January 25, 2009 in Business

Penalties don’t seem to match the scam

By The Spokesman-Review
 

A decade ago, Tony Napier stood before Spokane County Superior Court Judge Sam Cozza and lamented the wrong done him by homeowners who broke faith with his efforts to keep them in their houses.

He had, he said, been scammed.

“I’ve always been a person to help people,” he said.

Cozza, unlike Napier’s victims, was not buying the sob story. He sentenced Napier to one year in prison for first- and third-degree theft and equity skimming. It was not nearly enough.

Colfax residents Napier and his wife, Alicia Napier, are back in court, charged with violating the conditions imposed in 2002 by now-retired Judge Jim Murphy, who heard the state of Washington’s civil complaint against the pair in connection with the same activity that landed Tony in jail. Alicia had faced criminal charges, too, but those were dismissed.

Murphy forbade the Napiers from again engaging in equity skimming or any other deceptive acts in the purchase, sale or leasing of real estate, or obtaining some loans secured by real estate.

That’s exactly what they have done, according to a new civil complaint filed 10 days ago in Superior Court.

The complaint alleges the Napiers used an entity called Principle Direct Investments LLC to turn three Whitman County couples out of their homes, scamming investors who put up the money to “buy” the properties in the process.

Principle Direct was managed by Tony. In 2006, he arranged a joint venture with Alicia whereby she secured financing and took title to the properties obtained by PDI. She and PDI split profits 50-50, but PDI got stuck with 100 percent of the losses.

PDI squeezed about $108,000 in equity and $64,000 in cash out of the home purchases, plus rents, in one case evicting the former owners.

Another $240,000 ventured by investors in three Nampa, Idaho, duplexes is unaccounted for. PDI has filed bankruptcy.

Meanwhile, as part of his plea in the criminal case filed in 1997, Tony has been paying restitution to four victims who lost homes sold to the Napiers for little or no money – the business was named No Money Down Homes Inc. – in return for a pledge the Napiers would assume responsibility for the mortgage payments. The Napiers sometimes got cash out as part of the deal, which was backed by investors who provided short-term financing for the purchases.

The Napiers would rent the properties but not make mortgage payments, and the homes would go into foreclosure – classic cases of equity-skimming.

Tony still owes more than $100,000 to those victims.

Tony has made $9,000 in payments at the rate of $200 a month, not enough to keep up with interest accruing at the lawful rate of 12 percent. “He’s going backwards,” as Spokane County Deputy Prosecutor Francis puts it.

At a hearing he would like set for March, Francis says he will ask Superior Court Judge Ellen Clark to force Alicia to produce an accounting of her assets, with the hope they might be used to make the victims whole 10 years after Cozza tried to give them a measure of justice.

The latest litigation is at least the fourth, criminal and civil, undertaken by the authorities against Tony Napier. The message does not seem to be getting across, or maybe it is. Serve four months in jail, pay restitution at $200 a month, and you and your spouse go on you merry way.

Owen Clark Jr., the retired assistant attorney general who filed the last civil case against the Napiers, says he is not surprised to see Tony back to his old tricks.

“He’s the type of defendant that I think only criminal penalties can deter,” he said.

Which means it is up to the Whitman County prosecutor, who so far has not undertaken an investigation. Although, as Clark notes, cases like this can take a lot of time and money, the sums allegedly ill-gotten here are considerable.

It is trite but true that, had the money been taken using a weapon, the public would demand charges be filed. Without prejudging the outcome of the civil case – the Napiers certainly have the right to assert innocence – it seems fair to suggest criminal charges might better discourage those who prey on distressed homeowners.

The Napiers have “helped” too many already.

Reach Bert Caldwell at (509) 459-5450 or by e-mail at bertc@spokesman.com.


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