How a Village Office was Bought for $33,000 and Sold for $476,000

In April 2010, when “60 Minutes” aired a segment about “21st century snake oil salesman” Larry Stowe, alarms went off for Bob Rhoads of Alpine.

Rhoads had sold an office building at 8341 La Mesa Blvd. to Stowe in June 2008 for $475,000, and Stowe hadn’t made payments for nearly two years, he said.

The Village office was used for the Stowe Biotherapy clinic that correspondent Scott Pelley of “60 Minutes” depicted as a place where dying patients were defrauded of tens of thousands of dollars, lured by promises of a bogus stem-cell cure.

“I was trying to be a nice guy,” Rhoads said Friday in recalling last year’s events. He said a previous tenant of the building had called to alert him to the “60 Minutes” report. He hadn’t seen it on TV.

“So I watched online,” he said. “As soon as I saw that, I knew he was going down [financially].”

Rhoads said he hadn’t been aware of the Stowe operation. But he knew he had to act fast, so he moved to foreclose on Stowe—who also faced lawsuits over his operation, Rhoads said.

“I didn’t have anything to do with his business except  the equity in his property,”  said Rhoads, who held a second and third trust deed on the property and was owed $115,000. 

A lien of $360,000 existed on the property as a result of what Rhoads recalled as a $220,000 judgment against the Stowe Foundation, which Stowe used to market his stem-cell treatment.

Stowe couldn’t sell the property as a result of the liens—which a buyer would have to pay off—but Tom Dyke of Alpine, who operates a drilling and blasting company, was able to buy the office at a “courthouse auction,” according to Rhoads and county records.

The price for The Village office building was $33,865, according to county records. Chicago Title Co. and The Stowe Foundation are listed as sellers of the building on Nov. 3, 2010.

Rhoads said the listed $33,865 price “is a bit hard to understand if you don’t know how secured debt is handled.”

On Monday, he wrote:

In order for Stowe to sell the property, the first, second, third [trust deeds] and $220,000 judgment would all have to be paid to transfer clear title, which was not going to be possible. Mr. Dykes approached me prior to my foreclosure and indicated he wanted the property, but the 220K judgment could not be paid because the property did not have that kind of equity.

We knew that after my foreclosure the judgment would be wiped out, so he purchased my third trust deed at the courthouse steps knowing he was then responsible for the first and second and the terms of the loans.

Dykes paid the first and second off, which included a $33K prepayment penalty, which I absorbed as a part of the transaction to recover my equity. That is why it appears the building was purchased for $33K, but in fact it was purchased for approximately $500K if you follow the document trail.

About seven weeks later—on Dec. 23, 2010—Dyke sold the building to Total Thermal Imaging, its current occupant, for $476,000. Title information (attached) says the secondary owner is Charles Dittes Parker.

Rhoads has had no contact with Stowe—based in Fort Worth, Texas—since the 2008 sale, he said.  And he’d have trouble to reach him if he tried.

The Stowe Foundation website is still live and its domain registration is paid up through June 18, 2012, as a client of godaddy.com, according to online records. But two listed email addresses on the site are no good, La Mesa Patch found. 

But the address listed on the domain-name registration— drstowe98@yahoo.com—still appears to work. Our e-mail hasn’t “bounced.”   The the listed  phone number has been disconnected, however.

In September, the La Mesa Police Department said the Texas division of the Food and Drug Administration was investigating Stowe. An FDA spokeswoman in Rockville, MD, is checking the status of that investigation and promised to get back to La Mesa Patch. 

A U.S. Attorney’s Office in Texas also said last year that it couldn’t confirm or deny an investigation was taking place. That office has been contacted as well for a status report. 

Nearly a year after the “60 Minutes” segment on Stowe aired, no charges have been publicized against him.  

Last Sunday, the La Mesa Boulevard office of Stowe Biotherapy was shown on “60 Minutes Presents,” a CBS show of repeats that aired opposite the Academy Awards on ABC.

Stowe’s Village office closed within a week of the segment’s first airing (the show was rebroadcast Sept. 12, 2010).

The Medical Board of California launched a probe based on the allegations of Stowe’s unlicensed medical activity, but eventually closed the inquiry, citing “insufficient evidence to proceed,” the board’s spokeswoman told La Mesa Patch in September. 

And the Stowe Foundation?  It still exists, according to IRS records of 501(c)(3) nonprofits as the foundation is classified.  But Guidestar, an archive of nonprofit public documents, has no 2009 Form 990 on file—a statement the government requires of all such nonprofits.

Mary Fletcher Jones, a spokeswoman for GuideStar USA, says:  “I checked the record and I just see the last 990 as 2008, as well. ... We just get the info that is sent to us from the IRS.”

Regional IRS spokesman Raphael Tulino, when asked why the Stowe Foundation hadn't filed a tax statement since 2008, said: “If a form 990 for a certain year is not available, there are various general reasons for this”:

(1) a return is not required because of IRC Section 6033(a)(2)

(2) a return is not required because of authority for inclusion in a group return,

(3) a return is not due yet because of a current extension of the time to file,

(4) the return has been filed but is still in processing, or

(5) the return may be delinquent.

Charlotte Reed contributed to this report.

Story updated at 6 p.m. March 7, 2011.