Legal papers were recorded in Wasco County this week forbidding the sale of a vineyard property once owned by a man now facing securities fraud charges.
The state-of-the-art vineyard, once on track to be Oregon’s largest, was the joint vision of Canadian investor John Babikian and James Martin, owner of Copa di Vino in The Dalles.
But its future is now uncertain as Babikian was sued March 13 by the U.S. Securities and Exchange Commission, which accused him of bilking investors of $1.9 million in a penny stock “pump and dump” scheme.
He’s accused of secretly buying massive amounts of the stock, then heavily promoting it via his website, which had 700,000 email subscribers, and selling his shares when the price spiked. He made $1.9 million in 90 minutes.
The next step in that court case was the recording with the Wasco County Clerk’s Office on Monday, March 24 of a prejudgment writ of attachment. The same notice was physically posted by the Wasco County Sheriff’s Office at the vineyard itself, at 4455 Emerson Loop Road, on Friday, March 21.
But Martin said Wednesday night he has yet to receive any notice about the matter. “We had a sheriff deputy come by but we’re not being served, so…” he said. “I don’t know anything yet. This is all between the courts and John Babikian.”
Babikian first heard about Martin when Martin appeared on the TV show “Shark Tank,“ in 2011, where he was seeking investment in his Copa di Vino, or “wine in a cup,” venture.
Babikian spent some $5 million to forge 110 acres of vineyard out of the former dryland wheat acreage, which he bought for $2 million from Jack Hay in April 2012. He bought 480 acres in all.
Martin serves as the developer of the vineyard.
Last fall, Babikian stopped paying the bills or answering his phone, Martin said earlier. Around that time, Babikian’s now ex-wife filed for divorce, alleging criminal financial activity by him in her divorce papers. Canadian authorities were seeking $4.2 million in unpaid taxes from him.
Canadian and U.S. securities authorities were probing how he made his money. News outlets estimated the 26-year-old Babikian was worth $100 million.
A Bloomberg News analysis of the 39 stocks promoted by his website over a five-year period estimated he increased the value of those stocks by $3 billion. Investor circles had long wondered who the person was behind the promotion website, which Babikian closed last year.
Now, with Babikian’s largesse gone, Martin said he is financing maintenance of the vineyard out of his own pocket.
Martin said the vineyard is “a pretty amazing project still, even with everything that’s going on.”
The writ of attachment, which was signed by a federal District Court judge in New York on March 13, is a notice that the federal government is making a claim on the vineyard property, along with two homes Babikian owns in Los Angeles.
All three of the targeted properties were in the ownership of “alter ego” companies owned or controlled by Babikian, the SEC lawsuit alleges. The vineyard was owned by Middlebay Trade Ltd.
The land briefly came into Martin’s company’s ownership for six weeks late last year. He said he did it in order to secure a loan to pay bills. But he transferred two of the three parcels back to Babikian, who sold them on to a new company in January.
Deeds recorded in the courthouse say the vineyard sold Jan. 21 for $2 million to a recently created Hong Kong entity, First Power Enterprises, LLC.
The deed states that tax statements for the Hong Kong entity be mailed to 901 E. 2nd St., the office of Copa di Vino.
Martin said he’s met twice with the new owners of the property.
Babikian’s whereabouts are now unknown, paperwork from the sheriff’s office includes a notation that it had heard “a rumor” that Babikian now lived in France. “It is unknown whether this information is true,” the affidavit of service stated.
On Tuesday, March 25, Scott Elder, a neighboring vineyard owner who has a shared road with part of the Babikian vineyard property, called the sheriff’s office at 3:22 p.m. to report a lock on the gate across the shared road had been cut off.
Elder said the vineyard manager texted him and asked if he’d locked the gate. Elder called him to say he had. “He said he was going to cut it off and I said, ‘If you do, I’m going to call the sheriff,’” Elder said.
Later, when Elder texted the vineyard manager, saying, “I heard you cut the lock,” the manager said he hadn’t, Elder said, and had been on a different vineyard property all day, working with a pruning crew.
After a deputy consulted with the district attorney, Elder was told by the deputy that it was a property dispute and would have to be handled civilly.