DENVER (KDVR) — An Englewood man who owes 189 home buyers $6 million for tiny homes they never received spent money in some very curious ways, according to a trustee assigned by the U.S. Bankruptcy Court in Denver.
Matthew Sowash, the man behind Holy Ground Tiny Homes and Revelations in Christ Ministries, filed bankruptcy on Oct. 7, 2022.
Numerous customers told the Problem Solvers they paid for tiny homes they never received.
An 81-page report filed Friday found the nonprofit spent more than $400,000 to purchase and repair race cars and other vehicles, plus more than $35,000 on real estate in Colorado and Alaska and $32,000 on meals.
The purchases happened between October 2020 and August 2022, the same time the company was collecting deposits from tiny home buyers for homes that often were never delivered.
In the first half of 2022, Holy Ground spent $55,000 on “extraordinary travel-related expenses” to Las Vegas while only $10,000 of these travel expenses “appear to be related to the delivery of the tiny homes,” according to the report.
The report includes a comment from Sowash’s legal team that the Las Vegas travel “was part of an employee appreciation benefit.”
Sowash’s attorney Aaron Conrardy has not returned an email from the Problem Solvers seeking comment, but the judge has given Holy Ground Tiny Homes until Sept. 22 to submit a turnaround plan for the troubled company.
Attorney Joli Lofstedt, who was assigned to the bankruptcy investigation, raised serious doubts about whether that can be achieved, writing the nonprofit “would need to almost double the sales price of the tiny homes. Trustee does not have information or expertise to evaluate whether there is a market for the tiny homes at such increased sales prices.”
The investigative report found that in 2021, Holy Ground spent $4.4 million on materials to build homes that it sold for $2.6 million. In 2022, it spent $5.3 million to build homes it sold for $2 million.
Attorney Arthur Lindquist-Kleissler, who represents a couple that claims to have given Sowash their life savings for a tiny home they never received, told FOX31 the investigative report filed by the trustee didn’t go far enough.
In a statement to the Problem Solvers, Lindquist-Kleissler wrote in part:
The Debtor (Matthew Sowash) withdrew cash from October 6, 2020 to August 31, 2022 in the amount of $586,364.86 allegedly to pay subcontractors. These cash withdrawals are virtually all in even dollar amounts sometimes the same day and sometimes only a day or two apart. The Debtor apparently did not maintain a description of the Payees for the withdrawals. But apparently no investigation was done to contact subcontractors to determine whether they received cash payments from the Debtor and if so how much. Payment in cash without tracking or documenting the basis for the transaction is clearly mismanagement and an opportunity for fraud. How is it possible that the Debtor has no payroll or sub-contractor records to substantiate the payment of hundreds of thousands of dollars? The IRS issues, the labor issues raise multiple red flags.
My clients gave their hard earned money, as well as borrowed monies (their life savings) to a Debtor and it’s principal who knew or should have known that they could not deliver on their promises. The Trustee’s Report evidences far more than “incompetence” or mismanagement on the part of the Debtor and its management.Attorney Arthur Lindquist-Kleissler
Englewood Police have been investigating Sowash for more than a year but have yet to submit a criminal case to Arapahoe County prosecutors for consideration.