Metropolitan Mortgage

Key figures in the Metropolitan Mortgage & Securities Co. accounting scandal have reached deals to settle costly lawsuits filed by the U.S. Securities and Exchange Commission. Among them: C. Paul Sandifur Jr., owner of the Metropolitan group of companies, whose stubborn leadership style and questionable business acumen have been blamed for the collapse of the $2.3 billion financial conglomerate.

A settlement requiring auditing firm Deloitte & Touche to pay $167.5 million to a special trust recovering money for Adelphia Communications Corp. creditors provides some buoyancy to the difficult task of recovering money from two large firms that audited Spokane's bankrupted Metropolitan Mortgage & Securities Company Inc. A trust established to collect all possible sources of cash for thousands of Metropolitan investors is now engaged in arbitration with Ernst & Young, and has sued PriceWaterhouseCoopers in U.S. District Court in Spokane.

SEATTLE – A federal jury convicted former Metropolitan Mortgage & Securities Co. executive Thomas Turner of three felonies Friday morning. It took the jury several hours to reach its guilty verdict in a complicated case that boiled down to whether they believed Turner was an honest dealmaker for Metropolitan. They didn't and convicted him of lying to and hiding information from Metropolitan's outside auditors, Ernst & Young LLP.

SEATTLE – Former Metropolitan Mortgage executive Thomas Turner is either a scapegoat for shoddy and negligent auditing work, or a sophisticated white-collar criminal.

SEATTLE – Former Metropolitan Mortgage & Securities Co. executive Thomas Turner testified in his criminal trial Wednesday that he was only doing the bidding of his boss, C. Paul Sandifur Jr., when he signed off on a controversial real estate deal that helped bring the company down. Turner, 56, said Sandifur and another Metropolitan executive, former Controller Robert Ness, as well as the outside accounting team of Ernst & Young LLP, knew the details of the troubled 2002 real estate deal that exploded into an accounting scandal in the weeks leading up to Metropolitan's bankruptcy. Yet only Turner has been charged with crimes.

SEATTLE – Metropolitan Mortgage & Securities Co.'s former auditor Jack Behrens once told the U.S. Securities and Exchange Commission that he thought just about everyone in the defunct Spokane company was untrustworthy. Lawyers defending former Metropolitan Mortgage executive Thomas G. Turner seized upon Behrens' statements from 2004 to tell a jury that he was trying to deflect all blame for a major accounting scandal from his firm, Ernst & Young LLP.

SEATTLE – Ernst & Young LLP charged Metropolitan Mortgage & Securities Co. a hefty $1 million each year for auditing services, betting its reputation that it could handle a firm that was losing money and known for risky business dealings. The accounting firm also charged the Spokane financial conglomerate for tax advice and business consulting services.