@John S Lewis
Oh, I'm all about the education.
In my target area, I once bid on a property that had been involved in two scams by a slumlord. What this guy did the first time was buy this house as a tax foreclosure under an LLC name, do some quick-fix work on it, and sell it to people who had no money in the bank.
What the sleaze first did from 2007 until around 2014 was was open an account in their name at a bank he chose, and then he put about twenty grand into it. He had an accomplice in the bank handle it all -- the people thought they were simply buying a house with no money down. The accomplice then started the process for the $65000 loan, secured by the completely legitimate W2s the buyers provided and the fraudulent bank account in their names. The loan would go through, the twenty grand was taken out of the account along with an additional $45000 (the loan amount) and handed back to the con artist as the buyer. The people got their house with "no money down."
This is bank fraud, of course, and that's what they finally got the slumlord and his multiple accomplices on, 145 or so properties later.
The house was a tax foreclosure. It was in no way livable, even though the quick-fix repairs hid the most obvious problems. The people who bought it could not possibly afford to fix it -- they could barely afford the loan payments. So in eighteen months, the house went through a mortgage foreclosure action.
Guess who bought the house back from the bank as a REO under a different LLC name? Uh-huh. Now the con artist ran the house through a different scam, the one that truly made him a slumlord. He put up a wall and changed the door set-up and sold the place for $55000 as a multifamily to investors who lived abroad, billing himself to them as a turnkey property manager extraordinaire. Big money in turnkeys in western Pennsylvania! What did they know? They lived an ocean and a continent away.
This was not by itself illegal, but the con artist never paid off his investors. He pretended to set the places up with tenants, pretended to be handling the property management on the place, and sent the new owner the first six months worth of fake rent after a host of fake repairs and maintenance that turned the amount of the fake rent into a pittance. The slumlord gave his business's address as an MMA gym in the middle of nowhere. The pittance was the last money the investors saw. This scam was simply a way to get quick cash for his exit strategy, and the slumlord did it for about 40 properties under his new LLC name before the jig was up.
The cops finally rolled up on him for bank fraud for the 145 properties. He surrendered to them, handed over his foreign passport, and posted bail. And of course he vanished in the wind. The feds caught the slumlord down in Florida after he got himself a Florida driver's license in his own name and was trying to get his hands on another foreign passport. This probably would have worked pre-9/11 and the Patriot Act. The feds hauled him back to hold him in contempt.
He's doing 51 months for the fraud and another 6 for the contempt of court in federal prison. The prison authorities says he prays, exercises, and reads motivational books daily. According to him, he was led astray by others. His lawyer passionate insists the slumlord con artist is good at heart and was turned to The Dark Side by his accomplices. There's no parole for federal prison, but the slumlord will earn 54 days off for good behavior for each year he prays, jogs on the treadmill, does his situps, and moves his bookmark through Tony Robbins's books. This man will be out in 2021, free as a bird at 54 years of age, ready to set up shop somewhere else. How much would you care to bet that a hefty chunk of the millions he defrauded out of the banks and then the foreign investors is wrapped up in plastic and hidden in a joist bay somewhere in this town or down in Florida?
