November 21, 2013 in City

Greg Jeffreys pleads guilty to fraud

By The Spokesman-Review
 

Jailed developer Greg Jeffreys pleaded guilty Thursday to swindling millions from investors, banks and the federal government to fund a lavish lifestyle.

Prosecutors want him imprisoned for eight years and to repay duped investors millions of dollars on the four criminal counts of fraud and contempt of court.

Jeffreys reserved the right to argue the amount he must pay at a later court date.

Many of his building projects and investments were tangled into complex frauds that took investigators years to unwind. The vacant Ridpath Hotel and all of the financial problems that turned it into a highrise eyesore in the heart of Spokane have been partly blamed on Jeffreys.

The convictions close a year of legal posturing by Jeffreys and his girlfriend Shannon Stiltner.

She pleaded guilty on Thursday to charges she concealed a Ponzi scheme.

Her plea deal calls for a seven-month prison sentence and $58,000 in restitution to two people.

Jeffreys’ wife, Kimberly, continues to fight related criminal charges.

Investigators accused the group of pocketing millions from the federal government after building a military entrance processing station on Highway 2 for far less than was committed to the project by both the United States and private investors. The original indictment detailed a web of limited liability companies that drew investments from individuals for projects that never materialized.

Greg Jeffreys has remained in custody since his January arrest. In a statement during the Thursday afternoon court hearing, Jeffreys took the blame for the fraud and sought to downplay Stiltner’s role in the scheme.

While in jail awaiting trial he violated court orders by contacting Stiltner and urging her to sell property, pay debts and pass along messages to others on the outside.

Court records detailed a lifestyle in the fast lane for Jeffreys, a University High School graduate who owned a showy three-story home in Spokane Valley, as well as residences in Arizona, Las Vegas and elsewhere. Prosecutors say Jeffreys gambled away hundreds of thousands of dollars while sharing a suite with Stiltner at the Mandalay Bay casino.

Jeffreys is also implicated in the financial tangle that has kept the landmark Ridpath Hotel vacant for years. Additional charges filed in September accuse him of defrauding a bank to buy two floors of the Ridpath when it was sold off in pieces.

Investigators had alleged Stiltner became a skilled recruiter for Jeffreys, accepting wire payments of tens of thousands of dollars from investors and depositing the money in accounts she had established with several banks.

U.S. District Judge Rosanna Malouf Peterson heard from Kimberly Jeffreys on Thursday morning, who stated her intention to continue fighting criminal charges against her.

Peterson ruled in favor of Kimberly Jeffries’ request to keep jurors from hearing evidence the alleged money she stole from the federal government came from stimulus funds. Her trial is pending in April.


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