Spokane police move away from assigning investigators exclusively to fraud cases

In the past five years, the Spokane Police Department has moved away from assigning detectives exclusively to fraud cases as agency leaders instead bolster efforts to prevent burglaries and car thefts, along with violent crimes.

“We definitely are listening to the fact that people want property crimes, as well as violent crimes, reduced, and when they do occur, investigate them,” said Capt. Brad Arleth, head of investigations for the department. “Our mission is to reduce property crimes as well as keep violent crime on a down trend, so we do focus our resources on those two categories.”

In 2012, the department employed a dedicated unit of a single sergeant and four detectives specifically tasked with investigating fraud allegations. Those ranks fell to just two detectives the following year, and now the detectives have been divided among the city’s three precincts and the targeted crimes unit, which is tasked with investigating and arresting the city’s most prolific criminals.

“Those detectives go out and get these guys who are repeat offenders, chronic offenders, who are doing the same thing over again,” said Spokane police Chief Craig Meidl. “They will work some cases, but the intent for them is not to be going door-to-door, it’s to try and get ahead of these guys and arrest them before they go out in the community again.”

The gradual shift to assigning fraud cases at the precinct level, rather than employ a targeted unit to combating cases of fraud, occurred in the department after several high-profile scam artists, including payday loan shop operator Doris Nelson and real estate fraudster Greg Jeffreys, received federal indictments. Forbes magazine famously declared Spokane the “scam capital of America” in 2009, detailing a history of white-collar crime including Ponzi schemes, bogus business ventures and diploma mills.

Those cases were handled by teams of federal investigators, who eventually brought charges in U.S. District Court because victims were from across the country. Some fraud schemes require federal investigators, rather than local agencies, to work them, including cases where perpretators file fraudulent tax returns.

“Identity theft usually becomes a tax crime,” said Ryan Thompson, an IRS special agent based in Tacoma. “A lot of times, it’s us.”

But both Thompson and Ayn Dietrich-Williams, a spokeswoman for the FBI in Seattle, said their agencies accept fraud cases referred by local law enforcement agencies. Dietrich-Williams said the FBI has to prioritize cases, however, just like local law enforcement.

“If, in one week, 20 different fraud cases came in, and we have limited resources, we’ll focus on the ones that look like there’s really a high risk,” Dietrich-Williams said. “We’re just triaging the best we can.”

Jeffry Finer, a Spokane criminal defense attorney who represented Nelson in federal court for her sentencing, said federal agencies often look for the cases with the most money involved, or a large number of victims, to devote their resources.

“Little garden variety stuff would not get the attention of federal authorities,” Finer said. “It’s just too expensive.”

Finer said that despite the reassignment of the local fraud unit, he hasn’t seen any evidence that fraud-related crimes are running amok in the Inland Northwest.

“Nothing has really reached out and grabbed me that there was an open season in Spokane,” Finer said.

Answering that question empirically would be impossible, given the current amount of information available about crimes in Spokane. Local law enforcement agencies switched late last year to a crime-reporting system that captures fraud cases, part of a national mandate to move to the system by 2021. The previous system categorized property crimes as burglary, larceny, vehicle theft and arson, with no specific category for fraud.

Spokane’s shift away from assigning detectives exclusively to fraud cases mimics a statewide trend that began during the recession and downsizing of local law enforcement budgets, said Mitch Barker, the executive director for the Washington Association of Sheriffs and Police Chiefs.

“It’s a staffing issue,” Barker said. “It’s fairly common.”

The Spokane County Sheriff’s Office also does not have a dedicated fraud unit, but does employ several detectives in the agency’s investigations unit trained to deal with cybercrimes and identity theft, said Deputy Mark Gregory, spokesman for the office.

“We take property crime and these types of cases very seriously,” Gregory said.

The Spokane Police Department is close to receiving a staffing report that will focus strictly on the number of officers available on patrol, and how that matches with the public safety needs of the community. Arleth, the investigations captain, said he hoped that report would also illustrate the need for more detectives in certain areas of the department.

“Even internally, that should be able to inform us on what we would need to expand as far as the ability to do follow-up investigations, to support that level of operation,” Arleth said.

Federal agencies also aren’t diminishing their efforts to combat fraud crimes, Thompson, of the IRS, said.

“We’ve got a very healthy presence in Spokane,” Thompson said. “We’re keeping very busy with fraud cases. We have no intention of shutting anything down anytime soon.”