Ex-MetMortgage chief, SEC settle

The Securities and Exchange Commission has reached a tentative settlement with the former chief executive of Metropolitan Mortgage & Securities and with a Bellingham-based developer over fraud allegations related to the Spokane investment company's collapse.

The proposed settlement, filed Monday in federal court in Seattle, would require former Met CEO Paul Sandifur Jr. to pay more than $150,000 and barred from serving as an officer or director in any SEC-regulated company for five years.

David Syre, owner of Bellingham-based Trillium, would pay $50,000 to the SEC; his company would pay an additional $75,000.

The defendants would be permanently barred from violating securities laws, and the SEC would end its civil case against them.

The deal must be approved by U.S. District Court Judge John Coughenour.

The company, caught in a tangle of increasingly complex financial transactions designed to make it appear profitable, collapsed in 2004, leaving investors with more than $600 million in worthless securities.

The SEC's complaint, originally filed in September 2005, detailed deals in which Met sold land to Trillium and other developers.

The agency charged that Met, either directly or through its subsidiaries, disguised the fact it had financed all or most of the purchase price of the deals, so that it could improperly book the paper profits immediately.

In 2002, shortly before the end of its fiscal year, Met sold two vacant parcels in Everett and Texas to a Trillium-controlled entity called Jeff Properties for nearly $24 million.

Met also loaned the buyer most of the money needed for the purchase, replacing passive assets with supposedly profitable loans that would strengthen the company's numbers at a time it sought to raise money from investors.

In separate cases, the SEC in March settled civil fraud charges against former Met executives Robert Ness and Thomas Masters, who agreed to pay fines.

Dan Sandy, a business associate of Met and Trillum, also agreed to pay a $50,000 penalty.

Thomas Turner, former president of Met's sister company Summit Securities, was sentenced to two years in Jail on Oct. 12.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com

This story includes information from Seattle Times archives.