CEO'S housing woes spread across 3 counties

By Kristi Pihl, Tri-City HeraldMarch 8, 2014 

Michael Spitzauer lives on the brink of foreclosure.

While officials work to evict his company from the Port of Pasco and Franklin County auctions off some of its equipment to pay unpaid taxes, Spitzauer and his family face losing their two homes in Kennewick and Issaquah.

A third house in Snohomish was sold at a public auction.

Now the federal government is trying to seize their $1 million Kennewick house as part of Spitzauer's criminal case.

U.S. attorneys claim Spitzauer bought the 16-room home in 2008 using money he allegedly stole from a Slovenian manufacturer, Exoterm.

But the federal government isn't the only one in line for the 5,200-square-foot house.

The mortgage company and Benton County have almost foreclosed a total of seven times because of unpaid mortgage payments and property taxes. The Kennewick Irrigation District also is owed money.

Spitzauer has argued in court documents that the home does not belong to him, but rather it's owned by a trust for his four children.

However, federal prosecutors argue and state documents show that Spitzauer has acted as the manager for his children's trusts.

The Spitzauers owed about $22,000 in back mortgage payments and late fees when the home was almost foreclosed on a year and a half ago.

Between 2010 and 2012, they came up with enough cash to reduce the principal owed to $272,400.

Benton County officials also have come close to foreclosing three times on the home for unpaid property taxes.

Each time, just enough of the delinquent property taxes were paid to prevent the house from being sold, according to county records.

Benton County is owed almost $45,000. Officials will decide later this year if they will foreclose on the property.

The Spitzauers also owe KID about $4,300 for the past three years. The district can foreclose on properties for nonpayment of assessments, but has yet to do so in this case.

The Issaquah home, which the Spitzauers bought for $690,000, and his Snohomish home each have almost been foreclosed on six times in a decade.

The Snohomish house, with three bedrooms and 2,500 square feet, was finally sold at a public auction two years ago for about $366,000 to repay the mortgage company.

And King County Auditor's records show, as of last year, the Spitzauers owed more than $221,000 in late mortgage payments and fees on their four-bedroom Issaquah house. They still owe $503,500 on the principal, not including interest.

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