Two Phoenix police officers are on administrative leave and are facing civil penalties totaling $458,000 in connection with their real estate business.

The two lieutenants, Lee Brent Shaw and Mark Tallman, were transferred out of the South Mountain precinct, which serves Ahwatukee Foothills, last month in an unrelated Phoenix Police Department reorganization.

The Arizona Attorney General's Office reached settlement agreements with Shaw and Tallman last week in which neither defendant admitted any wrongdoing, but agreed to pay restitution to the homeowners, civil penalties, and attorney's fees and court costs.

Shaw agreed to pay nearly $200,000, while Tallman agreed to pay about $95,000, according to court documents.

"The Attorney General's allegations were always civil in nature and never criminal," said Tallman's lawyer, David Cantor. "If Mark had unlimited resources, we would have fought it, but he doesn't. He's been a good cop for 23 years."

The pair's real estate venture, Better Choice Investments, is liable for $148,000. But since the company has no assets, those penalties are moot, Cantor said.

"It's a dead judgment, and everybody acknowledges that," he said.

The Attorney General's complaint alleges that Shaw and Tallman took titles to homes after paying the homeowners' arrears on the mortgages, and allowed the homeowners to stay in the homes as tenants in a transaction known as a "sale leaseback." Almost all of the owners-turned-renters proved unable to repurchase their properties, at which time the officers sold or refinanced the homes at full market value, earning profits in the tens of thousands of dollars, according to a statement from the Attorney General's Office.

"Defendants obtained the homes through a foreclosure rescue scheme aimed at vulnerable, often low-income homeowners facing imminent foreclosure," the complaint states.

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