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Developer’s ex-wife Kimberly Jeffreys sentenced in fraud case

WEDNESDAY, JULY 30, 2014

The criminal saga of a Spokane developer, his ex-wife and his girlfriend ended Tuesday when a U.S. District Court judge sentenced Kimberly Jeffreys to 90 days of home confinement.

The ruling completes the case of fraud, theft, money laundering and conspiracies that jailed Greg Jeffreys, his now ex-wife Kimberly Jeffreys and his girlfriend Shannon Stiltner in January 2013. Prosecutors tied the married couple and Stiltner to numerous real estate schemes around town, including fraudulent investments in the redevelopment of the Ridpath Hotel and theft tied to the construction of a military facility off U.S. Highway 2.

A fraudulent financial statement tied to the military project prompted a guilty plea from Kimberly Jeffreys earlier this year to one count of fraud. She was facing a potential sentence of 27 months in prison, though according to a plea agreement the government was only seeking six months of confinement and six months’ probation.

Jeffreys wiped tears from her eyes and hugged her daughter, as well as other family members, in a federal Spokane courtroom Tuesday afternoon after U.S. District Court Judge Rosanna Malouf Peterson imposed the house arrest. Greg Jeffreys and Stiltner had previously been sentenced to prison by Peterson.

“I’m not sure that you are all that similar to the other defendants in this case,” Peterson told Jeffreys before imposing her sentence.

Defense attorney Allen Bentley painted Kimberly Jeffreys as a devoted wife rocked by her husband’s affair with Stiltner, discovered in December 2011, when the false financial statement was signed.

“Kim stood by Greg through the ups and downs of their marriage,” Bentley said.

The false statement, indicating a net worth totaling $29 million, was used to secure loans for construction of a military entrance processing station from several area banks and other private investors. Restitution to those investors was handled through Greg Jeffreys’ criminal case. Peterson ordered him to pay more than $9 million in addition to the prison sentence imposed.

Kimberly Jeffreys told Peterson she was ignorant of the scope of her ex-husband’s schemes, after watching him build several successful car dealerships across the West in the preceding decades.

Investigators say Greg Jeffreys eventually brought Stiltner on board to help him recruit private investors for other real estate scams. She pleaded guilty to concealing Jeffreys’ schemes through ignorance and conspiracy in November and was sentenced to seven months in federal prison. She is scheduled to be released from SeaTac Federal Detention Center next month.

Greg Jeffreys remains in custody at the Spokane County Jail.

Kimberly Jeffreys spent three days in jail before she posted bond and was released. Bentley said she was sewing bridesmaid’s dresses for her daughter when FBI investigators arrived with a search warrant at the couple’s home in summer 2012.

Peterson deemed the three days Jeffreys served enough time to be incarcerated, based on the severity of her crimes. Jeffreys has until Aug. 31 to pay federal authorities $125,000 from the sale of property she owned in Arizona, and attorneys still are hashing out additional forfeitures that could total an additional $80,000 earned through the Ponzi scheme orchestrated by Greg Jeffreys.

Kimberly Jeffreys also will have to serve three years of supervised release once her home detention ends.

In a brief statement to Peterson, Jeffreys said she took “full responsibility” for the financial losses of her victims.

“I want to apologize for not paying attention to what was going on around me,” Jeffreys said. She added, “I probably could have stopped a lot of stuff if I would have started calling people and finding things out.”

Peterson cited Jeffreys’ strong family ties, as well as Jeffreys’ stated desire to finish coursework to become a certified hearing-aid professional, before handing down her sentence. Her daughter suffered hearing loss during a childhood illness, she told Peterson.

The sentencing caps legal proceedings in the fraud case that have spanned more than 18 months. Bentley acknowledged the lengthy process in his statements to the court Tuesday.

“Today, we mark the end of a long journey,” he said.



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