Metropolitan Mortgage

A federal judge has approved settlements between the U.S. Securities and Exchange Commission and several Metropolitan Mortgage and Securities Co. figures, ending the agency's sprawling legal action. C. Paul Sandifur Jr., the former chairman and chief executive officer of the Spokane financial conglomerate, will pay $150,889, which consists of a $75,000 civil penalty, the repayment of $60,000 to the company and $15,889 of interest.

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.

SEATTLE – Metropolitan Mortgage & Securities Co.'s financial auditors counseled executives of the Spokane company again and again about special accounting rules designed to prevent financial fraud, one auditor testified Wednesday at the criminal trial of Met's No. 2 executive. Yet one of the executives allegedly brushed aside the advice, orchestrated a questionable property sale, lied about it and got caught, according to federal prosecutors and the Ernst & Young auditor, a key witness in the trial.

SEATTLE – Federal prosecutors called a former executive of Metropolitan Mortgage & Securities Co. a liar who schemed to mask losses at the Spokane financial conglomerate by deceiving auditors. The executive's attorneys, however, tried to direct at least some of the blame for the company's failure toward those auditors.

The criminal trial of a leading executive of defunct Spokane financial conglomerate Metropolitan Mortgage & Securities Co. begins Tuesday in Seattle, three years after the company filed for bankruptcy amid an accounting scandal. Thomas Turner worked as president of Summit Securities Inc., a sister company of Metropolitan, controlled by common owner C. Paul Sandifur Jr.

Two former Metropolitan Mortgage & Securities Co. executives and a Rochester, Wash., businessman accused of fraud have settled lawsuits pressed by the U.S. Securities and Exchange Commission. The men, including former Metropolitan controller Robert Ness, a former vice president, Thomas Masters, and businessman Dan W. Sandy allegedly played separate roles in what federal investigators say was a series of corrupt real estate deals that inflated Metropolitan's profitability and hid the firm's deteriorating financial condition. The deception allowed Metropolitan to continue selling stocks and bonds to investors and escape regulatory scrutiny, according to the suit.

Lawyers and other professionals unraveling the tangled business dealings of Metropolitan Mortgage & Securities Co. have collected $19.4 million in fees and expenses during the past 21/2 years, according to company records and court filings. At least 28 law firms, outside accountants, tax consultants, public relations companies, insurance actuaries, turnaround specialists, expert witnesses, property appraisers and other companies were hired. It has been the largest and most expensive Eastern Washington bankruptcy. And the work isn't done.

Richard Ziehnert hurried to the trash can and started digging. At last he retrieved an unopened, nondescript envelope from Wells Fargo. Inside was a check for $263. It wasn't so much the money Ziehnert wanted. The $263 represented so much more: betrayal, loss, patience and finally payback. The check was his initial disbursement from his lost Metropolitan Mortgage & Securities Co. investments.

At last. After 31 months, 12,500 court filings and a full-scale federal accounting fraud investigation, Metropolitan Mortgage & Securities Co. is mailing checks today to the thousands of people burned by Spokane's worst corporate financial failure.