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Friday
Feb012013

Washington Developer, Wife, and Mistress Indicted in Multi-Million Dollar Real Estate Ponzi Scheme

Federal authorities arrested a Spokane businessman as he was about to board a plane, charging him, his wife, and his apparent lover with running a massive real estate Ponzi scheme described in in a 73-count indictment.  Greg Jeffreys, his wife Kimberly Jeffreys, and Jeffreys' girlfriend Shannon Stiltner were charged with multiple counts of conspiracy to commit bank fraud, bank fraud, theft of government property, wire fraud, and money laundering.  Each of the charges carries extensive possible prison terms as well as criminal penalties.  The three each entered a not guilty plea to the charges.

According to the indictment, Jeffreys began soliciting investors to finance the construction of various government and residential properties across the United States, such as a Military Entrance Processing Station in Denver and a condominium project in Idaho.  Jeffreys had received government stimulus funds for some of the properties, and had also obtained loans from several banking institutions including Washington Trust and Wells Fargo using the stimulus money as collateral.  Investors were promised above-average rates of return on the ventures, and received regular updates from Jeffreys' girlfriend about the progress of various projects.

Investors were not told that Jeffreys had received government stimulus money on some of the projects.  Additionally, several of the described properties did not even exist.  For example, Jeffreys' pitched projects such as a 200-unit condominium project in Seattle, a 100-unit apartment building in Louisiana, and a Military Entrance Processing Station in Denver.  However, not only were the Seattle and Louisiana projects nonexistent, but Denver already had a processing station, and the address investors were given for the Denver processing center was actually a federal office building.  The banks from which Jeffreys obtained construction loans also suffered losses, as, apparently unbeknownst to them, each loan was secured by the same collateral.  When the scheme collapsed, the banks foreclosed and suffered substantial losses.  

Instead, the Jeffreys and Stiltner ran the classic Ponzi scheme, diverting millions of dollars in investor funds to their bank accounts to pay various personal expenses, such as gambling debts in Las Vegas and gifts to their children. While authorities have yet to estimate total losses, the various incidents described in the indictment indicate the figure could be in the tens of million.

While purely speculation at this point, the inclusion of Stiltner in the indictment (and the sheer number of criminal charges) is likely an attempt to encourage her to cooperate with authorities.

The three remain in custody on $150,000 bond.

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References (5)

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    Ponzitracker - Ponzitracker - Washington Developer, Wife, and Mistress Indicted in Multi-Million Dollar Real Estate Ponzi Scheme
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    Response: richard goozh
    Washington Developer, Wife, and Mistress Indicted in Multi-Million Dollar Real Estate Ponzi Scheme - Ponzitracker - Ponzitracker
  • Response
    Excellent Webpage, Continue the useful work. Thanks a ton!
  • Response
    Washington Developer, Wife, and Mistress Indicted in Multi-Million Dollar Real Estate Ponzi Scheme - Ponzitracker - Ponzitracker
  • Response
    Response: USHUD
    Washington Developer, Wife, and Mistress Indicted in Multi-Million Dollar Real Estate Ponzi Scheme - Ponzitracker - Ponzitracker

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