KHQ EXCLUSIVE: Feds Investigate Local Developer - Spokane, North Idaho News & Weather KHQ.com

KHQ EXCLUSIVE: Feds Investigate Local Developer

Written By: Shelley Fontaine, KHQ Reporter

SPOKANE, Wash. - KHQ has uncovered court documents alleging two local developers may be in the hot seat with the federal government. On Monday April 4th Washington Trust Bank (WTB) filed a lawsuit against Cougar Palouse LLC and its managers Gregory and Kimberly Jeffreys. The suit claims the parties owe WTB more than $1.2 million plus interest for a loan. In the suit it states "Cougar leased certain real property to the United States of America." The terms of the lease required the government to pay Cougar more than $1.8 million after tenant improvements were made.

The suit claims that on February 3, 2011 the government transferred the money to the Cougar's account at Sterling Savings Bank and that the Jeffreys' acknowledged they received it but did not inform WTB of the action. From there it alleges the Jeffreys "stated to WTB numerous times after February 3, 2011, in telephone calls and text messages that they had not received any funds", and that "there was a processing error preventing the government's payment." The suit claims despite demands, that Cougar "has failed and/or refused to return the funds transferred by the government" and is a breach of contract.

KHQ left a voice message on Gregory Jeffreys' phone for comment, but has not heard back.

Sources close to KHQ said they last heard from G. Jeffreys during a conference call last week and suspect he may have left town to try and get the money back.  

On Wednesday afternoon KHQ spoke with Gordon Budke, of Budke Consulting, who said "we're as surprised as anyone" when learning of the suit. Budke said it's likely he will officially become manager of Cougar Palouse LLC, but will learn more at a hearing scheduled for April 29th. Budke and Jeffreys are connected through their work on the government property alluded to in the suit. Budke represents Campus Group LLC. The building is the Spokane Military Entrance Processing Station (MEPS) on the West Plains in Airway Heights.

G. Jeffreys has also been reportedly linked to Poachers Rock LLC, where published documents show he was a partner in buying the executive court portion of the former Ridpath Hotel. He has also been reportedly linked to a company called Sundevil Investments LLC.  According to a 2010 report in The Spokesman-Review, there was a lawsuit filed against both Jeffreys by a group of California investors. They alleged the Jeffreys used inflated appraisals to get investors for certain Airway Heights property.

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