Miller defends state regulators' handling of mortgage firm probe

Despite pointed criticism of Walshaw and Senior Deputy Attorney General Doug Walther earlier this week, Miller said he is not about to fire Walshaw.

"As I understand it, the information (from the mortgage company) wasn't readily available and had to be developed over a course of time," Miller said.

"I know the attorney general's office has been reviewing it," Miller added. "As far as I know, he (Walshaw) has done a very good job. But I reserve the right to take a more careful look at it if necessary."

At a Tuesday hearing, several legislators questioned why it took a year for the state agency to shut down the mortgage company owned by Harmon, a former Assembly majority leader. During that time, the company continued to solicit investors.

The mortgage company has been placed in receivership. More than 400 investors, lured by promises of 15 percent interest returns annually, may have lost as much as $22.7 million.

In response to the company's collapse, the Legislature created the Subcommittee to Investigate Regulation of Mortgage Investments.

The subcommittee's chairman, Assemblyman David Goldwater, D-Las Vegas, grilled Walshaw repeatedly Tuesday on why he did not shut down the company until December.

Walshaw told legislators he did not have sufficient documentation from the company to win a case in court if he tried to revoke Harmon's license. He said the company failed to promptly provide the records he needed to examine.

While Walshaw and Walther told the committee that they lacked documents to close down the mortgage company, Deputy Commissioner Burns Baker in February 1997 called for them to do just that.

In a memo, Baker recommended the closure of the company and the issuance of a news release to advise the public about its problems.

Baker told the committee that he felt his state agency was being "spoon-fed information" by Harmon, rather than being given all the documents it wanted.

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