Police captain leaves trail of legal troubles

Published 4:00 am Sunday, March 1, 2009

Editor’s note: This is the first story about the lawsuits involving Bend police Capt. Kevin Sawyer. The Bulletin will examine the real estate holdings of Kevin and Tami Sawyer at a later date.

Last month, the Bend police chief confirmed the FBI was investigating a police captain, his wife and their businesses.

As the FBI continues to stay mum on its investigation into Bend police Capt. Kevin Sawyer and his wife, Tami, one thing is clear about the Sawyers: The couple participated significantly during the Central Oregon real estate boom, taking out millions of dollars of loans, trading properties back and forth, and ultimately ending up with a number of properties in their names.

Their real estate holdings stretch from Oregon to Indiana and Mexico, involve more than a dozen banks and have left several investors wondering where their money went, a two-week examination of public records shows.

Their dealings have led to a half-dozen lawsuits, in which plaintiffs say the Sawyers owe them hundreds of thousands of dollars. One plaintiff says the Sawyers took their money and used it for personal gain.

Kevin Sawyer was hired by the Bend Police Department in 1979. He divorced current Bend Police Chief Sandi Baxter in 1990 and has risen steadily through the ranks of the department over 30 years. Most recently, he served as one of three captains, a position in rank directly below the chief. He oversaw investigations and support services.

On Friday, Baxter said Sawyer, who is on paid administrative leave, has given notice that he will retire. Baxter also said the FBI investigation has nothing to do with Sawyer’s work with the Police Department, and that the FBI has not requested any documents about Sawyer from her office.

But, Baxter noted Friday, there are codes of ethics police officers must follow, even when off duty.

“We have a law enforcement code of ethics, and when you’re sworn in, you repeat that,” she said. “We also have what’s called a policy … regarding our professional ethics and standards.”

She went on to quote the policy.

“A peace officer will conduct their public and private lives so that they exemplify the high standards of integrity, trust and morality demanded of members of the law enforcement profession,” she said. “The peace officer shall maintain conduct in personal and business affairs that is in keeping with” the level of the job.

If Kevin Sawyer’s business affairs turn out to have violated the department’s policies, Baxter said, his position with the department could have been in jeopardy.

Tami Sawyer, 45, was born Tamara Lynn Harris. She was married to Robert Dean Hunt and has three daughters from that marriage; the pair divorced in 1988, and she married Aaron Garcia in 1991. She divorced Garcia in 1995. She began using Sawyer as her last name on county documents in 2002.

At least as far back as 1990, Tami Sawyer worked as a real estate agent, according to divorce records; in those records, she also stated she was the owner of Bare Elegance, a lingerie shop in Bend. According to Secretary of State records, that company was registered to Sawyer’s home on Scottsdale Drive in northeast Bend through 2007.

According to other tenants of the building on Third Street, the lingerie store closed last year.

In 1991, Sawyer stated in her divorce records she earned about $440 per month from real estate.

The Sawyers, who said Friday they’ve been advised by lawyers not to talk about the investigation or the open lawsuits against them, have run as many as six companies out of two office buildings on Bluff Drive near The Old Mill District and their 4,222-square-foot house worth more than $900,000 on Scottsdale Drive. Their lawyers, Chris Hatfield, of Bend, and Mark Blackman, of Portland, also declined to comment for this story.

Currently, three of those Oregon companies are still active. The pair also are connected to companies in Delaware and Indiana.

According to Deschutes County clerk records, the pair own 20 properties in Deschutes County, many of which are rented. Through their companies, the couple owns another 27 properties, the bulk of which are lots in the South Briar development in southeast Bend. They’re real estate activity increased significantly beginning in 2002. Since then, they dabbled in short sales of foreclosed properties; they bought up millions of dollars of property for development. Now, three of their properties are in default.

While the Sawyers’ real estate dealings in Oregon have slowed in recent months, records show, their legal troubles have increased.

The couple has at least six civil cases open against them and their companies locally.

One of them is a probate trust lawsuit filed in October and currently under way in Crook and Jefferson County Circuit Court.

Thomas, Stephen and David Middleton have filed the lawsuit, concerned about their father’s trust. A document filed in March 2008 in Deschutes County shows their father, Thomas Middleton, gave Tami Sawyer power of attorney. The document was signed in October 2006. After Thomas Middleton died, Sawyer oversaw the sale of his home, which brought in $219,900.

In Jefferson County Circuit Court on Thursday, the Middletons’ lawyer, David Smiley, said he wanted to see any bank statements that would account for the proceeds from that home sale.

“If that $219,000 from the sale of the deceased’s residence ended up somewhere other than the trust account, we’re asking for copies of those statements to verify the receipt,” Smiley said by telephone during the hearing, noting that the statements he’s received don’t show that money anywhere.

“I’m concerned that these (bank statements) do not show any deposit of $219,000 that the trustee received from the sale of the residence. … $150,000 is alleged to have gone into her own company, but that leaves a lot unaccounted for.”

Smiley said in the hearing that depending on where the money is, “this is a little worse than we’ve anticipated in our wildest dreams.”

The next hearing in the case is scheduled for early April, but the court records have been sealed by Judge Gary Williams for reasons as yet undetermined.

While the probate case may be sealed for now, the five other lawsuits involving the Sawyers remain available.

Most recently, the Sawyers and one of their companies, Genesis Futures LLC, were sued for more than $300,000 by Community First Bank.

In the complaint filed Thursday, the bank states that it made five loans to the Sawyers and Genesis Futures of $370,200 between March and May 2007.

According to the lawsuit, the five loans are now all in default. Community First Bank seeks $153,489.60 from Kevin and Tami Sawyer on two of the loans, and also seeks $216,943.50 from both Genesis Futures and the Sawyers for the three other loans.

On Feb. 18, the Sawyers and Starboard, one of the Sawyers’ companies, were sued by Parris Menoni. In the suit, Menoni says she loaned the Sawyers and Starboard $136,668.23 for one year at 6 percent. The funds, Menoni says, were an investment to develop row houses in Indiana.

The funds were never repaid, the suit states. It further accuses the Sawyers and Starboard of commingling Menoni’s funds with other investors’ funds, and then using the proceeds for other properties and personal expenses and investments.

To Bend lawyer Martin E. Hansen, who represents another plaintiff suing Starboard in a separate lawsuit, the reference to investments is troubling.

“When you start selling pieces of something, that’s like stock. It’s a security,” Hansen said. “You have to have an SEC license. If you tell someone they’re a 10 percent owner in something, that’s a securities issue.”

Menoni’s suit says no Starboard security has been registered with any authorities and that securities were sold to other members of the public.

Included in Menoni’s suit is a copy of a promissory note signed by Tami Sawyer and a separate document describing Starboard’s activities. The document states Starboard was formed in 2004 as a company that purchases foreclosures, then updates them and resells them at a profit. When that concept became less profitable, the document reads, Starboard got involved in other investments.

“Currently, Starboard LLC is buying and developing residential properties locally, and in Indiana and Mexico,” the document states.

It goes on to describe the company’s properties, including nine homes in Redmond, two parcels on 27th Street in Bend, and a connection with a local builder to construct 34 homes on lots in the North Shire subdivision in 2007. It also details projects in Greensburg, Ind., for 200 row houses with rooftop patios and a nearly 10-acre commercial property.

Menoni’s lawyer, Craig Ingram, wrote in an e-mail that another client in Montana was also “suckered into their scheme.”

Others also accuse Starboard and the Sawyers of failing to repay them.

In January, Michael and Ondi Hibbs filed suit against the Sawyers and Starboard for a total of $95,677 plus interest. Ondi Hibbs worked at The Sawyer Five; the suit states that the Hibbses made a series of loans to the Sawyers and Starboard in 2005 and 2006, with an original understanding that they’d be paid back within a year at 12 percent interest.

Last May, David Redwine sued Starboard for more than $808,000. Redwine says in his lawsuit that the company borrowed $800,000 from Redwine, his wife, Laurie, and his pension plan.

Since filing suit, Redwine’s attorneys, Hansen and Michael McGean, have moved to compel Starboard to provide a variety of documents, including all records that show how loan proceeds were used by the company; any records that show how the loan proceeds were transferred by the company; and records showing where the loan proceeds are currently located.

Finally, there’s a 2007 suit by Redstone Development against Starboard and Megan Marie, another company owned by the Sawyers. That suit alleges breach of contract and says the companies owe Redstone more than $60,000 for work done on a property in Redmond.

In the first of three amended complaints, Redstone De- velopment states that Starboard’s transfer of the property to Megan Marie was a fraudulent conveyance; that is, that it was done in an intent to “hinder, delay or defraud” Redstone Development.

Several of these cases are slated to go to trial in the next few months. According to Hansen, if any of the plaintiffs gets a judgment, the Sawyers may be required to undergo a debtor exam, in which they must bring all of their records into the courtroom to determine where their assets lie.

But if many of the Sawyers’ properties have loans and mortgages associated with them, Hansen said, those would first have to be paid off, making getting any money out of the Sawyers’ assets difficult.

There are currently six open civil suits in Deschutes County involving Kevin and Tami Sawyer and their companies.

PlaintiffsDefendants DateDetailsCommunity First BankKevin and Tami Sawyer, Genesis Futures LLCFeb. 25, 2009The bank alleges it loaned the Sawyers and their company $370,200. It seeks $153,489.60 from the couple and $216,943.50 from both Genesis Futures and the Sawyers. Parris MenoniStarboard LLC, Kevin and Tami SawyerFeb. 18, 2009Menoni alleges that the Sawyers and Starboard failed to repay a loan of $136,668.23 and is owed the entire balance. Michael and Ondi HibbsStarboard LLC, Kevin and Tami SawyerJan. 20, 2009The Hibbses allege that they loaned the Sawyers and Starboard $188,000 and are still owed $95,677 plus interest. Thomas, Stephen and David MiddletonKevin and Tami SawyerOctober 2008The Middletons are suing the Sawyers over their father’s trust. Their father, who recently died, gave power of attorney to Tami Sawyer. Court records in this case are sealed. David Redwine and Laurie Turner-RedwineStarboard LLCMay 22, 2008The Redwines allege that the company has failed to repay $800,000 in loans. They seek $808,759.23 plus interest. Redstone Development and The Heritage Limited PartnershipStarboard LLC, Megan Marie LLC, Kevin and Tami Sawyer, Jade Excavation Inc. March 9, 2007Redstone alleges that the defendants’ companies Starboard LLC and Megan Marie LLC failed to pay for work performed by Jade Excavation, which Redstone ordered.

Source: Deschutes County Circuit Court documentsSheila Miller and Andy Zeigert / The Bulletin