Federal and state officials are close to a settlement with Bend-based real estate investment firm PAC Equities, a state investigator said Friday.

According to Bill Hansen, an investigator with the Oregon Division of Finance and Corporate Securities, PAC has been under a joint state-federal investigation for allegedly selling unregistered securities. Hansen said government agencies, including the U.S. Attorney’s Office in Eugene, have sent a draft settlement agreement to PAC’s lawyers.

”We’ve done everything on our side,” Hansen said. ”It’s up to them now whether or not to accept.”

Messages left for PAC owners Michael and Phyllis Rich at the company’s Bend office have not been returned, and the company’s attorney, Bob Weaver, declined to comment.

No charges have been filed.

Ned Powers, a PAC investor in Bend, said PAC has indicated to him that the firm has done nothing illegal.

A company selling securities is normally required to register the investment with NASD, formerly know as the National Association of Securities Dealers, according to U.S. Securities and Exchange Commission regulations.

Any investment of money in enterprises not controlled by the investors and with an expectation of profit counts as a security, according to federal law.

.

In a July 21, 2004, memorandum that PAC sent to investors, it states that ”the shares offered … have not been registered under the act or the securities laws of any state and are being offered and sold in reliance on exemptions from the registration requirements of the act and such laws.”

One exemption to securities registration involves investments from accredited investors, which are people with more than $1 million of net worth or people who have had more than $200,000 in income in each of the last two years. It is under this exemption that PAC is saying its actions are legal, according to Hansen of the Oregon Division of Finance and Corporate Securities.

PAC’s memorandum said the investment fund focused on commercial projects on the West Coast.

Hansen said that his department estimated PAC accumulated $17 million to $19 million in securities from investors.

Hansen said the investors he has talked to said they stopped receiving payments.

PAC has closed its Portland office, shut down its Web site and stopped selling investments. It also moved its office from downtown Bend to O.B. Riley Road, although that location remained open as of Friday.

Powers said he has discussed the situation with several others who had investments with PAC.

”I was getting questions like, ‘Should we sue?’ I told them, ‘Let’s wait to see what the government is going to do,’” Powers said.

Hansen said that the government agencies’ chief concern right now is the financial well-being of PAC investors.

”What’s important is protecting the investments of the investors,” he said.

Powers said he has only one concern.

”We just want our money back,” he said.