Embattled appraiser gets to keep license, but must pay fine, undergo training
| Thursday, Mar 04 2010 09:18 PM
Last Updated Friday, Mar 05 2010 09:38 AM
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Henry A. Barrios / The Californian Kirksey J. "Mark" Newton Jr., left, owner of San Joaquin Appraisals, goes before the State Office of Real Estate Appraisers during his hearing in January. Defense attorney Ernest Price is at right.
Appraiser Kirksey J. "Mark" Newton Jr. will get to keep his appraiser's license, but he has to pay a fine of more than $28,000 to cover the cost of the state's investigation into "errors and omissions" in his appraisal work and undergo additional training.
The California Office of Real Estate Appraisers had considered revoking Newton's license after scrutinizing eight property appraisals he either performed or signed off on, including work done for Tower Lending, the mortgage brokerage arm of Crisp, Cole & Associates, better known locally as Crisp & Cole.
The now defunct Bakersfield real estate firm is under federal investigation for alleged mortgage fraud. In 2007, the FBI and IRS raided 13 local sites associated with Crisp & Cole, including Newton's office.
Administrative Law Judge Samuel Reyes handed down his decision after a weeks-long hearing that began in Bakersfield and concluded in Los Angeles in January.
Reyes ruled on Feb. 24, but the state didn't officially issue the order until Thursday.
"On the one hand, there were multiple violations of USPAP (Uniform Standards for Professional Appraisal Practice) rules and requirements, including repeated violation of some of the provisions," the judge wrote. "On the other hand, these violations involve a small fraction of respondent's appraisal reports during the relevant period.
"Two of the most problematic appraisals were not actually prepared by respondent, and appeared to have been manipulated by a former employee."
Newton said his family would celebrate by going to Disneyland, but referred further questions to his attorney.
Defense attorney Eugene Suh e-mailed a statement that said after years of investigation, Newton was "happy and encouraged" to be "exonerated."
"From the outset, the attorney general, the OREA and the media accused Mark of being involved in a conspiracy to defraud the Bakersfield community," Suh wrote. "...As presented in our case, we believe the attorney general, the OREA and the media were misled into this hysteria against Mark by disgruntled competitors in the community.
"Judge Reyes acknowledged the lack of evidence of any conspiracy to commit fraud, and made specific findings that Mark did not commit any fraud or intend to deceive anyone. We feel that Judge Reyes reached a balanced decision."
Through a California Department of Justice spokesman, California Deputy Attorney General Gillian E. Friedman, who presented the state's case, declined to comment other than to say the state was reviewing the case.
The prosecution had argued that Newton time and time again issued inflated or otherwise inaccurate valuations. In some cases, he ignored homes constructed by the same builder in the same neighborhood in favor of comparing subject properties with homes much farther away.
Appraisers Gary Crabtree and his son-in-law, James Henderson, filed the complaints that triggered the investigation, saying Newton's appraisals were significantly off from comparable homes near the properties he evaluated. The defense portrayed Crabtree and Henderson as competitors who tried to taint Newton's name to get more work.
Crabtree on Thursday said he was disappointed by the decision.
"The judge ruled there were multiple violations ... including competency, ethics and multiple violations of standards, and in spite of the fact that the respondent has been appraising for over 16 years," he must learn the "very basics" of real estate appraisal, Crabtree said.
He added that he hoped Newton would "diligently apply himself" to his re-education process and become "a credit to the appraisal profession."
Newton insisted in the hearing that with the exception of some minor errors that did not affect the ultimate valuation, he stood by all but two of the reports prepared by his company, Bakersfield-based San Joaquin Appraisals.
The two exceptions were appraisals of 1902 Heaton St. and 1914 Three Bridges Way, both in Bakersfield. Newton testified that he did not review or sign off on those reports, even though they bear his signature. At least eight subordinates had access to a computer code that allowed them to affix Newton's electronic signature to documents, Newton testified, and one of them, Jaron Parks, was terminated for "manipulating" reports.
Effective April 3, Newton's license is technically revoked, but the revocation is stayed for five years, during which the appraiser will be placed on probation.
In the meantime, his license is suspended for two months, beginning May 3.
Newton must reimburse the state the $28,577.75 cost of his investigation and prosecution.
He also has to take a 15-hour basic education course on industry standards, complete 45 hours of additional basic education, and may be ordered to attend educational conferences at his own expense.
While on probation, Newton must log all his appraisals for review by the state.
Violation of any of those terms could cause the state to revoke his license. If he completes all of those requirements, however, his license could be fully restored after five years.
