Flashy Dallas Real Estate Personality Admits Tax Evasion

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Eleanor Mowery Sheets and Nicky Sheets in happier days. Nicky pleaded guilty to tax evasion. John Nicholas "Nicky" Sheets was like a character out of the 1980s TV show "Dallas." The motorcycle-riding ostrich rancher with a graying ponytail met his second wife, Eleanor, a successful real estate agent (Coldwell Banker's top Texas agent for 12 years straight), while looking for house to buy in the Dallas area. For their first date, he showed up at her house wearing a white tuxedo and driving a white limo.

The pair wed in 1992 and became the best-known, wealthiest, and certainly flashiest real estate team in the Lone Star State. So when Nicky Sheets pleaded guilty this week to a cumulative individual and corporate tax evasion of $2.7 million, including penalties and interest -- a crime that carries prison term of up to five years, as well as a fine as much as $250,000 -- it sent ripples through the Texas real estate market. Many observers, however, were not surprised.
Eleanor Mowery Sheets was doing around $12 million a year in sales before Nicky joined her as a business partner; together they produced more than $100 million in annual sales. For real estate agents, Nicky and Eleanor did pretty well: Between 1997 and 2003, they cleared more than $9 million in commissions.

But living large often undercut their success. The couple lived in one of Dallas's top neighborhoods in a 5,000-square-foot $1.75 million French "cottage" with a three-car garage and a pool with a built-in waterfall. Nicky drove a black Mercedes S430. Saddled with debt from a previous marriage and bad business deals, Nicky manipulated his finances, according to the Department of Justice. In 1997, for example, one of Nicky's companies, JNS Investments, made $402,066 on a land deal. But the monies were paid directly to Eleanor, at Nicky's behest. In court documents, a bankruptcy trustee claims that Eleanor spent the all of it in 30 days, spending $45,000 on a Lexus for herself, and $41,000 on an Acura for her son, as well as clothing from Neiman Marcus and other high-end department stores.

While Nicky claimed he was impoverished, his actions suggested otherwise. One time during the same period, he sent his lawyer to Odessa, Tex., for a court hearing in a plane owned by JNS Investments. A creditor's lawyer who was pursuing Nicky's assets went after the plane, "but by the time he had tracked it from a recently vacated hangar...it had been repossessed."

Nicky was arrested in September 2000 for soliciting prostitution in a sting operation, where Dallas police officers posed as hookers. Though, the charges didn't stick, Nicky's troubles were hardly over. In September 2001, he was threatened with jail time for refusing to file his 2000 tax returns.

Then the frothy Dallas real estate market began to decline. Sales of houses in the city's tonier districts with an asking price of $2 million to $3 million plummeted by 45 percent in 2008, according to MLS. Eleanor's wealthy client fled in droves. By the bitter end, the Sheetses couldn't even pay their smaller bills. A local ad agency says they are owed $2,500. And a check Nicky wrote for $308 to a local hamburger joint bounced.

Recently, the IRS unsuccessfully tried to sell the Sheetses' house at auction. Meanwhile, Eleanor, as of late, has tried to revive her real estate business on her own. As for now, she also appears to be standing by her man, recently touting Nicky on her Web site as "the creator of many of the formative business transactions we do."
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