Recent creditor claim filings in the Clay Stephens estate probate case reveal details about how Stephens enticed victims into giving him their money or allowing him to keep possession of it.

In a letter in early Nov. 2011 to David and Kathleen Michalski of Latham, New York, Stephens referred to $30,000 he took from them in 2006.

“You have had all interest re-invested at 10% so the original investment of $30,000 has accumulated by $20,707.40 in interest over the 5 years,” Stephens wrote.

“We wanted to let you know and ask if you would like the total amount sent to you on December 1st or if you would wish to consider any of our standard re-investment options,” he wrote.

“The portfolio has performed well and we have been able to hold rates steady.”

But there was almost no portfolio of leases backing the “secured” promissory notes. In his letter to the Michalskis, Stephens listed rates based on the term: 12 mos. at 8.75 percent; 15 mos. at 9 percent; 18 mos. at 9.25 percent; 24 mos. at 9.5 percent; 36 mos. at 9.75 percent; 48 mos. at 10.0 percent; and 60 mos. at 10.25 percent. These rates, though illusory, were extremely attractive.

The Michalskis allowed Stephens to set up new promissory notes for 60 months at 10.25 percent, reinvesting their $50,707. But the money was not earning interest; in fact, Stephens had negotiated to keep their original $30,000 for another five years.

To close the deal, Stephens enclosed a new promissory note in a letter three weeks later in Nov. 2011, adding a handwritten note above his signature: “Best regards, and all best wishes for the holidays,” Stephens said.