Winston-Salem/Forsyth County Governments Offer Incentives to CFS II in Spite of Questionable History

By Jeffrey Sykes


The Winston-Salem City Council and Forsyth County Board of Commissioners have both recently voted to approve offering financial incentives totaling nearly $550,000 to Commercial Financial Services II, an Oklahoma based company. CFSII is a debt collection company owned by Bill Bartman, whose original Commercial Financial Services company went bankrupt after the Federal Government indicted its two owners on fraud charges.


Bill Bartman was once one of Oklahoma’s richest men. At the height of his wealth in the late 1990s he hired 27 jets to fly 3900 employees of his company, Commercial Financial Services, to Disneyland. He wrestled Hulk Hogan in front of 6000 people.

But the party collapsed in 1998 when his debt-collection service was accused of fraudulently propping up its collection rate. A federal jury acquitted Bartman of wrong doing but credit agencies refused to certify his company and he was forced to file bankruptcy.

More than a decade later, Bartman is back with a plan to expand his new company, CFSII, outside of its base in Tulsa. North Carolina is one of several states vying to land the company, which is looking to create up to 2000 new jobs. Winston-Salem economic development officials are offering Bartman’s firm cash incentives to bring his business to a location at Madison Park on the north side.

Under a plan called Project Robust, city and county officials hope to lure the company here with cash payments that would come from monies repaid by Dell Corp. after the computer manufacturer closed its much discussed plant in eastern Forsyth County. The city is offering up to $500,000 in return for CFSII maintaining operations in Winston-Salem for seven years.

Elements of the proposal include requirements that CFSII create at least 2000 new full-time jobs in 48 months. The jobs must have an average starting salary of $40,000 and include health care insurance. CFSII would also need to make a capital investment $6.6 million in the same four-year period. If the company fails to meet these two conditions the city would reduce its incentive payments according to a pro-rated formula.

The plan also includes a repayment formula in the case of CFSII ceasing operations within the first seven years. The company would repay the city 100 percent if they close within the first three years and 50 percent if closed in year four. The amount shrinks by half each year after that.

The original CFS moved into its Tulsa location in 1995 and began hiring at the rate of 40 employees a week. At its height CFS employed 3900 people in Tulsa and Bartman was listed on the Forbes 400 in 1997 with an estimated net worth of about $3 billion. The next year, the company had gone bankrupt.

In spite of this history, the governing bodies of Winston-Salem and Forsyth County voted to approve the plan. Both High Point and Greensboro have backed away from offering incentives primarily due to Bartman’s track record. “This history certainly clinched it for me,” Guilford County Commissioner Paul Gibson told the Greensboro News and Record. “This one just didn’t pass my litmus test.”

Bartman himself has a checkered past. Born in Iowa in 1949, he dropped out of high school, was rejected for service in the Marines, had a stint in a gang and worked with a carnival. He went to work in a meat packing plant before securing his GED and going on to college and law school.

He became a real estate investor in the 1980s after building a practice as a bankruptcy attorney. He later took over an oil firm in Oklahoma where he had initial success before going bust when oil prices tanked in 1985.


Although Bartman was deep in personal debt he was able to finance a scheme to buy defaulted loans from the federal government and built a debt collection service with a healthy profit margin. He was able to pay some of his past personal debts and build a viable business.

According to the New York Times, the business model involved CFS borrowing money from investors by selling securitized debt certificates. In essence it was similar to a mortgage backed security we are all familiar with today. Investors bought the debt certificates and CFS used the money to buy up pools of debt from the federal government. If they were able to collect on the debt, the money would be passed back to the investors while CFS would take a cut.

Credit agencies such as Moodys were unable to verify the company’s procedures and in 1997 some ceased backing CFS with a credit rating. It was later determined that as much as 60 percent of the collections were actually transfers of the debt pool to a shell company connected to Mr. Bartman’s partner, Jay Jones. Jones pleaded guilty to federal conspiracy charges in 2003 and served time in prison.

At the time of the trial, Bartman claimed to be unaware of Jones’s scheme to prop up the company’s debt collection rate, although he was the principal owner of CFS. Bartman was indicted in the incident, but was found not guilty by a jury.

Prior to that however, Bartman had resisted several overtures from major banks including Goldman Sachs who wanted to buy a large stake of the company at the height of CFS’s profitability. He did buy out his partner Jones for $50 million, and it is thought Jones used that money to start the shell company that bought pools of debt from CFS.

Bartman has made his way back into the public eye, first by working with officials in Oklahoma on economic development issues, and most recently by publishing a book titled “Bailout Riches” which was a global bestseller. He also speaks on ways to profit from the banking collapse by buying defaulted bank debt and utilizing TARP subsidies, and has written a column for the Huffington Post condemning aggressive debt collection.

Bartman has made news in 2012 by pitting localities across the Triad against each other in a bid to host a reformed CFS. CFSII approached Greensboro, High Point and Winston-Salem declaring interest in locating a new operation in the Triad, setting off an incentive bidding war between the cities before Greensboro and High Point withdrew. Bartman claims that Nevada and Illinois are also vying to host CFSII, however an internet search for CFSII and Illinois returns no results. The Nevada Commission on Economic Development has offered incentives totaling $570,000 in their bid to host CFSII. Bartman claims that CFSII plans to expand from the 220 employees it reported in 2011 to 10,000 employees in 5 states within 5 years.


This story is still developing.  Please check back with CCD in the coming days for follow-up.