A Spokane Valley man implicated in a $1.2 million construction scam is in jail.
Sam Cover, 40, was arrested Monday on 26 counts of first-degree theft, with additional charges possible in other counties, making the fraud case one of the largest of its kind investigated by Spokane-area authorities.
He’s being held at the Spokane County Jail in lieu of $300,000 bail.
“One detective has done nothing but work on this case since the beginning of the year,” said Spokane Valley Police Sgt. Dave Martin. “We are happy to see this case done.”
The charges represent most of the victims identified in Spokane County, and about $320,000 of the total amount authorities believe was stolen since 2004. The remaining stolen money involves victims elsewhere in Eastern Washington and North Idaho.
Cover has been under investigation since November 2005 for thefts that occurred between September 2004 and June 2006, said Spokane County Sheriff’s Sgt. Dave Reagan, who serves as a spokesman for the Spokane Valley police.
The allegations involve a promise to build a steel structure under the company name, ICS Steel Buildings, police said. On several occasions, Cover asked would-be customers to give him a down payment on a building, then was never seen or heard from again, police said.
Cover has pulled this scam before, police said.
In 1995, he was found guilty of 17 counts of first-degree theft and sentenced to 85 months in prison. Reagan said Cover’s actions were almost identical to the most recent activity.
However, the state of Washington issued a contractor’s license four additional times to Cover, his wife, or a company Cover was working for after he was released from prison in 2002.
Cover arrived in the Inland Northwest during a prime time for contractors who have been capitalizing on a booming real estate market during the last couple years.
That boom, indirectly, has made it easier for scam artists because reputable contractors are often busy, many builders say.
“Less ethical contractors will overbook and take the money,” said Paul Badeaux, a contractor since 1973, who also is a real estate agent. “Most contractors aren’t like that, and those who are give us a bad name.”
Many of Cover’s victims said they chose him because he turned in a much lower bid than other contractors.
During the current investigation, Cover reportedly told detectives that while he was in prison, he studied the law extensively, especially as it related to theft by deception, Reagan said. Cover told the detectives they would never be able to prove that his intent was to not build the buildings for which he collected down payments.
On Monday, detectives picked up Cover leaving a job site near Harvard and Wellesley where he was working on a steel building under the company name New Beginnings Steel Buildings, owned by Richard C. Honnold of Deer Park.
“He (Cover) was contacting those customers and telling them there were extra unexpected expenses and telling them to write the checks to him rather than to the company,” police Sgt. Martin said.
Cover’s pattern in the 1990s and during the last two years has been consistent, police said. He gets a contractor’s license or works as a contractor for someone else. At first, he builds the steel buildings and does good work. Then his gambling and cocaine habits start to take hold, thus his need for more money, police said.
Detectives began investigating Cover after receiving complaints in November, Martin said. Investigators thought they had a break in early January when Cover was arrested on unrelated charges of driving under the influence and possession of cocaine, and they used that opportunity to interview Cover about the allegations in connection with ICS Steel Buildings.
Cover was then bailed out of jail on Feb. 19, according to jail records.
He’s been working as a contractor with New Beginnings Steel Buildings since April.
Meanwhile, investigators were working to build a case against Cover.
Spokane Valley detectives interviewed 109 people in Eastern Washington, North Idaho and Oregon who said they were victims of Cover’s scam, said Spokane Valley Police Chief Cal Walker. About 40 victims live in Spokane County.
In addition to individual homeowners, companies such as Rolled Steel Products, Timberline Truss, J.E. Bonnet Engineers, Western Wood, Lockwood Lumber, Spokane Overhead Doors, Henderson Roofing and Sherman Concrete all sustained monetary losses because of Cover and ICS Steel Buildings, Reagan said.
Martin explained it took this long to bring charges against Cover because of the tremendous amount of documentation that had to be sifted through, numerous interviews with victims and the FBI’s interest in the investigation.
“Federally he could have faced more time, but the FBI decided that they had other higher priority cases to focus on,” Martin said.
Traci Bowles, one of the Spokane County victims, has led the crusade in making people aware of Cover’s dishonesty and was pleased to hear he’d been arrested.
“Our day has finally come,” Bowles wrote in an e-mail to several victims.