In a small business community, the effects of fraud, such as the crime allegedly perpetrated by a Ridgefield businessman, can be devastating, said an IRS investigator involved with the case.
Jeremy Richardson, owner of Jeremy Richardson Equities, has been accused of mortgage fraud, using his business as a cover.
Richardson was charged with wire fraud May 27 and federal mortgage fraud charges against him and three Portland men were announced June 19 by the Portland office of United States Attorney Karin J. Immergut.
When small towns are connected to big crimes, a sense of community can be lost, said Kenneth Hines, special agent in charge of the IRS’s criminal investigation Seattle field office. The office covers Washington and Oregon and was involved with investigating Richardson’s case.
“If you have people losing their properties with no one coming in and they go vacant, it just drags the local economy down,” he said. “You lose the sense of community.”
Cathy Weyand, owner of Ridgefield-based Weyand Mortgage, said she was saddened by the news of Richardson’s alleged fraud and is concerned that more people don’t report suspected fraud to authorities.
She said she has personally observed fraudulent activity in Ridgefield’s real estate and mortgage industries in the last 10 to 15 years.
Weyand said fraudulent activity especially affects a small community when it goes unreported. She has reported what she suspects is fraudulent activity to the state, but received little response.
“Unless there are five or six claims of the same thing, (authorities) don’t do anything about it,” Weyand said.
Richardson’s case is part of a national crackdown on mortgage fraud called Operation Malicious Mortgage, according to Immergut’s office. Federal Bureau of Investigation and the Internal Revenue Service’s criminal investigation division are working on the case with at least five other agencies.
As many as 100 fraudulent loans allegedly originated with Richardson’s company in 2006 and 2007, when Immergut’s office reported he may have falsified buyer qualifications and other information given to mortgage lenders.
Customers’ cash advances, which Richardson collected for property down payments, were allegedly used for his personal and business expenses, as was extra cash obtained through inflated property prices. To help justify inflated property prices, Richardson allegedly created false invoices for repairs on properties
Thirty-seven other U.S. metropolitan areas are making similar efforts.
Hines has worked on investment fraud cases for nearly 18 years. He said gut instincts are usually right when it comes to spotting fraud.
“If it just doesn’t sound right, if it sounds too good to be true, it’s probably not (true),” he said. “That’s the first line of defense.”
He advised against moving too quickly on property purchases or accepting property values without appraisals and building inspections.
“You have to be careful when they say the property will move fast,” Hines said. “You (could be) buying into an illusion and not an actual product of value. Ask for back up documentation.”
Richardson’s charge carries a maximum penalty of 30 years in prison and a fine of up to $1 million. It stems from a $50,000 transfer from a California investor’s Wells Fargo bank account to Richardson’s Bank of America account in Portland. Continuing and additional charges are likely, according to Immergut’s office.
Assistant U.S. Attorney Lance Caldwell, prosecutor in Richardson’s case, did not immediately respond to requests for an interview with the VBJ.
Charity Thompson can be reached at cthompson@vbjusa.com.
