Fraud charges at Metropolitan Mortgage & Securities settled

The Securities and Exchange Commission has settled civil fraud charges against two former executives of Metropolitan Mortgage & Securities, a Spokane investment company whose dramatic collapse in early 2004 left thousands of investors holding more than $600 million in near-worthless securities.

The agency said Thursday that Robert Ness, the former controller of Met and sister company Summit Securities, had been permanently barred from violating federal securities-fraud laws and cannot serve as an officer or director of a public company, or appear or practice as an accountant before the SEC, for five years.

Thomas Masters, the company's former vice president for property sales and development, will pay $61,508 in fines and penalties. In addition, Dan Sandy, a former business associate of Met and Bellingham-based developer Trillium, agreed to pay a $50,000 penalty.

Masters and Sandy both also were permanently barred from violating securities-fraud laws.

The SEC's complaint, originally filed in September 2005, detailed a series of complicated land 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 that it had financed all or most of the purchase price of the deals, so that it could improperly book the paper profits immediately.

Charges are still pending against C. Paul Sandifur Jr., Met's former chief executive and controlling owner; Thomas Turner, Summit's former president; and Trillium and its owner, David Syre.

The trial is scheduled to start Oct. 1 in federal district court in Seattle.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com