BOISE, Idaho — An attorney for St. Luke’s Health System says that evidence points to Ammon Bundy setting up shell corporations and transferring assets into them.
St. Luke’s has filed new motions to stop what it believes is an attempt to avoid paying damages in its defamation lawsuit against the far-right activist and his People’s Rights Network.
“All indications are that Bundy has made millions as a professional extremist and conflict entrepreneur and that he is now doing his best to fraudulently convey his considerable wealth into shell corporations and Wyoming trusts,” St. Luke’s attorney Erik Stidham wrote in a court filing Tuesday.
St. Luke’s filed a lawsuit in May 2022 after Bundy and an associate, Diego Rodriguez, led protests at the Boise hospital over a child welfare case involving Rodriguez’s grandchild. The lawsuit names as defendants Bundy, Rodriguez, the People’s Rights Network and other business entities affiliated with the two men. The suit claims the defendants posted lies about the hospital system online and did so in part for political and financial gain.
Bundy, who ran for Idaho governor as an independent candidate in 2022 after dropping out of the Republican primary, flatly denied the allegations that he is hiding assets and money.
“This idea that somehow I created a shell company, it’s just bogus,” Bundy told The Idaho Statesman by phone Wednesday.
The documents submitted by St. Luke’s indicate that Aaron Welling, the treasurer of Bundy’s gubernatorial campaign and a man Bundy has called his “longtime friend,” set up several limited liability companies nearly a year ago. These include White Barn Enterprises LLC, Farmhouse Holdings LLC and Potters Construction FHB LLC. All three companies were set up on July 20, 2022, according to the Idaho and Wyoming secretary of state offices.
Farmhouse Holdings is listed as the governor of White Barn and Potters. Farmhouse is a Wyoming LLC that lists Prime Corporate Services as its organizer.
Property transfer and emails raise questions, St. Luke’s says
In early December, Bundy paid $5,404 to remove a lien when he transferred his home and property to White Barn Enterprises, according to Stidham. The lien had been placed through a judge’s Writ of Execution for Bundy’s failure to pay St. Luke’s attorney fees after he was ordered to do so for not showing up in court in response to the lawsuit.
White Barn is the current owner of that property, according to the Gem County assessor’s website. Zillow estimates the value to be $1.2 million.
Bundy said he “legitimately sold (his) home to a friend.” He said he still lives there with his family and pays about $2,680 monthly in rent.
Operating agreements for White Barn and Farmhouse list Welling as a manager of the companies. The IRS addressed letters to the company as “White Barn Enterprises LLC Aaron K Welling Sole MBR” and “Farmhouse Holdings LLC Aaron K Welling Sole MBR” that identify him as the sole member of the companies.
Bundy said Welling managed only his campaign money last year.
Court documents filed by St. Luke’s showed emails between Welling and advisers of Prime Corporate Services from Dec. 13-14, 2022, with the subject line “Where to move current assets.” Prime Corporate is a Utah company that helps customers form LLCs and other corporations, according to its website.
“I am sure you explained it to me but I can not recall and my office is ready to move all the existing assets for current business to new LLCs,” Welling emailed Prime Corporate Services. “Are we moving the assets to White Barn Enterprise or Farm House Holdings?”
In one email, a senior corporate adviser named a third LLC called Potters Construction FHB LLC as a subsidiary of Farmhouse and told Welling that he could move assets to either corporation. The similarly named Potter’s Construction Fine Homes and Barns LLC was an Idaho listing that had Welling as its manager before it recently became inactive, according to the Idaho secretary of state’s office.
“I understand I can move them to either one, the question was why did I set up the holding company, there must have been a strategy,” Welling responded. “Was it to use the holding company to hold all assets, and the other LLCs to conduct business?”
The Prime Corporate Services adviser explained to Welling that the LLCs would allow the owner of the companies to remain anonymous.
“The WY Holding Company is for anonymity and privatization,” the adviser said. “People can’t see you as the member on your LLC in WY or your mailing address. The Trust has beneficial ownership in the WY LLC, that way everything that the WY LLC has as a subsidiary can now roll up in the Trust and avoid probate.”
Cowboy Cocktail: Wyoming has strict privacy rules
Wyoming is so well-known for the privacy its laws give business owners that the act of setting up LLCs and trusts there has been given a name: Cowboy Cocktail. International elites from Russian billionaire Igor Makarov to Dominican Republic dictator Rafael Trujillo have been known to benefit from this strategy, according to The Washington Post.
“The cocktail and variations of it — consisting of a Wyoming trust and layers of private companies with concealed ownership — allow the world’s wealthy to move and spend money in extraordinary secrecy, protected by some of the strongest privacy laws in the country and, in some cases, without even the cursory oversight performed by regulators in other states,” the Post reported.
Stidham said that if Bundy did transfer his assets to Wyoming LLCs, those actions should be considered fraudulent conveyances, which occurs when someone transfers assets “for the express purpose of putting it beyond the reach of a known creditor,” according to the Cornell Legal Information Institute.
Stidham said the plaintiffs still do not know how much money Bundy or his People’s Rights Network have.
The Southern Poverty Law Center reported Wednesday that “a single benefactor made cryptocurrency donations worth more than $216,000 to extremists and hate groups between September 2021 and April 2022.” The People’s Rights Network received cryptocurrency transfers worth $93,000, the largest amount of any group.
St. Luke’s plans to keep pushing on Bundy
Bundy has not appeared at any of the hearings involving St. Luke’s lawsuit. Despite this, he recently filed a petition to get the case transferred to federal court. Fourth District Judge Lynn Norton issued a default judgment against him on April 24, meaning that because the defense failed to participate in the litigation, the plaintiff’s allegations would be taken as true and the court would move to the next step in the legal process — determining damages.
In conjunction with that judgment, the judge issued an order compelling Bundy to sit for a deposition and respond to St. Luke’s requests for discovery.
Bundy defied that order by not appearing for a court hearing Wednesday morning and not filing discovery responses by Monday, so Stidham said he planned to file a motion to move forward with a hearing to award damages to St. Luke’s. In court documents, the attorney argued that delaying could give Bundy more opportunity to transfer assets.
Rodriguez also has not responded in court or participated in the case.
“Given that Mr. Bundy and Mr. Rodriguez continue to violate court orders relating to document production and depositions, St. Luke’s will be filing motions to have defendants defaulted and to have evidentiary sanctions and adverse inferences imposed during the damages trial,” Stidham told the Statesman in an email.
The families of the victims in the Sandy Hook Elementary School shooting in Connecticut used a similar default strategy when Infowars conspiracy theorist Alex Jones refused to comply with court orders in a lawsuit against him. Jones eventually faced a damages hearing after the default and was ordered to pay close to $1.5 billion.
Jones consistently had claimed that the school shooting, which left 26 people dead, including 20 children, was a hoax.
Coincidentally, Jones now faces a new lawsuit claiming that he hid millions of dollars of assets in an effort to avoid paying damages.