Freeland escrow company accused of bilking investors

A Freeland father and daughter, both principal officers in an escrow company, are accused of conspiring to steal and commit Securities Act violations, according to court documents.

The alleged victims, all Whidbey Island residents, lost tens of thousands of dollars because of the complicated schemes that go back seven years, the police report indicates.

Prosecutors charged Jenny A. Barrett in Island County Superior Court Nov. 5 with two counts of first-degree theft, one count of conspiracy to commit theft, one count of conspiracy to commit Securities Act violations and four counts of Securities Act violations.

John Barrett, 93, was charged with conspiracy to commit theft in the first degree and conspiracy to commit Securities Act violations.

All of the counts against the two defendants include aggravating circumstances, specifically that the crimes constituted major economic offenses, the defendants used positions of trust to perpetrate the crimes and the victims were “particularly vulnerable.”

If a jury finds that the aggravating circumstances occurred, a judge would be able to hand the Barretts sentences beyond the standard range.

The Barretts are principal officers in Barrett Escrow and Northwest Exchange and Trustee Inc., both corporations located in Freeland.

Essentially, the Barretts are accused of borrowing money from clients, promising to repay with interest and then not repaying the principal. The Barretts allegedly secured the loans with a 2.5-acre, commercial property in Freeland, which they re-conveyed — transferred unencumbered ownership — back to themselves without telling the clients and without repaying the loans, according to the report by Deputy Gene Martin with the Island County Sheriff’s Office.

One couple lost the principal of $164,000 and another lost $35,000, according to court documents.

In addition, a woman reported that she took money out of the stock market to loan the Barretts a total of $55,000. They did not repay the principal and the deed for the first loan had not been recorded, the report states.

Prosecutors also allege that Jenny Barrett acted as a securities promoter in relation to other investment loans with third parties in which the clients’ securities interests were undercut and the loans were repaid.

The alleged theft came to light after a man happened to speak to a real estate broker who was trying to sell the property that Barretts had used as collateral. He did a title search and uncovered the fraudulent re-conveyance, the deputy wrote.

If the Barretts are found guilty, the court could order them to pay restitution to the victims.