other allegations, he says that the partners owed him money that he had personally fronted to keep the project going. The gravel pit sales helped him recoup those losses.

If anything, Raser says it was his ideas that stood to make Seale and other investors tens of millions of dollars. "It seemed that these partners wanted to use me as the local yokel to get this done," he says.

In the Raser and Seale feud, it can be tough to glean the truth. It is clear, however, that Seale and Circle H had been accused of running out on the tab prior to Raser's prosecution.

In May 2004, former Circle H partner Jeff Howard alleged that Circle H did not abide by a severance contract crafted seven years prior. According to the lawsuit, Seale, his son and the third partner, Regina Hague, agreed in 1997 to buy Jeff Howard out of the partnership for $150,000. Circle H paid the first installment of $10,000 just after negotiating the deal, court documents say. But no other payments were made. Months after filing the lawsuit in 2004, Jeff Howard and Circle H settled the case.

Seale and the Circle H were also accused of not living up to financial commitments in 2006, when James Cozzetto, an Oregon builder who owned a company called Blue Skies Development, also filed suit. Cozzetto alleged that Seale and Circle H violated contractual obligations. According to the lawsuit, Cozzetto loaned $500,000 to the project in 2002 and helped secure $3 million in outside financing from Sterling Savings Bank.

Cozzetto, like other investors, alleged in his lawsuit that he hadn't been repaid money owed by Seale. According to a lawsuit filed in Missoula County, "Eventually Circle H stopped paying its vendors, including Sterling, and Cozzetto and/or Blue Skies were forced to begin to make payments on behalf of Circle H..."

The court ordered Seale and the Circle H pay Cozzetto $95,000 and awarded him two Circle H lots.

click to enlarge Cal Pickens serves as an adviser to the Circle H Ranch. - PHOTO BY CHAD HARDER

There have been at least four other civil lawsuits filed against the Circle H since 1999.

Ralph Swinburne, who invested $100,000 in the Circle H, was among the men from New Jersey who joined Seale on hunting trips to Montana. It was hard not to fall for the area, Swinburne says. He still has an "I love Montana" sticker on his car.

Swinburne had hoped to own a lot at the Circle H one day, but he admits it doesn't look like that will happen now. He also doesn't expect to get his money back.

"It just didn't have the right people at the helm," he says.


In the summer of 2008, RE Loans manager Barney Ng arrived in a small private plane at the Missoula International Airport from Jackson, Wyo. Seale met him at the airport and, because Ng was on a tight schedule, drove him directly to the Circle H.

"Barney was a fast and loose person," Seale says.

Ng, his brother, their father, and a fourth partner, attorney Bruce Horwitz, operated several enterprises, including B-4 Partners and Bar K Inc., that specialized in investments and mortgage lending.

Barney Ng presided over the group's lending business. Desperate for cash, Circle H saw Ng as a savior for the development. Seale and Cozzetto had entered into an agreement to build the West Pointe portion of the property, but the deal went bad and Cozzetto's lawsuit put Seale in a tough spot.

At the time, Seale says, it seemed like Ng could be trusted. Hindsight, however, provides a different perspective.

"I think that you may have considered him a predator," Seale says. "We got trapped at absolutely the worst time."

During his visit to Missoula, Ng appeared to be exactly what the Circle H partners needed. Seale found him to be detail oriented and encouraging. He sketched the terms of a new mortgage agreement on a yellow legal pad at Seale's living room table.

To say the terms were flexible would be an understatement. According to the mortgage note crafted by the California-based lender, monthly payment installments on the $5.7 million loan would cover interest only, "from time to time."

At 12 percent interest, payment in full was due within 60 months. The mortgage agreement conceded that the liberal loan terms left it unlikely that Circle H would be able to pay within the allotted time. According to the mortgage, "The payments required under this note are not sufficient in amount to reduce the principal to zero on the maturity date, therefore there will be a balloon payment equal to the unpaid principal plus all accrued and unpaid interest and other charges."

Seale says that he could have made it work.

"It sounds worse than what it is, I guess," he says. "Nobody anticipated what happened to the country... At the time, I didn't see the real threat."

There was a threat brewing in California. As Seale signed off on the mortgage, the Ng family was under scrutiny.

In 2002, RE Loans began raising money to finance mortgages through private investments. Concerns about the legality of the company's investment protocol in 2007 prompted it to stop soliciting investments.

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