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Thursday, October 22, 2020  Spokane, Washington  Est. May 19, 1883
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Sirens & Gavels

Gamblers plead not guilty in $540,000 theft

A Spokane couple who described themselves to police as successful gamblers are accused of stealing nearly $540,000 from a Spokane rental agency.

George L. and Kathy A. Bagwell pleaded not guilty to three counts of first-degree theft today.

The couple had worked for real estate owner Rex Williams since 2001; they took over management of his Spokane assets after after his parachute failed to open and he fell to his death during a skydiving excursion in Texas in March 2008.

But the charges recently filed in Superior Court allege the theft began while Williams was still alive. The couple is accused of stealing $151,945 in 2007. Further charges allege they stole $242,642 in 2008 and $151,672 in 2009.

The Bagwells are described as heavy gamblers who frequented Northern Quest Casino at least twice a week. Both have extensive tattoo work court documents imply may have been paid for with stolen cash. Williams' son-in-law Adams Pospychala, told police George Bagwell, 43, bragged about his gambling.

"George bragged about expenditures including a Jet Ski, fighting show tickets and tattoo conventions in Las Vegas," according to a probable cause affidavit filed in May. The affidavit says the couple withdrew nearly $25,000 from casino ATMs between February 2008 and June 2009. George Bagwell dropped $334,031 in Northern Quest slot machines between January 2007 and July 2009;l Kathy Bagwell, 37, placed $104,216, court documents say.

They claimed $20,000 in winnings on 2008 tax forms, and $10,000 on 2007 taxes.

The Williams family owns three apartment complexes in northeast Spokane with 304 apartments: the Lyons Crest, the Lyons Glenn and the Lyons Ridge apartments. In summer 2009, Williams' daughter Chaundra Williams-Pospychala noticed a sharp drop in cash flow from the properties — $30,000 to $50,000 a month since at least April 2009. She then noticed the Bagwells accepting rent payments in cash without depositing the money. Police began searching the Bagwells' bank records shortly after.

A civil suit against the Bagwells is set for trial in September.

Kathy Bagwell described herself to police as "a very successful gambler."

In an interview with police, George Bagwell "appeared tearful" and "expressed their great fondness of Rex Williams," according to court documents.

He reportedly said Rex allowed them to take $6,000 from rent money "in order to qualify for their home mortgage."

"George claimed the owners demanded they manipulate the rent rolls in order to look good for the bank," according to the affidavit. "George said money has been very tight since the kids took over the company. Staffing and maintenance has been cut."

Past coverage:

July 21, 2009: Couple accused of fraud to fund gambling habit

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