Two Face Charges Of Pocketing $350K From Investors For Foreclosure Investments; One Alleged Victim Borrowed $100K Against Home To Invest

In Whatcom County, Washington, The Bellingham Herald reports:

• A Whatcom County developer and a Blaine real estate agent are facing felony theft charges in connection with what prosecutors say was a scheme to steal $350,000 in a phony home purchase transaction.

• Ross Alan Paterson, 45, of Bellingham, and Victoria Mallahan, 47, of Blaine, face two counts of first-degree theft, with a maximum penalty of 10 years in prison per count. Both were arrested in late December 2008 and booked into Whatcom County Jail.(1)

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• In an affidavit filed in Whatcom County Superior Court, Deputy Prosecuting Attorney Dona Bracke said Mallahan and Paterson acquired the $350,000 in 2007 from three Canadian investors who thought their money would be used to buy foreclosure properties in Whatcom County for later sale at a profit. But Mallahan and Paterson kept the money and the investors got no property, the affidavit says. Nor did the investors get their money back.(2)

For more, see Whatcom County developer, real estate agent face fraud charge.

(1) According to the story, they have entered pleas of not guilty, and both also have denied wrongdoing in court documents filed in connection with civil lawsuits related to the case. They are free on $10,000 bail.

(2) Reportedly, in a sworn statement filed as a part of her civil suit against Mallahan and Paterson, investor Wanda Florczyk said she and her husband borrowed $100,000 against their home to invest with Mallahan, after they heard about her investment business from their son, a plumber. The son learned about Mallahan when he did some work for a business associate of Mallahan's.