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Property managers’ actions spark lawsuit, criminal probe

Mon., July 20, 2009, 7:19 p.m.

When a Western Washington real estate owner died in a freak skydiving accident in Texas last year, his children felt his Spokane assets were in good hands.

The couple in charge had worked for Rex Williams for eight years, and his family needed someone trustworthy to handle things as they dealt with his unexpected death.

But the couple, Kathy and George Bagwell, now stand accused of trying to dupe Williams’ family out of tens of thousands of dollars in an alleged scheme that triggered a civil lawsuit and a criminal probe.

No charges have been filed in the case. The Bagwells’ lawyer, Stephen Matthews, said he’ll present his clients’ side of the story in court.

“We’re investigating the matter and we’ll defend it vigorously,” Matthews said.

Rex Williams lived in Tacoma and kept his accounting books by hand, but 13 months after his parachute failed to open and he plummeted to his death during a skydiving excursion, his daughter Chaundra Williams noticed a sharp drop in cash flow from the Spokane properties — $30,000 to $50,000 a month since at least April.

She traveled here last month to try to revitalize the business when she noticed the Bagwells accepting rent payments in cash without depositing the money, according to a search warrant filed by Detective Stacey Carr. Deposit slips corresponding to monthly rental reports were off by thousands of dollars, Carr wrote in the search warrant.

“It’s a horrendous amount,” Carr said.

A lawsuit filed in Spokane County Superior Court July 6 accused the Bagwells of falsifying accounting records to conceal the missing money.

Two days after the lawsuit was filed, police raided the Bagwells’ bank and credit records and searched their house at 605 E. Wedgwood, where they took two computers, paperwork and five gambling identification cards.

The Bagwells are frequent gamblers at Northwest Quest Casino and travel to Las Vegas twice a year, according to the police search warrant.

“I just can’t see how this could happen,” said Tony Drost, treasurer for the National Association of Rental Property Managers and president of First Rate Property Management in Boise. “Somebody just wasn’t paying attention or did not have the system in place to identify the problem.”

The Williams family owns three apartment complexes in northeast Spokane with 304 apartments, the Lyons Crest, the Lyons Glenn and the Lyons Ridge apartments.

Detectives are looking at evidence seized from the Bagwells’ house now. The criminal probe could last several more weeks.

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