By Sharyn L. Decker
Lewis County Sirens news reporter
CHEHALIS – The owners of Birdwell Brothers Auto Sales, accused of using deception to steal hundreds of thousands of dollars from a Centralia-based bank, went before a judge today, following the filing of criminal charges.
Keith A. Birdwell, 47, and Lorrine D. Birdwell, 44, were accompanied by a lawyer who notified Lewis County Superior Court Judge James Lawler the couple had already worked out an agreement with the prosecutor that actual bail money wouldn’t be required.
“They are longtime members of the community,” attorney Daniel Garner said.
Lewis County Senior Deputy Prosecutor Will Halstead confirmed the couple could remain out of jail pending trial by each posting a $20,000 signature bond; a promise to appear for hearings.
Lawler approved the arrangement and ordered the Toledo couple to report to the jail to get their photos and fingerprints taken if not by 5 p.m., then tomorrow.
Garner said, outside the courtroom, he had no comment to make on behalf of his clients.
The Birdwells, who own a used car business with sites in Centralia and in Lacey, are each charged with one count of first-degree theft and five counts of felony unlawful issuance of a bank check.
The checks were allegedly written for several thousand dollars each over a period of three days this past July and returned for “not sufficient funds.”
The charges include special allegations the couple’s actions were major economic offenses with a high degree of sophistication.
The circumstances involve a form of a line of credit with Security State Bank, in which the unsold vehicles at the car lots were used as collateral for the loans, according to Centralia Police Department detective Sgt. Fitzgerald.
Charging documents describe how a bank employee conducting a check in July of the collateral could find only about 10 of the 55 vehicles which should have been on the car lots.
“The bank’s unrecovered losses on these ‘flooring’ loans was hundreds of thousands of dollars,” Lewis County Deputy Prosecutor Eric Eisenberg wrote in charging documents.
The “bad” checks – a secondary issue – caused the Birdwell’s business account at Security State to go into the red by more than $160,000, according to Eisenberg.
The police investigation began in August after the bank contacted police about the situation. Detectives secured several search warrants to examine the couple’s bank accounts and their home in Toledo.
Charging documents suggest the bank discovered a potential problem in July, but the ensuing investigation found the alleged deception on the part of the Birdwells began around the previous October.
Eisenberg describes the loans this way: In order to finance the cars available for sale on their lots, Birdwells had a line of credit with their bank, allowing them to stock their dealership while maintaining capital to acquire new vehicles.
Security State would make a so-called flooring loan on each incoming vehicle and Birdwells promised – in their contract – to notify the bank and pay off each loan within 10 days of selling the vehicle.
Birdwells also agreed to notify the bank of any change in a car’s location.
The bank would periodically inspect the lots to check on the unsold vehicles and offer new loans on newly acquired cars, according to Eisenberg.
The police investigation found examples of alleged misrepresentations on Birdwells’ part, such as allegedly obtaining loans on three cars they did not own, and in other cases, allegedly failing to notify the bank a car had been sold.
In those cases, they either acquired or maintained their flooring loan for weeks or months after the sale, charging documents state.
When a bank employee would visit the dealerships, the employee was told the car was at the shop, at another dealership or being sold at an off-site sale, the court documents allege.
“Birdwells would also pass one car off as another, to suggest it was still on the lot, when in fact it had been sold,” Eisenberg writes.
It’s more than just not being able to pay back a loan, which would be a civil issue, according to police.
“There is a space in there where it’s ambiguous, but they crossed that threshold when they began deceptive practices to keep the bank from getting its money back,” detective Sgt. Fitzgerald said.
It came to a head in July, when a bank employee discovered 21 vehicles were unaccounted for, according to charging documents.
Keith Birdwell explained that away, but the following day got a phone call from the bank’s president asking about the discrepancies and asking why the bank was not receiving loan payments after car were sold, according to the documents.
The charging papers give the following account:
The two set a meeting for July 24, but it was rescheduled for July 26.
However, on July 24, the bank conducted an unannounced “flooring check” and that’s when only about 10 of the collateralized cars could be found.
Beginning that day, Keith Birdwell allegedly wrote several checks from their Twin Star Credit Union account to their Security State account. The first one was for $29,750, all but one of the others were larger.
However, the Twin Star account – which for months had a working balance of $25 to $105 – did not contain nearly enough money to cover the checks.
The Birdwell’s representative told police detective Rick Hughes that Keith Birdwell expected to cover the checks with a loan from an associate. The associate told detectives he had not promised a loan, but had only said it would be considered.
Criminal charges were filed on Jan. 8. The Birdwells were summonsed to appear in court today.
First-degree theft, without the aggravating circumstances tacked on, has a maximum penalty of 10 years in prison and / or a $20,000 fine.
A court date was set for February 7 in which the Birdwells will appear before a judge again to make their pleas.