UPDATE: The state Department of Financial Institutions says it is investigating Woodruff for possible violations of the state Securities Act, which regulates how businesses sell investments. “The investigation is ongoing and I am unable to comment,” says Bill Beatty, head of DFI’s securities division. As many of us know now, the real estate meltdown was aided and abetted by inside players. Even bankers–such as Pierce Commercial Bank’s Shawn Portmann, featured in our Jan. 12 cover story–didn’t merely turn a blind eye to mortgage fraud; they actively engaged in it, according to the feds. Yet many others participated in real estate scams–including, a source tells Seattle Weekly, an Oregon pastor who worked his Christian connections and used Pierce Commercial for his deals.The pastor–Joe Woodruff (pictured above) of Beaverton New Vision Fellowship, a Free Methodist church– recruited straw buyers for a Nevada housing development, in the process facilitating loan applications using false information, according to Martin West, a Puyallup resident who says he was such a straw buyer. The Oregon pastor also collected hundreds of thousands of dollars in investment for his real-estate dealings from West and others, much of which was lost, West says. Woodruff has not returned phone calls seeking comment. West is a pastor himself at an Issaquah church called Trinity, and he says he first met Woodruff some 20 years ago when both were junior pastors at a Puyallup church. They reconnected a few years back when Woodruff returned to Puyallup after stints at various churches on the West Coast.Woodruff had interrupted his pastoral career to launch a real estate business, West says. “He was driving a Mercedes Benz and living in a half-million-dollar house.”Over coffee, West says, Woodruff told him he was working with a builder in Nevada. West could buy one of the new homes they were building. He wouldn’t have to put any money down. Woodruff would take care of the house payments by leasing out the property. And after a year, Woodruff would buy back the home, giving West a 6 percent profit.After West agreed, he says Woodruff steered him to Pierce Commercial, where a loan officer named Chris DiCugno took care of the loan. DiCugno pled guilty late last year to fraud in connection with a mortgage scam run by another real-estate “investor” by the name of Mark Ashmore. At Ashmore’s trial, DiCugno said that he was introduced to Ashmore though Woodruff, who was not charged in that case. Little Friends of PrintmakingTo get the loan approved and to make it look like West had more money than he did, he says Woodruff deposited around $15,000 or $20,000 into his bank account. As SW’s cover story on Portmann describes (see cover image at left), this was a common practice at Pierce Commercial, known in the bank’s parlance as “seasoning.” “We do it all the time,” West says Woodruff told him. “This is the way business is done.” West got the loan but ruined his credit record. As the real-estate bubble was bursting, Woodruff stopped making payments on the Nevada home, which was eventually subject to a “short sale” (in which the home is sold for less than the mortgage on it).Worse, West says he refinanced his home to invest $218,000 in Woodruff’s business, known as Premium Equities. He says Woodruff never paid him any return on that money. West says his son and sister also lost money with Woodruff. So, he says, did a friend who bought one of the Nevada homes and only later looked carefully at the loan application. “The documents said I’m making $100,000,” West says he was told by his friend. “My God, I’m a junior-high-school teacher.”Last February, West and his wife Natalie filed for bankruptcy in Oregon. West is listed as a creditor. The Office of the U.S. Trustee challenged the bankruptcy application. Woodruff had reported $60,000 or less annual income since 2008, a complaint by the trustee noted (see pdf). And he and his wife claimed they only had $1,000 in cash–bizarrely kept in their refrigerator, according to their remarks at a meeting with creditors. Yet Woodruff and his wife also acknowledged having recently run two real estate businesses, including Premium, which took in $700,000 since 2004. They also bought a 32-foot yacht for $175,000, the complaint noted. The trustee therefore accused the Woodruffs of underreporting their income or otherwise lying on their bankruptcy statements. The trustee’s complaint became inactive when the Woodruffs withdrew their bankruptcy petition in December. West says he and others have complained about Woodruff to the FBI, the Washington state Department of Financial Institutions and the Oregon Conference of the Free Methodist Church, but have seen no action from any of those organizations.”People are wanting to know why this guy is still walking the streets,” West says.