Tag: Fraud

Apartments
05/19/10 12:53pm

Fraud Arrests for Sham Condo Sales at the Kirby Lofts

by
Buying and Selling, Condos, Crime, Downtown, Fraud, Lofts
5 Comments

Converted from an office building to apartments in 2004 by NBC Holdings’ Tracy Suttles and The Randall Davis Company, the Kirby Lofts at 917 Main Downtown went condo a little later. How did that ball get rolling? The federal government’s Financial Fraud Enforcement Task Force suggests one answer: a few “sham sales” from January to October 2006. Indictments charging Veronica Frazier, Robert Veazie, and Felton Greer with several counts of conspiracy and wire fraud were unsealed Friday.

Frazier, 42, of Pearland, allegedly recruited buyers with good credit in 2006 to act as straw borrowers and use false information to apply for home loans, according to the U.S. attorney’s office. She and other unnamed co-conspirators then allegedly used the loan proceeds for themselves and to pay kickbacks to the fake borrowers.

CONTINUE READING THIS STORY

, , , , , , ,
Development Stategies
04/22/10 1:31pm

These Are the People in Le Voisinage: The Mark of Stanfordian Man on Upper Kirby

by
Houston History, Upper Kirby
2 Comments

Always on the lookout for striking images, art blogger Robert Boyd discovers an intriguing pattern in the map included in the listing of the nearby Fabulous Flea property discussed a couple of days ago on Swamplot. He asks:

Do you think the property lines of of those houses were deliberately designed to look like a man? (Sort of like the Vitruvian Man, don’t you think?)

Boyd dubs the pattern — found on the lower portion of the Upper Kirby blocks surrounded by Elbert, Bammel, and Sackett — “Elbert Street Man.”

But there’s a more direct reference. The anatomical property lines are the mark in Houston’s real-estate landscape of a much more well-known figure:

Allen R. Stanford.

CONTINUE READING THIS STORY

, , , , , ,
Crime
04/22/10 8:48am

The Case of the Unusually Helpful Contractor

by
Financing, Mortgages, Quicklink
4 Comments

THE CASE OF THE UNUSUALLY HELPFUL CONTRACTOR Melvin Lendall Brown, owner of a local unincorporated business he called Brownstone Construction, provided an unusually complete range of services to his clients. The Justice Dept. announced his guilty plea — to a single count of wire fraud — earlier this week: “Brown and others recruited and solicited individuals with good credit to act as borrowers in applications for residential mortgage loans to purchase one or more of those properties, even though the borrowers had no intention of making payments on the mortgage loans. Brown, aided and abetted by at least one other person, made representations to each borrower, including that he would buy the home in the borrower’s name, make any monthly mortgage payments, find others to live in the home and pay monthly rent, take the home out of the borrower’s name after a period of time as well as compensate the borrower. Brown and others caused Uniform Residential Loan Applications to be made in the names of the borrowers that overstated their employment income and other assets, understated or omitted their debts and other liabilities, falsely represented that the borrowers leased the homes in which they resided and received income from the rent, and falsely claimed that the borrowers intended to occupy the newly purchased homes. Because of the fraudulent information, the lenders made decisions to approve the applications and fund the loans. In support of those fraudulent loan applications, false and fraudulent documents were submitted, including sham lease agreements and bogus employment information. Brown also provided funds to the borrowers to use for deposits toward the purchases of those homes and for closing fees, and he often appeared with the borrowers at the closings.” [FBI Houston, via InSite]

, , , ,
Alief
12/23/09 3:27pm

The West Oaks Mall $87 Million Backward Flip

by
Buying and Selling, Commercial Real Estate, Malls, Retail
5 Comments

Who was it again that bought the West Oaks Mall out of bankruptcy earlier this month, for the bargain price of $15 million? Just an L.A. investment group called Pacific Retail Capital Partners. That firm’s principals, then with a company called Somera Capital, are the same people who sold the 1.1-million-sq.-ft. mall at Westheimer and Hwy. 6 in 2005 to Investment Partners of America, the “investment” vehicle of high-rolling 1031 Exchange king Edward H. Okun, after a quick 2-year spiff-up.

Okun paid Somera $102 million. Yes, that Edward H. Okun.

This time, the mall’s a whole lot cheaper, but it’s not in such good shape, either. Mervyn’s and J.C. Penney are gone. The rest of the mall is at 60 percent occupancy. “Over the past couple of years, several tenants tried to renew,” Somera Capital’s (and now Pacific Retail’s) Stephen Plenge tells Globe St., “and no one would return their phone calls.” The new owners say the Mervyn’s wing is likely to be redeveloped.

Photo of West Oaks Mall visitors: Joel Barhamand

, , , , , , ,
Comments
10/27/09 6:17pm

Comment of the Day: The Phantom Tollbooths of I-10

by
Fraud, Freeways and Toll Roads, Quicklink
2 Comments

COMMENT OF THE DAY: THE PHANTOM TOLLBOOTHS OF I-10 “Ahe yes, the technology of the HOT lane. I had the opportunity to reverse communte I10 last week all week and every day I was the only car to correctly stay in the toll lane as I went past the toll gate rather than seamlessly merging into the high occupancy lane [and then] merging back out after skipping the toll. It looked like a peloton of single occupant cars as we sped along. Do they actuially intend to enforce the high occupancy part of this system somehow at some point[?]” [Jimbo, commenting on Paying Tolls on I-45, 290, and 59]

, , ,
Comments
10/23/09 1:17pm

Comment of the Day: How We Beat the Zoning Boards

by
Crime, Development Regulations, Development Strategies, Quicklink
18 Comments

COMMENT OF THE DAY: HOW WE BEAT THE ZONING BOARDS “. . . I’ll have to plead the 5th as to how I came to understand this, but let it be known that city councils and P&Z boards can be bought over quite easily. All it takes is for a developer to contract the consulting services of a well-connected ex-councilmember at some ludicrious price and send him to town with a five-figure entertainment budget (which sounds like a lot, but isn’t in the scope of a $50 mil. project); meanwhile, the developer ensures that their first renderings contain a few blatantly offensive architectural features that the targeted politicians can criticize. The developer makes the changes requested (which they would’ve made anyway) so as that the targeted politicians can save face with their constituents. And the really dangerous part of all this is that once a politician is clearly in your pocket, it’s hard for them to say no to just about anything else in the future so long as the developer provides them with a mechanism to save face. . . .” [TheNiche, commenting on Ashby Highrise Loses Appeal]

, , , , ,
Apartments
08/21/09 7:37pm

Comment of the Day: I Was a Schmuck for Michael B. Smuck

by
Comments, Crime, Fraud, Leasing, Quicklink
2 Comments

COMMENT OF THE DAY: I WAS A SCHMUCK FOR MICHAEL B. SMUCK “. . . We, as managers, were forced to lie to residents about repairs as no company would sell us supplies. We had numerous occassions where trash service and water were stopped due to non-paynment. New residents were moved into dirty apartments with shoddy repairs, old uncleaned carpet and were expected to deal with it. All ‘extras’ tenents had come to expect were discontinued when MBS took over. I was also employed when our christmas paychecks bounced, although it didn’t happen at all properties. Forget a refund on your deposit as well. Even if the apartment was left in perfect condition we were forcefully told to find something to charge them for to keep all their money. Keep in mind all of what I experienced happened before Katrina — I was long gone by then. Working for those people made me leave the apartment industry for good.” [Laura, commenting on The Lodge at Baybrook: Smuck Survivor]

, , , , ,
1031 Exchanges
08/11/09 11:54am

Okun Gets 100 Years; How Many for the West Oaks Mall?

by
Alief, Buildings for Sale, Commercial Real Estate, Foreclosures, Fraud, Leasing, Malls, Retail
4 Comments

High-stakes real estate swindler Edward H. Okun was sentenced last week in a Virginia courtroom to 100 years in prison for absconding with about $126 million in funds entrusted to his qualified intermediary company by 1031 exchange investors. Meanwhile, back on the corner of Westheimer and Highway 6, one of his former properties went up for sale.

Okun’s Investment Properties of America bought the West Oaks Mall for $110 million in 2005. The sellers of the bankrupt property might expect to get $20 million for the million-sq.-ft. mall today, reports Globe St.‘s Amy Wolff Sorter:

The mall’s anchors include Dillard’s and Macy’s, which own their own space, and Sears, which is on a lease. [Holliday Fenoglio Fowler’s Robert] Williamson says the Sears lease is up in 2010, but negotiations are underway to keep the retailer in place.

When Okun bought the mall from Somera Capital and CoastWood Capital a little less than four years ago, the asset was 95% leased, and sported $10 million worth of exterior and interior improvements. IPA had even larger plans for even more renovations on the 33-acre site, Williamson says.

Less than a year later, the owner was able to secure $86 million of permanent financing for the mall. Yet by late 2007, IPA had filed for bankruptcy protection to stave off foreclosure. Okun’s troubles and a failing economy dropped the mall’s occupancy to a little less than 70%.

How’s the mall looking these days?

CONTINUE READING THIS STORY

, , , , , , , , , , ,
Bankruptcies
04/28/09 10:32am

Tracking the Disappearance of Antique Properties

by
Crime, Fraud, Furniture, Galleria, Redevelopment, Retail, Upper Kirby
8 Comments

Jerry and Wynonne Hart are scheduled to be sentenced today for “misapplication of fiduciary property” in the operation of their auction business at the Hart Galleries. In return for the couple’s guilty plea, prosecutors dropped charges of theft and money laundering.

11 News reporter Dave Fehling spoke to several former Hart Galleries customers:

The auction house thrived for years. The Harts enjoyed a sterling reputation among the rich and not so rich who all trusted the Harts to sell their valuables. But around 2003, something strange began happening . . .

. . . the Harts auctioned furniture and antiques for John Zielinski and his wife.

They were expecting to get $20,000.

“And I said, ‘where’s our money?’ And they said, ‘we’re having difficulty collecting some of the checks,’” said Zielinski.

The next thing Harts’ customers learned was that the couple was bankrupt.

CONTINUE READING THIS STORY

, , , , , , , , , , ,
Condos
04/09/09 1:40pm

League City Condo Trap: Bad Conversion at the Fairways

by
Foreclosures, Fraud, Hazards, League City, Real Estate Investing
No Comments

Just how did a group of Israeli investors get stuck with 114 condo units in this quaint converted apartment complex in League City? And why are they now suing the project’s developer and property manager?

The Galveston County Daily News‘s Laura Elder explains:

The investors never intended to live in the units but instead were seeking to generate income by renting them to others, according to the lawsuit. Through agreements, the units owned by the investors were put in a rental pool managed by the defendants, according to the lawsuit.

But while Westcorp Management Group, of which Roni Amid is vice chairman, had been collecting rent from tenants, it failed to pay proceeds to the mortgage company or the investors for some units, according to the lawsuit.

Without rental income, some of the investors are unable to pay their mortgages, leading lenders to begin foreclosure proceedings on at least 30 units in the complex, said Danny Sheena, a Houston attorney representing investors.

The suit also claims the defendants used the investors’ units at the Fairways at South Shore as collateral for a $23 million loan from Deutsche Bank obtained behind their backs last August. Which means, the suit claims, the investors can’t sell their units.

And that Israeli connection? Looks like it’s all in the family:

CONTINUE READING THIS STORY

, , , , , , ,
Comments
03/26/09 5:10pm

Comment of the Day: The Landlord Racket

by
Crime, Fraud, Leasing, Quicklink
No Comments

COMMENT OF THE DAY: THE LANDLORD RACKET “I commented to my wife the other day that, in light of foreclosures on rentals, if we decide to rent a house instead of an apartment we will have to demand the right to a credit report on the landlord. I guess we’ll want a criminal background check also :)” [MikeRG, commenting on Serial Renter Meets His Match]

, , ,
Crime
03/26/09 11:16am

Serial Renter Meets His Match

by
Fraud, Leasing, Quicklink, Stone Gate
5 Comments

SERIAL RENTER MEETS HIS MATCH There was something fishy about that home on Shady Canyon, Amber Rogers found out. She gave a $2500 deposit to Jonathan Soto, but it turns out he was renting out the same property to other people too. Cut to dual-renter ambush in Stone Gate subdivision: “Rogers says she hid in the garage and called 911. She came out right when Soto was giving his sales pitch. ‘When he turned around and saw me, I could have sworn he thought he saw a ghost. It almost knocked him off his feet. It was hilarious,’ Rogers said. Rogers says he tried to escape through a window. ‘I was the closest one to him. I grabbed him and I threw him into the wall,’ Rogers said. . . . Rogers says it was a good thing the police arrived when they did. Soto was carrying a gun, and according to her, he appeared to be reaching for it.” [11 News]

, , ,
Crime
02/17/09 11:46am

Feds Now Raiding Stanford Financial Group Offices in the Galleria

by
Fraud, Galleria
5 Comments

From the New York Times website this morning:

Shortly after 10 a.m. Central time, about 40 police officers and other law enforcement officials simultaneously entered Stanford Group’s two office buildings in Houston. Many of the law enforcement personnel carried large black briefcases. Stanford group’s headquarters are in two offices in Houston, one within a tower of the Houston Galleria shopping mall, and the other across the street.

Photo of Stanford Financial Group Offices, 5050 Westheimer: Stanford Financial Group

, , , ,
Apartments
11/07/08 9:49am

La Casita Apartment Takeover: How Does This Happen?

by
Foreclosures, Fraud, Hazards, Northline
2 Comments

Late last night city officials were able to get an emergency court order allowing a trustee to take over the La Casita Apartments at 313 Sunnyside near Northline. And MGC Mortgage, the company left holding onto the foreclosed property, has “transferred oversight” of the 600-unit complex behind Gallery Furniture to a new management company. The agreements, along with other interventions by the city, mean the more than 1,000 residents of the all-bills-paid apartments will not be evicted, have their water or electricity shut off, or lose credit for the monthly rent they just paid:

Residents of the La Casita Apartments already felt neglected by managers who let buildings run down, even before Hurricane Ike broke windows and tore patches off roofs. But instead of starting on repairs to make the apartments livable after the storm, management skipped town, keeping the rent money and leaving the bills unpaid.

The apparent owner of La Casita is an Indiana company named Briarwood Houston LP. The complex failed a Houston Housing Authority inspection last month. Police officials are investigating the management company’s handling of the payments.

, , , , ,
Alief
10/09/08 2:36pm

Delinquent Debt: West Oaks Mall Sale!

by
Commercial Real Estate, Financing, Foreclosures, Fraud, Malls, Openings and Closings, Quicklink
4 Comments

DELINQUENT DEBT: WEST OAKS MALL SALE! Here’s another chance to clean up some of the wreckage left by mysterious investor Edward Okun: “West Oaks Mall in Houston . . . has $81.3 million in delinquent debt attached to it in the form of commercial mortgage-backed securities. Joseph Luzinski, the federally appointed bankruptcy trustee for West Oaks Mall, said he hopes to sell the mall by year’s end, though store closures continue to hamper its value. [The mall] . . . is about 80% occupied, having lost a J.C. Penney, Linens ‘n Things and Whitehall Jewelers. The mall recently cut a deal to keep its Steve & Barry’s LLC store open amid that retailer’s bankruptcy. The special servicer for the mall’s debt, LNR Partners Inc., attempted to foreclose in September 2007, but Mr. Okun forestalled the move by putting the mall into Chapter 11 bankruptcy protection the next month. A federal grand jury indicted Mr. Okun on fraud charges last March after his 1031 Tax Group LLP, a company that helped facilitate tax-free real-estate deals for small investors, collapsed into bankruptcy and didn’t return $132 million of investors’ money.” [Wall St. Journal; previously]

, , , , , , , , ,
« Previous Page Next Page »