Federal investigators are attempting to seize an Arizona property owned by Spokane real estate investors as part of a broader probe into alleged fraud by the couple, who are tangled in the complicated ownership of the former Ridpath Hotel complex.
FBI agent Lisa Jangaard filed a request last week to seize an office building in Sun Lakes, Ariz., a suburb of Phoenix. According to court files, Greg Jeffreys and his wife, Kimberly Jeffreys, obtained $600,000 from an investor as partial payment for the purchase of an upscale office building in San Francisco.
However, the San Francisco building doesn’t exist and investigators allege the money from the unnamed investor instead was used by the couple to transfer ownership of the Arizona property to a company owned by Kimberly Jeffreys.
“It is believed, based on financial information reviewed and investigation to date, that Gregory Jeffreys, Kimberly Jeffreys and Shannon Stiltner have deliberately engaged in a real estate/investment fraud scheme involving … multiple investors and multiple financial institutions,” Jangaard wrote. Stiltner is described in the court paperwork as Jeffreys’s “‘right-hand person’ and possibly a girlfriend.”
As late as Friday afternoon – just moments before Jangaard filed the seizure request and a broader search warrant was made public – Greg Jeffreys was telling the investor during a telephone conversation that he expected payment from another investment that would allow him to pay back the investor’s $600,000, according to court documents.
Reached on his cell phone today, Jeffreys said he didn’t know anything about the property seizure and declined further comment.
Neither of the Jeffreyses has been charged with a crime.
The action against the Arizona property came as a result of documents seized July 19 during a search of the couple’s home in the 5300 block of North Vista Court.
Also named in the broader investigation is developer Steven “Brian” Main. Jangaard alleged that Main and the Jeffreyses conspired in a series of sham investments designed to defraud other investors of millions of dollars. Among the couple’s properties involved in the wider probe is the Halliday Building, which is part of the Ridpath complex, records show.
According to investigators, the Jeffreyses and Main lured investors and secured bank financing by relying on artificially inflated appraisals that were obtained by engineering “sham transactions” on neighboring and comparable properties.
“Under the scheme, investors and financial institutions were furnished with significantly inflated property appraisals that were relied upon by the relevant parties for investment and lending decisions,” Jangaard wrote. “To date, both investors and financial institutions have reported losses totaling millions of dollars from the real estate and mortgage scheme described herein.”
In one case, the FBI believes, the couple took a $1.8 million payment that should have gone to a local bank and instead paid off some debts, gave some of it to their children, and then spent thousands on gambling and entertainment at the Mandalay Bay Casino in Las Vegas.
In the alleged Arizona property scam, the investor – who was not identified – said he was referred to Greg Jeffreys by a real estate broker in California.
The investor contacted Jeffreys, who described an opportunity to buy into the Oyster Point Office Building in San Francisco. Jeffreys claimed that he and three other partners were spending $2 million each toward the purchase but that he needed $600,000 to close the deal.
Jeffreys provided an address, the name of the title company representative and the investor turned over the money on a “personal guarantee” by Jeffreys to pay the money back with interest. After receiving no payment, the investor discovered that no building matching Jeffreys’ description existed in San Francisco and the title company had no employee with the name given by Jeffreys.
Jangaard researched financial records of Greg Jeffreys and Shannon Stiltner and found $600,000 was deposited on Feb. 17. That same day, someone withdrew $313,000 and deposited $220,000 of it into another account controlled by Greg and Kimberly Jeffreys.
Also that same day, a payment of $128,000 was made from the couple’s joint account to a law firm in Las Vegas. That money eventually was paid to the bank that made the original loan on the Arizona property purchase.
As of last Friday, the investor “has not received any interest payments nor his principal investment of $600,000 as promised in the note signed by Jeffreys,” Jangaard wrote.
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