Forty miles of highway separate Ron Miller’s Bend home from his cattle ranch south of Prineville. Each drive he takes is another reminder of the financial mess he and his family have waded through for five years and running.

After fixing up and selling a smaller ranch near Tumalo in 2008, Miller gave the sale money to a Bend company specializing in tax-deferred real estate transactions, hoping to delay some of the taxes he’d owe on the sale.

Summit 1031 Exchange had a stellar reputation in Central Oregon’s real estate community. The company had offices around the western U.S. and a client list stretching from Oregon to Florida.

But by Christmas of that year, Summit 1031 was bankrupt. The $750,000 Miller and his wife, Nye, gave to the company was gone.

Last week, a federal judge sentenced three Summit co-owners — Mark Neuman, Timothy Larkin and Lane Lyons — to prison, after a jury convicted them of wire fraud and money-laundering conspiracies in July.

Neuman, a co-founder of the company, received a 61/2 -year sentence. Larkin and Lyons each received 41/2 years. They’re scheduled to report to prison in February.

Those sentences drew nearer to a close the legal fallout from Central Oregon’s housing market crash, and capped a year that saw 15 local real estate brokers, loan officers, bank employees, accountants, a construction business owner and a Bend police captain either head to prison or be sentenced.

But many of the victims from the Summit case and other Central Oregon real estate fraud cases are still fighting to recover small pieces of what they lost, of savings that took years to build.

Miller closed the deal on the Prineville ranch shortly before Summit’s collapse, borrowing money from friends who wanted to split ownership.

Without the sale proceeds from the Tumalo ranch, he can’t pay them back.

“I go out (to the Prineville ranch) every day and manage that property for nothing. For six years I’ve been going out there, and I haven’t made a dime off of that deal,” Miller said. “Not one of those SOBs ever called us and said they were sorry. Ever.”

An attorney representing Neuman declined to comment. Messages left with attorneys for Lyons and Larkin didn’t return messages.

Debbie Middleton is another victim of acts beyond her control. When her father-in-law, Thomas Middleton, died in July 2008, the proceeds from his $202,000 home were supposed to be split among his three grandchildren, helping them pay for college one day.

Instead, the sale money was transferred into a bank account tied to Bend real estate broker Tami Sawyer and her husband, Bend Police Capt. Kevin Sawyer.

The Sawyers were indicted on more than 20 fraud-related charges in 2010, after FBI and IRS investigators uncovered a trail of client funds the couple used for their own expenses and real estate ventures.

When the real estate market collapsed, about 20 clients of the Sawyers lost more than $4 million.

Tami Sawyer received a nine-year prison sentence in May. Kevin Sawyer was sentenced to 27 months.

But the jail time is little solace to Debbie Middleton, who said her family has received just $600 in restitution so far.

“What’s mind-blowing to me is they still have multiple rental houses that they have an income on,” Middleton said. “We’ve seen one tiny check.”

She’s not alone.

During the early 2000s, local real estate developer Barry Rowe made a pair of transactions with Summit 1031 without any problems.

But Summit’s December 2008 collapse came midway through Rowe’s planned purchase of a Bend office building, costing him time and money to unwind the deal.

“I really don’t believe they were trying to do something wrong from the start,” Rowe said of the Summit co-owners. “They were doing so many exchanges, and so much money was coming in. … They just got greedy.”

But Ron Miller said he wants longer prison terms for Neuman, Larkin and Lyons. He’s also upset the prison sentence of the fourth Summit co-owner, Brian Stevens, was shortened from 48 months to 13 months, after he testified against the other owners this summer.

“It took longer for the case to be tried than (the sentences) they got,” Miller said. “It’s just disheartening. I have no faith in the judicial system.”

The Summit owners, the Sawyers and employees with Bend-based Desert Sun Development all took advantage of Central Oregon’s red-hot real estate market over the last decade. None of the crimes came to light until after property values dropped and clients couldn’t get their funds back.

Discovering fraud before it becomes widespread is a challenge for law enforcement, especially when the perpetrators have a history of lawful business dealings behind them, said Van Pounds, securities enforcement chief with the Oregon Division of Finance and Corporate Securities.

“The right information might not be readily available” to help clients discover a shaky investment deal, Pounds said.

In 2010, the U.S. Department of Justice launched Operation Stolen Dreams, a multi-agency effort to crack down on mortgage-related fraud around the country. The Sawyers and Desert Sun defendants were among more than 500 people nationwide arrested in the sweep.

But with High Desert property values once again on the rise, alert clients need to be on the lookout for any investments that sound too good to be true, said Jeff Green, a Bend-based FBI supervisory special agent. Their vigilance can make the difference between a fraud case being exposed early on or running widespread for years.

“If you’re a would-be victim, and you’re savvy enough to spot a bad deal before you engage in it, well, that’s great, Green said. “But bring that information to light.”

— Reporter: 541-617-7820, eglucklich@bendbulletin.com