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June 8, 2003
Fugitive rancher resurfaces in Mexico
BY STEVE JORDON
WORLD-HERALD STAFF WRITER
John Brentley Chancellor "Chance" Reynolds and his family, missing since he escaped in 1999 while serving a federal prison term for bank fraud, have resurfaced near San Miguel de Allende, a town of about 80,000 in mountainous central Mexico.
U.S. and Mexican authorities failed in one effort to capture Reynolds but believe he may still be in the area.
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In San Miguel, Reynolds, 50, reportedly bilked a partner in a riding academy out of $25,000, which led to a confrontation that ended in Reynolds being hit by a Chevrolet Suburban and his horse run over and killed.
Now he may be hiding with the help of friends who believe his tale of being persecuted by U.S. authorities and forced into a fugitive lifestyle to protect his family.
"He's a con artist," said Bob Mandel, supervisor for the U.S. Attorney's Office in Rapid City, S.D., where Reynolds was prosecuted in 1997. "When he had his opportunity to challenge the case through the legal process, he didn't. He admitted his guilt.
"At this point, he's a fugitive escapee, and I think you have to take his protestations with a grain of salt."
In the mid-1990s, Reynolds used his winning, cowboy-style persona to cheat lenders to his cattle operation near Custer, S.D., out of about $8 million. Omaha's Farm Credit Services of America was one of them.
Bankers eventually discovered that the cattle backing up the loans did not exist, and in March 1996 authorities seized the ranches and other assets.
Reynolds left the area with his family. He was arrested Feb. 3, 1997, in South Lake Tahoe, Calif., where he was driving a taxi, and sentenced to seven years in prison for making false claims to get bank loans.
In March 1999, Reynolds missed a bed check at a minimum-security federal prison in Florence, Colo. His wife, Celina Neteri Reynolds, and their three daughters - Rachel, Hallie and Annie - disappeared at the same time. Reynolds is charged with escape from federal custody.
After a 1999 World-Herald story about Reynolds, Charles Sargent Jr. of Broken Bow, Neb., reported that he had hired the family to oversee an orange and pineapple grove in Belize, in Central America, and rented them a house on the property.
When Sargent tried to talk Reynolds into giving himself up, the family disappeared again, along with about $4,500 in cash from the orange grove.
Now the U.S. Marshals Service believes Reynolds is in or near San Miguel. The town's inexpensive lifestyle, good restaurants and other amenities have attracted several thousand resident Americans and other foreigners, including many artists.
One of them is Farid "Fred" Parhad, a U.S. citizen and sculptor of Assyrian heritage.
In a series of e-mails to The World-Herald, Parhad said he moved next door to Reynolds about two years ago. Reynolds introduced himself as Lew Garcia, his wife as Celina Neteri Reynolds and his two daughters as Hallie and Annie.
Today, Hallie would be about 17 and Annie about 12. Parhad did not mention Rachel, who would be about 20.
Parhad said "Garcia" talked him into investing $25,000 in a horseback riding academy known as the Sleeping Dog Ranch before eventually admitting his identity and telling his "true story."
Over time, the business dealings between Reynolds and Parhad soured.
In March, Parhad said, he contacted U.S. marshals, who began working with Mexican authorities to capture Reynolds.
Parhad said he and his daughter were riding horses when they were "attacked" by Reynolds. Parhad said his son "came to my rescue in our Suburban." The episode ended with Parhad running over Reynolds and his horse, killing the animal and breaking Reynolds' collarbone.
"He is still here but in hiding," Parhad said.
Ken Deal, chief deputy for the U.S. Marshals Service in Colorado, said the attempted arrest was "a missed opportunity." He believes Reynolds remains in the San Miguel area, but following the rules of international treaties and dealing with local Mexican officials to arrest Reynolds is time-consuming, Deal said.
Another complication is interference from people who believe Reynolds' conspiracy tales, Deal said.
In 1999, Reynolds wrote a letter to Sargent, the Broken Bow resident, alleging that his cattle operation was brought down by federal banking, law enforcement officials, elements of the cattle industry, the State of South Dakota and neighbors jealous of his financial success.
In the letter, Reynolds said that his operation was worth nearly $20 million and that he expected $18 million in profits in 1996 and 1997, enough to handle his $12 million in debts.
He said farm lenders worried that his plan to sell "natural" beef - with no chemical enhancement - would create chaos in the livestock industry.
Reynolds also claimed that South Dakota authorities wanted his ranchland for its limestone deposits, which could be used for a big federal highway project nearby.
Mandel, with the U.S. Attorney's Office in Rapid City, dismisses those allegations. "If his approach to cattle production so threatened the industry, where were the cattle? He sold his collateral."
Reynolds wrote that when he realized there was no way to fight the allegations, "We borrowed a vehicle from friends, drew three thousand dollars on a credit card and headed west."
After his arrest and sentencing, he wrote, "My family struggled for two years and one month, often without the means to pay for dentists, or shoes, or clothes. On the night of March 14, 1999, I crawled over three 14-foot fences and walked away from a federal prison camp."
Ted McBride, a Rapid City attorney who was a federal prosecutor in the Reynolds case, said the stories contain elements of truth.
A cement plant owned by the State of South Dakota ended up buying some of Reynolds' property that contained limestone deposits. And there's a big highway project nearby: the four-lane "Heartland Express" from Rapid City to Interstate 80 in Nebraska.
But the bank fraud case against Reynolds was "just about as solid as I've seen," McBride said. In presentencing interviews, Reynolds admits taking out loans to buy cattle but not actually making the purchases.
McBride said Reynolds put his family at risk by escaping. Had he served his prison term, McBride said, today Reynolds would be free to live anywhere with his family.
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