Thirty miles south of Salt Lake City, in the town Eagle Mountain, Utah, Richard Culbertson, whose real estate license was recently revoked over allegations of Real Estate Fraud, is still running for mayor. From Caleb Warnock at the Provo, Utah-based Daily Herald:

E.M. candidate charged with fraud

Casting himself as the hero in a vast conspiracy, Eagle Mountain mayoral candidate Richard Culbertson insisted during a candidate debate on Wednesday that despite state investigators charging him with real estate fraud, voters must choose him to protect them from land speculators.

Earlier in the day, the Utah Department of Commerce, Division of Real Estate issued a news release saying that Culbertson’s real estate license had been revoked by the state’s Real Estate Commission on Wednesday “over loan fraud.”

“Culbertson forged signatures, falsified loan papers and used a straw buyer in equity skimming scheme,” said state officials in a media statement. “According to the Division of Real Estate’s investigation, Culbertson admitted to using a ‘straw buyer‘ (i.e., using a false identity or the identity of another person) to purchase a home for his personal residence. He also admitted using a straw buyer to purchase other properties at artificially inflated values in order to obtain money in excess of the sales price and acquire cash at closing for his personal benefit.”

Speaking at the candidates’ debate at Eagle Mountain City Hall on Wednesday night, Culbertson put a different spin on the state’s action.

“When I determined that I would run for mayor of Eagle Mountain several months ago, it was because I felt that my hometown had fallen into the hands of land speculators who were systematically taking away the unique features that made us want to make Eagle Mountain our hometown,” Culbertson said, reading his statement to the crowd before the debate. “We would hold developers to their promises and prevent land speculators from reaping huge windfall profits by getting the City Council to remove established use restrictions. From the moment we took that position, a massive effort was undertaken to destroy our credibility with the voters by operatives of the land speculators.

“I have had my life investigated back to my birth with the intent to destroy me and those I’ve campaigned with. Anyone who thinks these recent events are not politically motivated is unaware of the history of this town. There are forces here that rival the politics of Chicago and New York City.”

Culbertson went on to say he believed his real estate transactions were “completely legal and ethical at the time. Though I fully believe the origin of this investigation was politically motivated, I have cooperated fully with the investigators and provided them with complete information.”

“In this process,” he continued, “it became evident to me that unless I alone took full responsibility for whatever had occurred, innocent people would be drawn into the investigation, being possibly charged with a crime and harmed for something that was completely innocent. I have alone accepted responsibility in order to protect the people I deeply care about and willingly accept the consequences, whatever that may be. The question now is, what will the citizens of Eagle Mountain do at the ballot box.”

Later in the debate, Culbertson said he had asked state investigators not to release their findings because news of their findings would damage his campaign. He said he believed that investigators had agreed to his request and was saddened that the state had allowed the fraud charges to come to light.

The Division of Real Estate said they had referred Culbertson’s case to federal and state authorities for review. Culbertson said he had not been contacted by the county attorney’s office or by federal authorities, but believed he was now the subject of a county attorney investigation. Daily Herald calls to the county attorney’s office were not immediately returned. Melodie Rydalch of the U.S. Attorney’s Office said she believed any investigation would be handled by the county attorneys.

According to state officials, “in at least one transaction, Culbertson diverted proceeds from the purchase of the property to a Limited Liability Company (LLC) to conceal the true terms of the transaction from the lender. As part of this fraudulent equity skimming scheme, Culbertson falsified loan documents, including forging signatures and providing false income information.”

Just hours before the debate, Culbertson was ordered to pay the Division of Real Estate a $40,000 administrative fine. The Real Estate Commission is a five-member licensing panel of real estate industry professionals.

“The Division’s investigation of Mr. Culbertson has uncovered numerous individuals involved in the same scam and the Division is moving forward to take action in those cases,” said Derek B. Miller, Director of the Division of Real Estate, in a statement to media. “According to the Division of Real Estate’s investigation, Culbertson’s actions are part of a larger loan fraud ring within Eagle Mountain and surrounding Utah County areas, involving real estate agents, mortgage lenders, appraisers and members of the general public.”

Eagle Mountain officials declined to comment on the alleged loan fraud ring. City spokeswoman Linda Peterson released a statement saying the city had only learned of the investigation from the state’s news release.

“The Utah Division of Real Estate has told us that to the best of their knowledge no Eagle Mountain city employees are subjects of this ongoing investigation,” said Peterson. “As we have no jurisdiction in this matter, we are unable to comment any further.”

In an e-mail to the Daily Herald before Wednesday night’s debate, Eagle Mountain Councilwoman Heather Jackson, who is opposing Culbertson for the mayoral seat, said “this is a very trying time for Richard and his family. I am sorry that our wonderful community of Eagle Mountain is once again drawn into the public eye for less than favorable reasons.”

But in the debate Jackson was a bit more pointed.

“I have said since the beginning of my campaign that I have nothing to hide,” she said. “I will stand as a beacon of honesty and integrity and do my best to stay out of the press in any negative way.”

When asked during the debate how he would improve the city’s image in the media, Culbertson said he would “promote the good things” of Eagle Mountain and develop a relationship with the media. “I never said I was a knight in shining armor,” he continued. “Ninety percent of people base their life on rumor and innuendo and other people’s opinions. If you are, please change.”

If the Utah Division of Real Estate’s allegations are to be believed–and I have no reason whatsoever to doubt them–and Richard Culbertson truly believed that using a straw buyer and enabling artificially inflated prices was within the lines, then there’s no better poster child for the renewed call for mandatory fraud education for Realtors than Richard Culbertson himself.