In 2006 and 2007, things were going very well for Brian Main.
Main was involved in several real estate deals that seemed ripe to produce fast, fat profits – deals that seem now, in the cold light of hindsight, too good to be true.
Which they were. A lot of people lost money in those deals – part of the trail of real estate transactions Greg Jeffreys compiled in the years before the boom busted – and some of them have alleged, in lawsuits, that Main was working in concert with Jeffreys to defraud them. Many of those allegations have appeared in this column.
But Main – who’s now living in New York City – says that he, like other investors, was taken in by Jeffreys’ schemes and was not a “co-conspirator.” He says everyone involved was too credulous, too willing to believe in the too-good-to-be-true. Main said that his entanglement in Jeffreys’ real estate deals at the Ridpath Hotel cost him everything – he walked away broke and unable to borrow in the town where he’d spent nearly two decades in real estate and development.
“I lost what would be a fortune for a lot of people,” he said. “There’s been this idea that I scammed people. … I’m not trying to say, ‘Oh, God, I’m such a great guy.’ I’m just tired of getting my head kicked in.”
Main is a 47-year-old native of Reardan, Wash., and he still has a lot of family in Spokane. He says that the publicity surrounding his involvement in the Jeffreys deals at the Ridpath Hotel and on the West Plains has been “horrible” for him, his children and his parents. He says he has been constrained from speaking out publicly, in part because he’s been cooperating with federal investigators who were building a case against Jeffreys.
“The only person who has accused me of anything is Greg Jeffreys,” he says, referring to depositions Jeffreys has given in which he blames Main for problems that arose with overvalued properties.
Jeffreys now faces 73 felony charges in a massive federal indictment that alleges bank fraud, wire fraud, theft and other crimes. He is being held without bail. His wife, Kim Jeffreys, and girlfriend, Shannon Stiltner, are also charged in the case; both have been released on bonds.
Several people who invested money in Jeffreys’ projects have sued Jeffreys and others, alleging the deals were fraudulently inflated by appraisals based on sham transactions that Jeffreys orchestrated. Main is not a named defendant in most of those suits – nor is he implicated in the criminal case. He also has remained friends with his partners in those investments, he says.
The allegations in the lawsuits, however, include claims that he participated in these sham transactions. The pattern depicted is this: Jeffreys would make an agreement to buy a piece of property, put down earnest money, and then “assign” the rights to the property to another party for much, much more money. This on-paper assignment, which never actually closed, would then be used as a comparable sale to drive up the appraised value of the property, which would then be used to attract investors and arrange financing.
In at least a couple of transactions at the Ridpath, Jeffreys assigned the property to Main. Main acknowledges that the assignments occurred, but he says that he did not conspire with Jeffreys to dupe anyone, and that he had the same information as the rest of the partners in the investment. He says he and Jeffreys had become good friends at the time, and he trusted him that the transactions were sound. Main says he invested more of his own money than anyone else. He understood the assignments as part of an overall picture in which everyone would make money – including “meat on the bone” for Jeffreys.
“Greg did that all on his own,” he said. “He’d say, ‘OK, this is the value on it.’ I took him at his word.”
Main now knows that was a mistake. At the time, though, the real estate boom had colored everything, he said. For some, it erased the idea that anything was too good to be true. Though there is plenty of blame to go around, Main is accurate in noting that the transactions depended on people with unrealistic expectations who did not pay much attention to what they were doing.
“Everyone was in a frenzy – including me,” Main said. “Everyone was telling us yes, go, do another deal.”
Like other investors, Main said he relied upon the fact that credible, longstanding professionals in the community – attorneys, appraisers, bankers – signed off on the agreements. He says he understands now that he should have examined the bones of the deals more closely.
Main eventually signed over his interest in the Ridpath properties to other investors in 2008. His financial collapse took a toll in the millions, though some of that figure was based on ownership of properties at boom values. His business failure came at a time of great turmoil – he divorced, remarried and moved to Italy for a while. He’s since returned to Spokane and left again for New York City, where he is involved in several projects involving technologies tied to the North Dakota oil boom, he said.
“We keep coming back here,” he says of New York City. “Because it seems like this is the place to build yourself back up.”