Embattled Johnston developer Daniel Pettit is at the center of new allegations he tried to fraudulently give one of his investors a valuable West Des Moines development site that’s entangled in foreclosure and several court cases — as he sits behind bars in Polk County.
Dallas County Recorder ReNae Arnold confirmed this week there had been a request to the Polk County sheriff’s and county attorney’s offices to investigate who had signed off on a notarized quit-claim deed for a 10-acre parcel near the new Des Moines University campus. Pettit had planned to build an apartment complex there as part of the Village at Sugar Creek development.
The transaction sought to give the property, in Dallas County just west of the Polk County line, to a limited liability corporation managed by Michael Metcalf, a Georgia investor. The quit claim carried Pettit’s signature and the notary stamp of Mike Reysack, an Ankeny real estate agent.
Pettit previously signed a legal document, filed in court, acknowleging he owes about $1.9 million to Reysack stemming from a failed legal cannabis business in Nevada, court documents show.
Dated April 14, the quit claim deed was filed at Arnold’s office. But Pettit has been behind bars since January in Polk County for contempt of court after what the judge in his case called “empty promises and lack of candor as to his true financial position” concerning his creditors.
The Dallas County filing was discovered by investors concerned about the legal implications of Pettit’s alleged criminal activities and his recent transfers of assets as he faces numerous civil lawsuits.
Typically, attorneys, not notaries, are approved to visit inmates at county jails to carry out necessary legal matters. If the land was transferred fraudulently or someone faked Pettit’s signature, the judge could void the deal, and those involved could face legal implications.
Reysack and Metcalf could not be reached this week for comment. Nor could Pettit, who isn’t expected to be released until July. County attorneys’ officials in Polk County, where Pettit is in jail, and Dallas County, where the land is located, did not respond to requests for comment.
Licensed until August 2023 as an insurance salesperson ― but never as an investment adviser ― Pettit, 43, took money from a wide mix of investors around the country, court documents show. A Watchdog probe last December found judgments and debts totaling nearly $70 million against him and limited liability corporations in which he is involved. His failed deals affected not only the yet-to-be-constructed projects and its investors, but contractors and family members.
Adding to his legal problems, Pettit disappeared for a month at the end of last year after he was ordered to report to jail for six months, and he is at the center of a sweeping criminal investigation involving the FBI, Johnston police and state authorities. As his troubles have escalated, business associates have accused him of fraud in transferring assets, like his Johnston home with a 9-hole golf course and heated pool, in spite of court battles over the properties and existing liens against them.
Even while investors were seeking repayment last year, Pettit allegedly liquidated bank accounts, 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 was jailed after he failed to deliver on promises he made to the court, court documents show.
Authorities have been tight-lipped about their investigation, which includes fraud allegations by investors in the uncompleted Sugar Creek development.
Pettit created a limited liability corporation in 2021 to develop student housing and commercial space north of the Des Moines University campus. The biggest lender to that corporation, called DB Booneville, was Lincoln Savings Bank. The bank loaned DB Booneville almost $10.3 million on a note that matured in October 2022. DB Booneville defaulted, and Lincoln Savings foreclosed, court records show.
Pettit also signed a promissory note to a Delaware limited liability corporation called DMU, Iowa Land LLC for $5.5 million. Venture capitalist Lowell Kraff of Miami Beach managed that entity, records from Iowa’s secretary of state show. Kraff is executive chairman of a company called Trivergance LLC.
That loan also went into default, court documents show.
Lynn Hartman, a lawyer representing Lincoln Savings in the foreclosure, declined to answer questions about what oversight was in place to prevent Pettit from misusing the bank’s funds.
“At this point, given that there is ongoing litigation Lincoln Savings Bank will not be commenting,” she wrote in an email.
The property, at 8180 Riverview Drive near South 81st Street and Booneville Road, had received approval from the city of West Des Moines for a six-building apartment complex. But after Pettit obtained the Lincoln Savings Bank loan, the project failed to materialize.
Lincoln Savings won a $9.3 million civil judgment against Pettit, and the bank is scheduled to go to court against his corporation, DB Booneville, in August. The city and the project’s insurer, meanwhile, have disagreed in court over who should be responsible for paying for site improvements that the city issued bonds to pay for.
Pettit has no criminal record in Iowa. But he also is at the center of a case involving a burglary at his home that police have suggested in reports may have been staged.
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.
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