Calif. jail entrepreneur has checkered past
By Matthew Brown
BILLINGS, Mont. — Michael Hilton showed up in Hardin, Mont., last week, presenting himself as an economic savior, the man who would take over the town's $27 million jail - empty since it was built as a development project in 2007 - and provide 200 new jobs in the process.
He wore a military style uniform, and as a gesture to local law enforcement offered up the use of three Mercedes SUVs.
But the man who styles himself as a military veteran turned private sector entrepreneur and a California defense contractor with extensive government contracts also has another image, and that one is provided by public documents and interviews with associates and legal adversaries.
The record says that he is a convicted felon with a number of aliases, a string of legal judgments against him, two bankruptcies and a decades-long reputation for deals gone bad.
American Police Force is the company Hilton formed in March to take over the Hardin jail.
"Such schemes you cannot believe," said Joseph Carella, an Orange County, Calif. doctor and co-defendant with Hilton in a real estate fraud case that resulted in a civil judgment against Hilton and several others.
"The guy's brilliant. If he had been able to do honest work, he probably would have been a gazillionaire," Carella said.
Court documents show Hilton has outstanding judgments against him in three civil cases totaling more than $1.1 million.
As for Hilton's military expertise, including his claim to have advised forces in Iraq and Afghanistan, those interviewed knew of no such feats. Instead, Hilton was described alternately by those who know him as an arts dealer, cook, restaurant owner, land developer, loan broker and car salesman - always with a moneymaking scheme in the works.
Hilton did not return several calls seeking comment. American Police Force attorney Maziar Mafi referred questions to company spokeswoman Becky Shay.
When asked about court records detailing Hilton's past, Shay replied, "The documents speak for themselves. If anyone has found public documents, the documents are what they are."
Shay declined comment on Hilton's military experience.
Al Peterson, vice president of Hardin's Two Rivers Authority, which built the jail, declined to comment on Hilton's legal troubles. He refused to say if he knew about Hilton's past when the authority reached a 10-year agreement with American Police Force last month.
The deal is worth more than $2.6 million a year, according to city leaders.
Hilton has also pledged to build a $17 million military and law enforcement training center. And he's promised to dispatch security to patrol Hardin's streets, build an animal shelter and a homeless shelter and offer free health care to city resident's out of the jail's clinic.
Those additional promises were not included in the jail agreement, which remains in limbo because US Bank has so far declined to sign off on the contract. The bank is the trustee for the bonds used to fund the jail.
A US Bank spokeswoman declined to comment, but Peterson was adamant the deal would be approved.
"It's a solid deal. That's all I'll say," he said.
But a representative of a corrections advocacy group that has been critical of Hardin's jail and has investigated Hilton's past said city leaders dropped the ball.
"I'm amazed that city officials didn't do basic research that would have raised significant questions about American Private Police Force and Mr. Hilton's background," said Alex Friedmann, vice president of the Private Corrections Institute.
Hilton, 55, uses the title "captain" when introducing himself and on his business cards. But he acknowledged it was not a military rank.
He said he is naturalized U.S. citizen and native of Montenegro. Aliases for Hilton that appear in court documents include Miodrag Dokovich, Michael Hamilton, Hristian Djokich and Michael Djokovich.
One attorney who dealt with Hilton in a fraud lawsuit referred to him as a "chameleon" and he has a reputation for winning people over with his charm.
His criminal record goes back to at least 1988, when Hilton was arrested in Santa Ana, Calif. for writing bad checks.
Beginning in 1993, Hilton spent six years in prison in California on a dozen counts of grand theft and other charges including illegal diversion of construction funds.
The charges included stealing $20,000 in a real estate swindle in which Hilton convinced an associate to give him a deed on property in Long Beach, Calif., ostensibly as collateral on a loan. Hilton turned around and sold the property to another party but was caught when the buyer contacted the original owner.
After his release, he got entangled in at least three civil lawsuits alleging fraud or misrepresentation. Those included luring investors to sink money into gold and silver collectible coins; posing as a fine arts dealer in Utah in order to convince a couple to give him a $100,000 silver statue; and, in the case involving co-defendant Carella, seeking investors for an assisted living complex in Southern California that was never built.
Carella said he was duped into becoming a partner in the development project and that Hilton used Carella's status as a physician to lure others into the scheme. He was described in court testimony as a "pawn" used by Hilton to lure investors.
Those involved with Hilton say he is an accomplished cook with a flair for the extravagant - wining and dining potential partners, showing up at the Utah couple's house to negotiate for the silver statue in a chauffeur-driven Mercedes.
"This is the way we got taken," said Carolyn Call of Provo, Utah, who said she gave Hilton her family's silver statue to sell on the open market.
According to court documents, Hilton turned around and gave the statue to an attorney to pay for his services.
Two California attorneys said Wednesday that after learning of Hilton's latest activities they planned to follow him to Montana to seek payment on the outstanding judgments against him.
"Once I know that there is an asset or some sort of funds to go after, we'll go after it," said Call's attorney, Roger Naghash.
Associated Press writers Amy Taxin in Santa Ana and Greg Risling in Los Angeles and researcher Barbara Sambriski in New York contributed to this story.