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Political and professional pressure is mounting for the Arkansas Real Estate Licensing Commission to launch an investigation into the controversial sale of two downtown Little Rock office buildings. Details of the transactions released by federal prosecutors led to additional charges of tax evasion and tax evasion conspiracy against Sen. Nick Wilson, DPocahontas, and his former law partner, Murrey Grider.
The indictment also raised allegations against one of the state's most well-known figures in commercial real estate, John Flake.
Though unnamed in the indictment, Flake was the broker in the two deals in question: the $ 11.6 million sale of the Union National Bank Building in 2004 and the neighboring $ 5.9 million Atkins Building in 2006 to the Arkansas Public Employees Retirement System.
The indictment alleges the broker in these deals paid more than $ 300,000 in referral fees to Grider's D.M. Riche Inc., money that was subsequently funneled to Wilson.
According to Arkansas Real Estate Commission officials, neither Grider, his company nor Wilson have ever had a real estate license that would entitle them to collect such a fee or share in the sales commission.
As portrayed in the indictment, Flake twice violated Arkansas real estate law by doing business with an unlicensed real estate broker. For now, Wilson, Grider and Flake have nothing to say about the transactions undergoing scrutiny by prosecutors and the public. Flake's variant on the "no comment" theme is a now-familiar mantra of "On anything related to a third-party transaction, we never say anything." If the transactions between Flake and Grider/Wilson are above-board or details of the transaction contained in the indictment are inaccurate, Realtors don't understand why Flake doesn't step forward and explain what really happened.
In the absence of this, the calls are going out for the real estate commission to investigate whether he indeed violated Arkansas real estate law. For now, the commission is content to merely watch developments in the federal case. There is no investigation nor any plans for one.
"We know the allegations, as far as the licensee (Flake) is concerned, and we're looking into the matter," says Bill Williamson, the commission's executive director.
It would be unusual if the commission actually exercised its authority to look into the matter on its own initiative. "Normally, that's not the way it works," says Herb Yarbrough, immediate pastpresident of the real estate commission. "It typically takes a complaint to generate an investigation, and that is no guarantee the commission will take action."
Yarbrough has fielded phone calls from concerned real estate brokers asking what is being done about Flake's apparent violations. During his three year stint as a real estate commissioner, Yarbrough doesn't recall an instance of an unlicensed agent coming under scrutiny.
"I believe it is generally known that a fee is not to be paid to anyone who is not licensed," he says. "You don't get into paying money to unlicensed people. You're just inviting trouble.
"Someone could say they didn't know they were dealing with an unlicensed person, but the rebuttal to that is all it takes is a call to the commission to find out."
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