WARNING: Harbor Funding Group
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Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17yI can add some actual info to this thread. There are several boiler room operations out of Ft. Myers FL and Gulfport MS that ran ads on the internet for the go zone. They put on seminars and took you to see properties in MS that they would build for you. Most were in Bayside Park, an old downtrodden development in Bay St. Louis, MS. It all looked good and you'd be told by a lender, Harbor Funding by way of C & W funding they'd get you a loan for x amount. This would cover the const, points and when it closed, you'd receive a rent guarantee and decor allowance of 10% back in your pocket, basically 90% loan.
Example-$240K duplex . You place $24K with the developer, Blue OAK CONST (had other names before) who then placed funds into escrow with JPO Title . This is where it gets wierd.
Harbor Funding then requested the funds to go to their escrow agent, Michael D. Garber, a NY and NJ attorney from JPO. The wizard pulling the strings behind the curtain of Harbor Funding is Bill Lange, and supposedly,he requested the funds from Garber. It appears he received them and used them to leverage with a hedge fund overseas by putting up millions to get hundreds of millions to lend.
The developer continued selling pre builds based on the info and potential loans from Lange. I "purchased" 2 duplexes from Blue Oak-Gulf Stream Dev and sent them $48,000. I've been trying to get money back for 6 months. Garber has had his accounts frozen by the Bar in NJ. Lange has now disappeared from Seattle but keeps promising a return of my funds.
I don't know if I'll ever see my $ and I don't know a sINGLE investor that has had a closing on property through these guys. There are still some of those involved above ground in Ft. Myers, and still doing seminars, now selling foreclosures in SW FL.
Be very careful. These folks are in over their heads, or crooks, or slick or all of the above. I have lots of info on all this and would love to join any action or furnish my info to the investigators or FBI. It is a can of worms.
As to any assets of Harbor Funding. Lange pledged a LOT of funds and the ruse was a goldmine or gold stocks he had plus the cash. He closed his office last week and did give me the new phone # for him, but I haven't tried it yet.
Scott- the investigation needs to start right where you are with Garber. He is the key to knowing where the money went. There is an attorney /lender in MN that is out 800K and thinks he'll see his funds returned from the court. He doesn't return calls now. He quoted me 3K to file my request with the court, but I'm not sure he's received anything nor whether Garber or Lange has the funds!!
JPO title is no longer where they were in Ft Myers. I think everyone is scrambling for under ground.
Hows' that for more info on this mess? Rich.
198 Replies
- Investor · Louisville, KY · Member since 2011 · 1k+ posts · 1k+ votes11y
Sounds like we should keep an eye out for @Rich Weese and/or @Scott Allan on an upcoming episode of American Greed!
- Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes11y
No one will care more about my money than I will.
When times are good, every cockroach around will come out of the dark to make promises they can't keep in an effort to take what doesn't belong to them...at least until it's given to them.
Never invest in others more than you can lose without losing sleep.
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes11y
Guy- I agree with you 100%. No one will ever take better care of your money than you. I don't think I have lost any sleep over the $48,000 that I appear to have lost in trying to buy into the accelerated depreciation program that was available in the Biloxi area. It has been so long ago I can't even remember what the program was called, but it was put together by the government to help speed up the rebuilding of that area after the devastating hurricane hit it.
Michael-I'm not sure what to make of your e-mail about Scott and I appearing on American greed. I certainly didn't make the investment in that area to make money. I seriously may be investment to provide housing that was necessary at that time and the significant accelerated depreciation that was available for building their at that time. I really didn't care if I made any money or not. I have substantial income coming in from various other real estate ventures and I was simply trying to offset it with advanced depreciation.
I have chosen a new way to do that since 2008. I buy relatively good-sized apartment buildings and then pay for a cost segmentation study which allows tremendous depreciation in the early years. Then, when that advanced benefit is used up, I look to exchange the building by method of 1031 and continue staying ahead of the game. This will normally cover the majority of the income made from the apartments in cash flow and also offset additional income made from building spec houses in Texas and Florida.
Lew- I really don't know what you were attempting to say either. I have been extremely open on this venue for many years. One of the reasons I don't post very often anymore, is the nit picking and the need by many posters to attack messengers as well as the messages that appear on bigger pockets. I realized that can happen anywhere but for me it is the main reason I don't post very often. I do try and follow-up with replies to threads that I have been involved in in the past.
Carlos- I don't know of any money that has been recovered but I do know of various class-action suits that were filed. I also invested money with a lady that was supposed to find an attorney that would file an action on our behalf. That never materialized and she represented that she knew more of what was going on than I believed was accurate. She never had the agreement with the attorney to work on our behalf at an extremely discounted rate since he had also been duped by Bill Lange.
I believe that gives my two cents worth to all the e-mails since my most recent.
On this Good Friday I want to wish everyone a happy Easter weekend and hope some thought will be given to what the true meaning of Easter is and not just a gorge out on candy. I hope all are doing well with their real estate endeavors.
Rich
- Jacksonville, FL · Member since 2015 · 183 posts · 22 votes11y
Directed at Scott & others, sorry to hear about the loss. Sounds awful that there are lenders out there that would prey on investors. Definitely makes sense to be careful when looking into funding sources as some might take advantage of some of the pressures faced when trying to close what often might be an already complicated deal.
This would be some of the case specifics from the FBIs website, for readers not familiar with the case (not sure if we could include hyperlinks here):
“...Through lies and deceit, the defendants took advantage of a national tragedy and unsuspecting investors and stole millions of dollars so they could line their own pockets... The evidence at trial established that Russell, together with others at Harbor Funding Group Inc. (HFGI), executed an advance fee scheme by targeting regions affected by Hurricane Katrina. Russell and his co-conspirators told land developers and their clients that HFGI had lenders and funds available to provide financing for their real estate projects. As a condition for financing, HFGI required its clients to place 10 percent of the loan amount in an attorney escrow account. Contrary to their representations, HFGI did not have lenders or funds available to finance the loans and stole the deposit money placed in escrow. Russell was the loan processor at HFGI and prepared and maintained the loan documents and escrow agreements. Through this fraudulent scheme, Russell and his co-conspirators stole more than $9 million from approximately 300 individuals.
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes11y
Originally posted by @Rich Weese:
... I don't think I have lost any sleep over the $48,000 that I appear to have lost in trying to buy into the accelerated depreciation program that was available in the Biloxi area. It has been so long ago I can't even remember what the program was called, but it was put together by the government to help speed up the rebuilding of that area after the devastating hurricane hit it.
...
Rich,
It was called GO Zone (Gulf Opportunity Zone); see link:
- 11yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
When you say accelerated depreciation investment are you referring to GOZONE benefits from the Gulf Opportunities Act Post Katrina?
If you are there was massive amount of fraudsters involved with those deals.. mainly trying to talk those that don't qualify into schemes so they could take the benefits..
And since the product had to be new construction there was also a lot of bad deals were builders stole draw money.. Attorneys release money they should not have.
Knew of a promoter in Hawaii who got caught up in that and lost a bunch of dough for his investors.. of course he blamed it on others.. He subsequently passed away before any trials could take place.
I personally bought about 12 GO Zone houses in Madison MS.. and they worked perfectly but I did not go in with anybody I just bought them one off in my name... But I got the 50% year one write off... And of course I got audited by IRS for taking those deductions .. you had to prove you were a RE professional and you made your income in RE.. If you were a doctor buying one you got it disallowed and paid penalties.. and that's were a lot of fraud happened you had folks talking these people into buying them without them checking deeply into the rules... One could only take the depreciation if it was in your trade or business. Well it was only about 15 minute meeting with my account and IRS dude.. I am clearly and have always been in the trade or business.. But it saved me 250k a year in income tax the 3 years I did so it did work.. and these homes have been some of my best rentals ever.. they don't cash flow. they break even at best but I knew that going in.. As for every 25k down I put on a rental I saved 50K out of my jeans that year to uncle sam.. Now I am selling them and selling them for break even to small loss's but they served the purpose.
- 11yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
thanks Steve I thought so too.
It was so confusing at the time and sounded to good to be true.. that I actually hired a top law Firm in Jackson MS to give me an opinion paper that I could as RE broker and HML who derived 100% of my income from being a RE professional that buying new construction rentals in the GO Zone would allow me to take the section 179 election.
Did the same thing with airplanes in the day... but recapture is a beotch.
Here's my take on what happens:
People get whipped up into a lather about opportunities that may or may not exist because of economic conditions, politics, an event (9/11, Katrina, etc.) and they want to get in on the money they believe will be made.
Inexperienced but enthusiastic would-be investors decide this is 'the time' to spring into action. However, they do not have an avenue or entry point.
Enter the promoters, info educators and syndicators. They seize the opportunity to move money from those who want to participate but don't know how to get in on the action.
Many promoters, educators and syndicators are legitimate and sincere. That does not make them competent, nor crooked. But others have no clue about the business and have no intentions of making good on their promises.
For the uninitiated, separating the BS artists from people who will achieve a mutual goal takes a back seat to the timing of the opportunity. Then reassure is on to exploit before the opportunity goes away.
Some smart operators have studied and honed their skills in prior times and are ready to exploit the opportunity, but with their money alone.
The sad part is that the OP of this 2008 thread, "Jane Doe" will never see her part in this scenario and will, therefore, continue to play the role as a victim. Jane has probably already tried Amway MLM, pyramid clubs and RE wholesaling, and more. Jane is what is commonly referred to in Vegas as a patsy. Jane only way out of this cycle is to stop, accept the past, and use it to energize and motivate herself to become educated and learn to market directly to her target sellers without a middleman. If unwilling, get a job.
Since I decided long ago (and former employers agreed) that I was unemployable, it was an easy decision: Study, apply, prove it, become an expert in a niche..
- Investor · Shelbyville, KY · Member since 2011 · 93 posts · 20 votes11y
Can anyone tell me If Jeff and Ellen Petracco of Wealth builders are on the up and up ?
I am considering doing a deal with their office but now I am thinking to put that on hold .
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes11y
Originally posted by @Bob Baldwin:
Can anyone tell me If Jeff and Ellen Petracco of Wealth builders are on the up and up ?
I am considering doing a deal with their office but now I am thinking to put that on hold .
Those names were brought up a number of times on page 4 of this thread; perhaps you should message to the parties naming then for more insight.
- Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes11y
Update
Bill Lange is in Federal Prison (FCI Terminal Island) for 20 years with NO possibility of parole and March 18, 2034 release. I'm glad he gets a penalty for screwing so many people.
Rich
- Chicago, IL · Member since 2015 · 4 posts · 0 votes10y
I am a producer on the CNBC show American Greed who is researching the story of Harbor Funding Group Inc. and William C. "Bill" Lange. Someone mentioned the show several posts back. Would love to get in touch with you guys about your opinions on what should go in the show. Send me a message if you'd like to talk and I'll get you my contact information (phone & email) ASAP.
- Chicago, IL · Member since 2015 · 4 posts · 0 votes10y
Originally posted by @Jeanne Heffron:
I am a producer on the CNBC show American Greed who is researching the story of Harbor Funding Group Inc. and William C. "Bill" Lange. Someone mentioned the show several posts back. Would love to get in touch with you guys about your opinions on what should go in the show. Send me a message if you'd like to talk and I'll get you my contact information (phone & email) ASAP.
P.S. I thought the American Greed joke was pretty funny. It's a crazy story!
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Jeanne Heffron I love your show !!!!
- Chicago, IL · Member since 2015 · 4 posts · 0 votes10y
Originally posted by @Jay Hinrichs:
@Jeanne Heffron I love your show !!!!
Thanks, Jay! We have nearly 100 episodes available for free on Hulu right now if you are interested in catching some re-runs. There's a great one called Real Estate Home Wrecker which I worked on, a story out of Cincinnati.
I've been reading through the court filings for the Lange case, and wow, this guy seems to have had putting people off for just a little bit longer down to a science. The emails are incredible! However, there doesn't seem to be much about him out there on the internet prior to 2007. If he graduated high school in 1965, what in the world was he up to for all those years? Was curious whether members of this forum might be able to fill in the backstory a bit. Many thanks!
- @Bryan C: this may be the one you asked about (two years ago - but I just got the news,) unless there is another Harbour Portfolio that deals with real estate: https://www.fox13memphis.com/top-stories/buying-a-home-lawsuit-says-company-takes-advantage-of-home-buyers/637267404
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