When two brand new, shiny black Mercedes SUVs bearing a "Hardin Police Department" logo drove through the main thoroughfare of Hardin, Mont., last week, people took notice.
"How many police forces have Mercedes?" said Charlene Warren, a local business owner who has lived in Hardin for more than half a century. "That threw up a red flag."
And speaking of flags, it did not go unnoticed that the emblem on the sides of the SUVs bore a strong resemblance to the Serbian national flag.
Furthermore, those "police department" cars were rolling through Hardin, a small southeastern Montana town of 3,600 that just happens not to have a police department.
The luxury vehicles that rolled through town belonged to the American Police Force (APF), a California-based security firm that is drafting a contract that will give it control over a $27 million medium-security prison that was built in Hardin more than two years ago, but has never held any prisoners.
But that contract is now on hold as the Montana State Attorney General's Office investigates APF and the Big Horn County Sheriff's Department enters preliminary talks about incorporating a real police department in Hardin so a similar episode doesn't occur in the future.
At first, Hardin residents were pleased that APF was planning to turn their empty prison into a training facility. Hardin has a double-digit unemployment rate and is desperate for revitalization, and the area was left high and dry last spring when the federal government decided not to use the facility to harbor Guantanamo Bay detainees. Opening the prison would mean jobs.
But since the SUV incident, APF's reputability is under scrutiny.
"We have covered this story for years now, and for the last month, it’s been one twist and turn from the other" Nick Lough, a reporter at KULR-8 in Billings, Mont., told FOXNews.com.
The latest twist: The owner of APF, Michael Hilton, is a convicted felon, including two convictions in grand theft cases, and an alleged con-artist who, according to some sources, utilizes more than 20 aliases.
"That is big controversy, is the unknown," said Warren. "There are too many lies."
Michael Cohen, a former Secret Service agent named as the would-be operator of the prison, served 14 months in prison for stealing $2,800 from the agency after his conviction in 2004. Cohen told the Associated Press he spoke with Hilton about the position but was not offered the job.
Hardin's Two Rivers Authority Board — an economic development agency — was contacted by APF about a month ago to draft a contract that would hand over control of the prison. But now the board's Web site prominently displays the following words:
We welcome anyone to visit our town!
There are no commandos in the streets.
There is no fence or gate being built around Hardin. People are free to come and go as they please. APF is not running our town or our police force.
Residents and concerned citizens now are voicing their opinions on street corners, at town hall meetings and in the blogosphere. They are demanding to know who APF's parent company is, what the company plans to do in their town and, finally, what on earth those two Mercedes were doing roaming their streets.
Bob van der Valk, contributing writer for the Terry Tribune and editor of the travel website Montanawithkids.com, doesn't think the people of Hardin will let the APF get the contract to run the prison.
"I think the people found out that what occurred was an under-the-table deal that shouldn't have happened," he told FOXNews.com. He said he hopes the facility will be turned into a high school to combat school overpopulation in the community.
FOXNews.com contacted Hilton's office at APF, but he declined to comment. The company's public relations director, Becky Shay, formerly a reporter for the Billings Gazette, also refused to comment. According to one report, Shay fears for her own safety and recently hired her own security team. Residents, bloggers and the media are said to be filling her inbox with their grievances, and there are reports that she has received death threats.
"They just can't give us any answers," Warren told FOXNews.com. "People are afraid. This is a good little town, we got a nice people here, and I wouldn't want to see some dishonest person, like this American Police Force, do any harm to our town."
"They found us real vulnerable right now," Warren says, "and they are just taking advantage of a good thing."