Former Bothell mayor and 2020 gubernatorial candidate Joshua Freed has been charged in a series of lawsuits with deceiving investors, failing to pay creditors and embezzling money that was supposed to go to a development of townhouses in Kingston.

Freed, a longtime homebuilder, abruptly resigned as King County Republican Party chairman in early February, shortly after contractors and a lender sued him over unpaid debts.

Freed declined interview requests. In an email, he questioned whether the cases were newsworthy and called the lawsuits accusing him of wrongdoing “misunderstandings which have been dismissed”.

Several of the lawsuits relate to a 140-unit in-town development called Seaside Kingston, which has been under development by Freed for years, less than a mile from the Kitsap County town ferry terminal.

Some of the most serious lawsuit allegations overlap with Freed’s unsuccessful 2020 gubernatorial campaign, when he sought to become Gov. Jay Inslee’s Republican challenger. Freed placed third in the primary after investing nearly $700,000 of his own money in the contest.

A prominent Bellevue real estate investor, C. Edward Springman, accused Freed in a lawsuit filed last year of embezzling more than $2 million that Springman invested in the Kingston townhouse development.

Springman had been approached by Freed to invest in the project after running out of seed funding in mid-2019, according to the lawsuit. Springman agreed and invested $4.15 million in August, becoming the lead investor in the project.

But Freed didn’t spend all that money building the Kingston townhouses, the lawsuit says. Instead, he “embezzled” and “embezzled” more than $2 million “and gave it to several companies owned and controlled by Freed,” the complaint states.

The alleged hijackings took place in late 2019, a time when Freed was launching his bid for governor. On September 14 of that year, he loaned $500,000 to his own campaign. A few months later, Freed tried to get that money back, but broke a state law limiting those refunds. The money stayed in his campaign, and he was fined $25,000 by the state’s Public Disclosure Commission for violating campaign finance law.

In total, Freed contributed $687,000 to his 2020 campaign — including cash and in-kind donations — nearly half of the $1.6 million he raised.

According to Springman’s lawsuit, which does not mention campaign expenses, Springman discovered Freed’s deception in February 2020 and confronted him.

“Freed has acknowledged his actions and has agreed to repay by the end of 2020 any funds he improperly took. Despite this undertaking, Freed has not repaid the funds,” the lawsuit said.

In April 2021, Freed repaid approximately $1.2 million after selling a Bothell development to which he had diverted some of Springman’s money, according to the lawsuit. But Freed still owed $964,531, according to the lawsuit, which was filed the following month, seeking payment of that principal amount plus nearly 20% interest and court costs.

The Springman lawsuit, filed in King County Superior Court, named as defendants Freed and his wife, along with his companies Element Residential and Equity Holdings.

After lasting several months, the case was settled in late April, according to court records. Terms of the settlement were not disclosed, and Springman’s attorney Kevin Bay said he and his client would have no comment on the matter. These settlements often include non-disclosure clauses preventing the parties from discussing them.

Less than a month later, Timothy and Maria Sier, a married couple from Snohomish, sued Freed in a lawsuit alleging “fraud”, “negligent misrepresentation”, breach of good faith and “unjust enrichment”.

Freed had solicited a $300,000 investment in the Kingston project from the Siers around May 25, 2021, dangling a projected profit of 22% within a year, even though Freed was “knowingly insolvent at the time”, the May 3 trial in King County Superior Court alleged.

Within two months of the Siers’ investment, one of Freed’s companies began to default on payment to a drywall contractor and a lender, according to the lawsuit.

The lawsuit, which sought reimbursement of $300,000 plus interest and attorney’s fees, was voluntarily dismissed on May 12. No terms of settlement were disclosed. Arnold Willig, an attorney for the Siers, declined to comment.

In his email, Freed called the Siers and Springman lawsuits a misunderstanding, declining to discuss specifics.

In January, one of Freed’s companies, Skyfall LLC, went into receivership after a lender, BRMK Lending, petitioned Kitsap County Superior Court. The petition said Skyfall had defaulted on two loans associated with a Bremerton development and owed nearly $1.7 million.

In a receivership action, which is an alternative to a Chapter 11 bankruptcy, a court-appointed receiver is empowered to liquidate a company’s assets to pay creditors.

Four additional lawsuits were filed against Freed and its companies in February and March by building materials and glass contractors claiming they owed hundreds of thousands of dollars in unpaid invoices for products and services.

Before running for governor, Freed served three terms on Bothell City Council and was chosen mayor by his colleagues in 2014. While mayor, he drew public backlash for buying part of a local golf course to be developed following an option from the city to purchase the land. expired.

Stepping down as King County GOP leader in February after just over a year in the job — a move that surprised local Republican activists — Freed said he had “many new business opportunities in Washington and the ministries here and abroad” which he would focus on his family.

On March 22, Freed sold his family’s Bothell home for $3.85 million, property records show.

Meanwhile, the Kingston development, advertised as “a colorful cluster of brand-new modern townhouses” located “just minutes from the ferry terminal” and “miles of nearby sandy beaches” is gated and in large sterile part.

It was supposed to be finished by the end of 2020, but as of last week there was only one group of partially built gray and white townhouses with no landscaping, in one corner of the lot.

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