Gold Diggers of '97

The TV star, the fortune-teller, the gun-toting miner and Captain Ecology: Meet the loopy cast of characters feuding over a tiny Colorado gold mine.

"He took me in the kitchen and said, 'Sasha, if you ever say I said this, I'll deny it. The one who gets the short end of the stick and is hurt the most will be you. You don't deserve it--that's all I can say.'"

White says she moved out of the house on Willowbrook Drive in May but didn't understand what Tatman meant until she went back to the house to retrieve her belongings. At that point, she says, Tatman called the police and told them she'd broken into the house.

"It was then I knew I was being framed," she claims. White says she feared for her personal safety in Boulder and soon decided to return to Texas, where she now lives.

Since White left town, almost everyone who had anything to do with the Mogul Tunnel Mine has been caught up in a blizzard of litigation. The lawsuits have overtaken the mine like a winter whiteout, and no end is in sight.

The legal wrangling began in early 1994, when Durango Metals sued Rugg for allegedly driving away an investor that wanted to put $5 million into Durango. That investor was COM Inc., the company headed up by Tatman. Durango's main piece of evidence was a conversation Rugg had with Tatman in which he supposedly told him Hartley was stealing ore from the mine. Rugg charges that Hartley and Tatman cooked up the COM Inc. investment purely in order to sue him, hoping he'd be forced to sell the mine to them at a firesale price.

Rugg countersued and presented as evidence internal Durango computer records that Sasha White had turned over to his lawyer after her split with Tatman. The case was eventually settled out of court when Durango agreed to sell its rights to use Rugg's tunnel to another company, Island Investments, which also got control of the Gold Hill Mill as part of the deal.

In June 1995 Durango was sued by three Los Angeles investors who'd poured money into the Mogul project. The trio of angry Californians told the court they needed to see Durango's books to "prevent Hartley from transferring, misappropriating, converting, and concealing corporate property and funds for his own purpose rather than for legitimate corporate business." That lawsuit was dismissed on technical grounds, says plaintiff Daniel Cohen. "The bottom line was that we didn't get access to the books," adds Cohen, who estimates that between $2 million and $5 million was put into Durango by investors like himself.

In 1996 Island Investments turned around and sued Durango, Hartley and Tatman for breach of contract, claiming that when it took over the Gold Hill Mill, the facility had been virtually looted. That same year Durango also became embroiled in a legal battle over a mine it leased in Clear Creek County.

In a final legal blast, Durango sued Rugg again last year, alleging that the retired miner was preventing the company from gaining access to claims it still owns inside the mine. Durango also says Rugg misled the company about what claims he owns inside the mine, a charge Rugg emphatically denies. That suit is still pending.

Hartley now asserts that Rugg never really owned the Mogul tunnel at all. He says the original owner of the tunnel never sold it and that the Rugg family simply assumed control of it in the 1920s. "He's never owned the tunnel or the land in front of it," insists Hartley.

But Rugg says his grandfather acquired the tunnel in 1925 after the original owners dropped their claim to the Mogul. His grandfather ran advertisements to see if anybody else had claims to the tunnel, says Rugg, and was awarded title to it in Boulder County District Court that year. Rugg's lawyer acknowledges that another family owns ten square feet directly in front of the tunnel entrance but says there is no question as to who owns the Mogul tunnel.

"Mr. Rugg has had uninterrupted possession through his mother, father and aunt since the 1920s," says attorney Thomas Morris.

The most recent humiliation for Durango came at the hands of the IRS. The feds seized a Skyhawk A-4B attack jet owned by the company in Texas. Durango acquired the jet three years ago in a stock swap with a Texas investor, who apparently traded the aircraft for shares in the Mogul venture. The IRS says Durango owes $120,000 in delinquent payroll taxes and is asking for a $170,000 minimum bid on the "bantam bomber," which is capable of traveling at 645 miles per hour.

After constant urging by Maher, whose lawsuit against Durango is expected to go to trial sometime next year, the federal Securities and Exchange Commission also investigated the company's operations. Several people contacted for this story, including Hartley, say they have been interviewed by SEC investigators. But the federal agency has taken no action against the firm, which Hartley says proves it did nothing wrong. A spokesman for the SEC declines to comment.

Despite Durango's controversial history, some investors still believe in the company's potential. They say shareholders like Maher are simply pulling down a good company by filing suit.

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