BILLINGS – A California company’s bid to take over an empty jail in rural Montana appears to be unraveling, with an attorney involved in the project cutting ties Friday and a second company, once named as a subcontractor, denying any involvement.
Those moves followed revelations earlier in the week that Michael Hilton — the lead figure of the company, American Police Force — is a convicted felon with a history of fraud and failed business dealings in California.
“We met with him and he asked us if we can support him,” said Edward Angelino, chief executive of Allied Defense Systems, an Irvine, Calif.-based defense contractor. “We checked his background, we checked his company. He’s not an adequate person to do business with.”
American Police Force reached a deal last month with officials in Hardin to operate the city’s jail. The facility has never held an inmate since its 2007 completion.
Hilton pledged to open the jail by early next year and bring more than 200 new jobs to the struggling community, located in southeastern Montana on the border of the Crow Indian Reservation.
Hilton also said he would build a $17 million military training center in the city.
Citing concerns over the legitimacy of American Police Force, the Montana attorney general’s office on Thursday launched an investigation into the company. That included a demand for documents supporting Hilton’s claim that he’s backed by a major security corporation wishing to remain anonymous.
American Police Force spokeswoman Becky Shay insisted Friday that the jail takeover remained on track. She said a job fair for prospective employees would still be held during the week of Oct. 12.
Hilton returned to California earlier this week after spending several days in Hardin. He intends to return for the job fair, Shay said.
City economic development officials and the company have agreed on the jail contract, but it hasn’t been ratified by US Bank. The bank has a stake as trustee for $27 million in construction bonds used to pay for the 464-bed facility.
No money has changed hands between Hardin and American Police Force. Hardin Mayor Ron Adams said Friday that despite his reservations about the project, he would still like to see it go forward so the jail can be filled.
Rumors continued to circulate in Hardin and on the Internet that American Police Force was backed by an unknown government agency with plans to use the jail as a detention or training center for foreign combatants.
Those rumors have been fueled by Hardin’s earlier efforts to bring in terrorism detainees from Guantanamo Bay, Cuba.
Montana Gov. Brian Schweitzer on Friday dismissed the notion of any secretive government scheme.
“I think a low-level card shark is not going to rise to the level to get some kind of government defense contract,” the governor said.
Hilton had claimed Allied Defense Systems would provide the uniforms for guards at the jail. On Sept. 30, an attorney for the Irvine company sent a letter to Hilton threatening a lawsuit over the use of the company’s name.
Meanwhile, Maziar Mafi, a lawyer from Santa Ana, Calif., who served as the legal affairs director for American Police Force, said he wanted to see the project begin to move forward before he could continue his involvement.
“For the time, I’m pulling out,” Mafi said. “I need to see more concrete action before I can be involved.”
Shay said she was unaware of the move by Allied Defense Systems and had not spoken with Mafi directly.
Mafi’s involvement began last month — about the same time Hilton reached a contract agreement with Greg Smith of Hardin’s Two Rivers Authority, which owns the jail.
Smith has since been placed on paid leave from the quasi-public agency. And now, with Mafi’s departure, a jail critic said the project appeared doomed to failure.
“He sees the ship is going down,” said Alex Friedmann with the Private Corrections Institute, a group that has long been critical of Hardin for building a jail that would be privately run.
Hilton, who claims an extensive military background and uses the title “captain,” initially described Mafi as a “major” in American Police Force. He later said Mafi was the company’s president — although Mafi denied the role and said he had no military or security background.
Mafi guaranteed the Sept. 10 purchase of two Mercedes SUVs by Hilton as part of his plans for the jail. They were among three Mercedes that Hilton brought to Montana last week, saying he intended to turn over to Hardin for use by law enforcement.
A financing payment on at least one of the vehicles is now overdue.
Only one Mercedes remains in Montana. It’s being driven by company spokeswoman Shay, who said Friday that she intends to register it soon.
Shay quit her job with the Billings Gazette to work for Hilton. She said Friday that she remained comfortable with that decision, and that Hilton told her before she was hired about his criminal record and several civil judgments against him totaling more than $1.1 million.
Those judgments remain outstanding.
“A lot of people that know me, know about me have asked me if I’ve been duped,” Shay said. “No.”