Gold Diggers of '97
Charles "Binx" Rugg looks out his living-room window in the town of Eldora and can see all the places that have shaped his life.
Next door is the small, one-story wooden house where he was born 78 years ago. On the other side of the narrow valley are the stables where his daughter, Cindy, keeps the family's horses. Just down the road are the buildings his father and grandfather helped put up years ago, when he and his family were the only people who stayed in tiny Eldora year-round.
But Rugg, a retired miner, stares most intently at the all-but-abandoned Mogul Tunnel Mine just across the valley. A pile of rocks and rusty mining implements marks the entrance to the gold mine, a forlorn reminder of Eldora's mining heritage. The tunnel leading into the Mogul has been owned by Rugg's family since the 1920s, and he dreams of seeing the mine reopen, producing carts of rich ore and putting dozens of miners back to work.
The Mogul was still a working mine in the 1940s, when Rugg went off to fight the Nazis in Europe and North Africa. When he returned, he found that the tunnel had been stripped, its railroad tracks and ore cars melted down as part of the war effort. "They even tore the flumes up and sold the boards," he says.
Rugg found work in the tungsten mines around Nederland, but because of the unstable nature of mining, he eventually took a job as a maintenance man for the Boulder Valley school district. But he never forgot the Mogul, which sat deserted at the edge of town. "We're gonna open it up someday," he vows, his brown eyes flashing.
Over the years, Rugg has seen his share of schemers drawn by the lure of gold in the hills west of Nederland. In the 1930s, he says, a woman known as "Mrs. Goodykoontz," flanked by a black chauffeur and a Japanese cook, pulled into Eldora in a Pierce-Arrow limousine. Rugg's grandfather, W.T. Harpell, leased her the Mogul, and she set about expanding the mine, employing miners and surveyors and even remodeling a cabin to serve as a garage for the limo before abruptly blowing town when the miners started grumbling about not being paid.
In the past few years, though, Rugg's dream of reopening the mine has brought a cast of characters into his life who rival anything seen in Eldora's gold rush days. They include a man who promoted the mine as an "environmentally conscious" venture and then, says Rugg, proceeded to threaten him with a .357 Magnum; another high-flying mine promoter who recently had his surplus military attack jet confiscated by the Internal Revenue Service; a New Jersey dentist who dressed in green tights and a mask and called himself "Captain Ecology"; and the gun-toting promoter's former fiancee, a new-age fortune teller whom he now accuses of having an affair with the dentist. To top it off, there's Dennis Weaver, the Ridgway TV star and environmentalist who had his own brief flirtation with the "environmental mining" scheme.
All of this seems like heady stuff to an old miner who lives in a log cabin he built 35 years ago and keeps two goats in a pen in his front yard. Rugg remembers the days when mining deals were settled with a handshake and any self-respecting miner who thought he'd been scammed would use his fists before marching into the courthouse with a legion of attorneys. "When I was a little kid, if you was dishonest, they'd drop you down a shaft," he says.
Today, however, Eldora's solitude has been disrupted by outsiders who know little of old-fashioned virtues. The Mogul mine hasn't produced much gold since the '40s. But thanks to a flurry of lawsuits and angry accusations, it continues to line the pockets of lawyers.
Rugg says the trouble started in 1992, when he leased the right to use the mine to a company called Durango Metals, Inc. He now believes that Durango president Tim Hartley and his partner in promotion, Wayne Tatman, the former owner of the Gold Hill Mill, never really intended to dig for gold. Instead, Rugg has claimed in court, the men set out to steal his mine by driving him into bankruptcy with harassing lawsuits.
Tatman has since left the country. Hartley, who still lives in Boulder, strongly denies that he and his former associate did anything wrong and has filed his own suit against Rugg in Boulder County District Court. But he and Tatman have also landed on the bad side of one of their biggest investors--the New Jersey dentist, Bill Maher, who sunk $200,000 into the project and is now suing them in U.S. District Court.
Rugg says that after a confrontation with Tatman in 1994, he began sleeping with a loaded pistol at his side. The encounter left him shaken, and he says he still can't believe the code of honor he remembers miners once following could mean so little today.
"I never dreamed a miner could be a crook," says Rugg.
Dennis Weaver hasn't forgotten the day in 1994 that he drove up to the town of Gold Hill with Wayne Tatman. The charming promoter headed up a company called COM Inc. that was running an ore-processing mill in the mountain community. More important, Tatman was engaged to a close friend of Weaver's, Boulder environmental activist and sometime numerologist Sasha White, who had arranged for the two men to meet.
Weaver, the star of television's McCloud series in the 1970s, was looking for backers for his Ridgway-based Ecolonomics Institute, an environmental think tank that attempts to find ways to create ecology-friendly industries. White told him that Tatman planned to pioneer ecological methods of mining and milling and that he had enough money to help fund the institute.
"Sasha called me up one day and said, 'I've got a person who could fund what we're doing,'" recalls Weaver. "He came over to the house driving an old Lincoln. I thought, 'If this guy has the money he claims, why isn't he driving something better?'"
Despite his misgivings, Weaver says he thought Tatman might be able to support the fledgling institute and met again with the promoter during a visit to Boulder later that year. "He talks a lot and says what he thinks you want to hear," Weaver says of Tatman. "One time we were driving through Gold Hill, and he was explaining to me how he was going to build his home on top of the mountain and he'd build an elevator from the mine shaft and it would serve the house."
Tatman went on to describe other big plans, including a multi-million-dollar educational facility and tourist attraction that would turn Gold Hill into an ecological theme park. Weaver says he was skeptical but still thought the promoter might be a source of funding for the Ecolonomics Institute. He even agreed to put Tatman on the institute's board, but Tatman never came through with any cash. "He made a lot of promises about how much money he was going to give the institute, but he never did anything," says Weaver.
Despite Weaver's misgivings about the Mogul project, Tatman was able to use the actor's Hollywood pedigree to impress at least one investor in the mine. Bill Maher met Weaver and got the star's autograph during a gathering at Tatman's Boulder home in October 1994, a few months before he bought his first shares in Durango Metals. Maher also considers himself an environmentalist, and he says he was eager to meet Weaver. The dentist had visited Ridgway earlier that year and had his picture taken outside the Earthship--a structure Weaver put up made of recycled tires--in his Captain Ecology suit, a green outfit that Maher wears on occasion when he plays a new-age caped crusader.
Like Weaver, Maher had been brought into Tatman's orbit by Sasha White, who says she began touting the Mogul project after Tatman promised her a finder's fee for lining up investors. A friend in California put the dentist in touch with White when he complained about the performance of his investments. "I was pissing and moaning about stocks and bonds and what I was going to do for the future," Maher says. "My friend said, 'I just got some material about an investment in Colorado.'"
Just a few days before the meeting with Weaver, Maher says Tatman took him on a tour of the Gold Hill Mill. At the time, ore from the Mogul was being processed in Gold Hill, and Maher says Tatman presented himself as an experienced miner who had recently sold a gold mine he had developed in Nevada for $50 million. There were three or four miners doing exploratory work in the Mogul when the dentist visited--"just enough miners to make it look legitimate," he says.
Maher says he was charmed by Tatman's vision of "environmentally sensitive" mining--rhetoric perfectly suited to an environmentalist looking for a lucrative investment. He told Tatman he was very interested in the Mogul Tunnel project.
What Maher didn't know was that Tatman had a record of promoting mines all over the western U.S.--and a history of leaving behind angry owners, investors and government officials.
Before he showed up in Colorado in the early 1990s, Tatman spent ten years doing business in Winnemucca, Nevada. In 1980 he leased several claims to the Alma mine from Lee York, a local man who soon found himself fighting Tatman both inside and outside the courtroom.
For years York was involved in litigation over the mine with Tatman, whom he calls "Tat Rat." York says Tatman claimed he owned the mine, and then sued York for defamation when he started telling people about his experience with the promoter. The two men didn't confine their dispute to the courthouse; according to York, in 1988 Tatman tried to run him over with a four-wheel-drive vehicle. At one point York--who claims that Tatman ran the mine from an office in a local bordello--says he even exchanged blows with his adversary.
"I invited him up to a meeting, and the bastard was dumb enough to come," he says. "I asked him, 'Who owns the Alma?' and he said, 'I do,' so I knocked him off the stool. He pulled his pants up to go for the pistol he kept in his boot, so I pulled my shotgun on him and walked over and knocked him over with the barrel of the shotgun."
Tatman had disputes with others in Nevada as well. After the federal Bureau of Land Management cited him for failing to clean up an abandoned mine site, Tatman wrote to the agency complaining that he was the target of a "vendetta" because his dog, Buffy, had defeated a BLM agent's dog in a Humane Society pet show.
Authorities in Oregon and Washington were already familiar with Tatman by the time he started mixing it up with Nevada officials. In 1984 in Douglas County, Oregon, Tatman was cited for operating a mine without a permit by state authorities, and according to a story in the local newspaper, mining inspectors were told not to visit the mine without an armed escort after Tatman was seen brandishing an Uzi machine gun. In Washington, a mine Tatman promoted was added to the federal Superfund environmental cleanup list in 1984 after toxic wastes leaked out of a containment pond.
Tatman's attention apparently began to turn to Colorado in 1990. That year he allegedly convinced an elderly Grand Junction woman to hire him and an associate named "Sparky" to prospect her mining claims in the Canadian Yukon by using an electronic "black box" that he claimed had the magical ability to find gold underground.
The woman, who still lives in Grand Junction but asks not to be identified, says Tatman took her and her late brother to a ranch near Colorado Springs to demonstrate the effectiveness of the black box. "We watched him come up with a big deposit of gold," she says.
After that, she says she gave Tatman and "Sparky" $10,000 to pay for a trip to the Yukon. She says she eventually gave Tatman more than $50,000 before deciding she'd been scammed. "He was very slick," she says. "He works on a person's ideas and desires. It's a wonder he hasn't been in jail."
After Tatman disappeared with her money, the Grand Junction woman says she got a call from the Royal Canadian Mounted Police inquiring as to the promoter's whereabouts. "They said he pulled a gun on a government inspector," she recalls. "They said, 'If he comes back here, we'll get him.'"
A spokesman for the Mounties in the Yukon territorial capital of Whitehorse confirms that his agency has investigated Tatman but refuses to provide details of the probe or to say whether the RCMP is looking for him. However, the Grand Junction woman says she doesn't expect to see Tatman--or the money she gave him--ever again. Her voice rises in anger as she reflects on her experience with the salesman. "If there's a God in heaven," she says, "Tatman will be destitute one day and have to scratch a living out of the dirt."
Tatman hasn't been reduced to living off the land, but he has apparently left the country.
For now, he's reportedly staying out of the way of his adversaries in the copper-mining regions of northern Mexico. Court documents recently filed by Tatman are signed by a Mexican notary.
According to Tim Hartley, his former business associate "went broke and left the country." Hartley denies all of Maher's allegations against Durango Metals and says he and Tatman are being persecuted by a vengeful investor with deep pockets.
"We have a bunch of little people being stomped on by some wealthy people trying to take away some rich ore bodies," says Hartley. "Durango is a small company, and we're struggling to save those properties for our shareholders."
Hartley says Durango has so little money that it's hardly able to pay its legal bills--quite a problem, since he acknowledges that the company is currently involved in seven lawsuits.
Court records indicate that Durango has gone through five attorneys in the last few years. According to Rugg and others, at one point a former Hartley lawyer asked the court to release him from representing Hartley because he hadn't been paid. When the judge refused, the lawyer burst into tears, astonishing everyone in the courtroom.
"It was a very remarkable occurrence," says Thomas Morris, Rugg's attorney.
Hartley, however, says Rugg and his other adversaries are simply using the court system to bankrupt him--the same claim that Rugg makes about him. "We keep running out of money," Hartley says. "It's been an effective legal strategy for them."
But those who've been involved in litigation with Durango, including Rugg and Maher, say they've had to dig deep into their own pockets to prevent themselves from being ripped off.
"Their strategy is to lease a mine from somebody who's pretty poor, sue them, run them into the ground, and then hope they get the mine," says Maher, who has hired former U.S. Attorney Mike Norton to press his case.
Hartley now says that he had little to do with Tatman other than contracting for Durango's ore to be processed at the Gold Hill Mill. But Maher and others say Tatman's company, COM Inc., was virtually joined at the hip with Durango. In documents filed in federal court, Maher insists that most of his dealings with Durango were handled by Wayne Tatman, beginning in October 1994.
"My first contact was with Wayne," says Maher. "I got to Boulder and called Sasha White, and about half an hour later, Wayne came and picked me up and showed me the Gold Hill Mill. He told me he knew Dennis Weaver and that he was coming to town."
In other court pleadings, Maher says he bought his first 100,000 shares of Durango stock for $40,000 in February 1995, after being told by Tatman that the mine had already produced sixteen tons of gold-laden ore and that the company would soon begin paying dividends to its shareholders. The next month he wrote a check to Durango for $160,000 and was given a stock certificate for 500,000 shares. In the next few months, Maher says, he started to suspect something was amiss. The promised dividends never showed up, and he learned that Durango had sued Rugg, who owned the tunnel the company used to get to its claims.
There were other problems that Maher didn't know about. In January 1995, one month before Maher made his down payment, the state's Mined Land Reclamation Board had issued a cease-and-desist order against the "environmentally conscious" Gold Hill Mill for not properly containing its mine tailings. The mill shut down as ordered, but state officials say that after a heavy snowfall in the spring of 1995, 10,000 cubic feet of tailings from the mill overflowed into Cash Gulch, a tributary of Boulder Creek.
Maher grew even more uncertain about his investment when he learned that Wayne Tatman had broken off his engagement to Sasha White, the rainmaker who'd brought Maher into the picture in the first place. Hartley says the reason for that is simple. He claims Maher's lawsuit is part of a romantic vendetta--Maher and White became lovers, he says, and have conspired against her former fiance. "Wayne Tatman caught Sasha White in an embarrassing position with Bill Maher one night," Hartley says, a charge he has repeated in court documents.
Both Maher and White call the allegation that they were lovers ridiculous and say that it's part of a strategy by Hartley and Tatman to pin all the blame for Durango's problems on White. "It's completely drummed-up bullshit," says Maher.
Rugg agrees and says he thinks White's reputation may be another victim of the Mogul Tunnel fiasco. "They're just trying to ruin her by saying she was sleeping with everybody who wanted to buy stock," says Rugg.
Sasha White says the only thing she did wrong was to fall in love with the wrong guy.
A Texas-born blonde who speaks with a Southern drawl, White lived for several years in Boulder, where she became known for her environmental activism. She organized several conferences on the environment, which is how she befriended Dennis Weaver.
But she says she hooked up with Wayne Tatman entirely by accident in 1993, when she was working as a telemarketer for Great Expectations, a Denver dating service. Tatman had stopped by a Great Expectations booth at the National Western Stock Show and filled out a card expressing an interest in the service.
While Tatman resisted joining, he took the opportunity to befriend White, striking up a conversation with her and asking about her interests. She says she told him she was an environmental activist and that he immediately began talking about his plans to do environmentally sensitive mining in the Colorado mountains. After she told him of her interest in numerology, he asked her to do a reading for him.
"We met, and he immediately began courting me and making promises," recalls White. "It was the biggest bunch of lines I've ever heard. He said he'd make me the happiest woman in the world."
Nevertheless, White soon found herself falling for a man who was unlike any other she'd been involved with. She describes him as a rugged-looking mountain man who fancied cowboy hats and rawhide jackets. "He drank a lot of beer," she adds. "He didn't care a hoot what he looked like or about taking showers. He'd go for several days without shaving."
But Tatman's seeming passion for the earth was highly attractive to White. "He'd talk to me about his gold mine and doing it in an environmental way and cleaning up the messes left behind by other miners," she says. "That was music to my ears."
Soon Tatman was sharing a home with White on Willowbrook Drive in Boulder. In the summer of 1994, White says, she became involved in Tatman's business ventures after he offered her a 10 percent finder's fee for attracting investors to Durango Metals. She says Tatman also told her he'd donate $1 per ton of ore processed at the Gold Hill Mill to her environmental campaign and $1 per ton to Dennis Weaver's institute.
White began typing up documents for Durango. She says Tatman and Hartley would meet privately in the home, excluding her from their business meetings. "They never let me go on any of the tours or into their meetings," she says. "Now I know why. It's because they didn't want me to know about their lies."
But Hartley scoffs at White's description of herself as an innocent victim. He claims that White, not he or Tatman, was the mastermind behind Maher's $200,000 investment in Durango Metals and accuses her of forging the promotional material that Durango used to entice Maher to invest. That material has since been submitted as evidence in the dentist's lawsuit.
In court documents, Hartley also claims that White approached him in 1995 and asked him "to pay, on behalf of Tatman, a half-million dollar palimony settlement. In exchange, White allegedly said that she would block Maher from filing a lawsuit against the defendants."
All of which is so much bosh, says White. She says she is being set up as the "fall guy" by Hartley and her former fiance. She recalls a conversation she had with Tatman before they broke up in the spring of 1995.
"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.
"Durango is an honest, straightforward company trying to make a dream come true," says Randy Levin, a Wisconsin doctor who owns shares in the company. "Tim Hartley has been libeled by people who are dishonest and greedy. I'm very angry about what has happened to a company that was successful."
However, Maher and other Durango critics say people like Levin simply don't want to face the facts. "I've never seen such a group of lying, cheating people in my life," says White of her former colleagues.
Emotions grew so intense during one of the hearings in the lawsuit between Rugg and Durango that Hartley's wife reportedly started yelling at Sasha White, and several bystanders in the courtroom, including Rugg's daughter, had to intervene.
"Cindy had to stop that old lady from hitting Sasha," says Rugg. "She was screaming at her, 'How'd you like to be sued three times?' Our lawyer had to break the fight up."
After he began to suspect that he was being cheated by the Mogul promoters, Rugg confronted Tatman one day in 1994 at the Gold Hill Mill.
"He was bragging to me about what a great mill man he was," says Rugg. "I said, 'I think you're bullshitting me,' and he pulled a gun on me. I went up to him like I was going to bat it out of his hands, and he backed off."
After that, Rugg began sleeping with a loaded gun at arm's reach.
Rugg still holds fast to his dream of seeing the Mogul reborn. But now he fears he may not live to see it happen. "I have hopes Cindy and my grandson will reopen it," he says. "But I don't know if I'll see it."
For now, the mine is shut down, and if the residents of Eldora have their way, it will stay closed. The townsfolk have made it clear to Boulder County officials they don't like the idea of having a working gold mine in their backyard, and the county has responded by passing new regulations that make it harder to open mines near residential areas.
Rugg says the newcomers who've arrived in Eldora over the past twenty years have no respect for the mining industry that created Eldora in the first place. "People are moving here from Boulder and bringing their city ways with them," he says. "We've got a bunch of chickenshits up here now. All they do is fight me."
Rugg remembers Eldora in the 1920s, when he and his family were the only people who stayed through the winter. "One time my folks went to California, and I was the only one in town," he says.
Today things are more crowded, and Rugg butts heads with his new neighbors over everything from his collection of rusting mining equipment to the thirty or so horses that he and his family allow to roam freely through town. Summer residents complain that the horses eat their flowers, and they've asked the Ruggs to fence the animals in.
"They want this to be a pristine little town," adds Rugg. "There was a woman living on a dirt road near here. She came to me to say a horse had shit on the road, and she wanted us to bring a shovel and scoop it up. I said, 'Put on rubber shoes and kick it off!'"
Between fights with his neighbors and unending battles in court, Rugg says he's grown tired of it all. He misses the old days, when Eldora was proud to be a mining town and people liked living in a place where a horse might walk across their front yard.
"These people coming from California want to keep you off their property and boss you around on yours," says Rugg. "I just get so sick of people.
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