Two Virginia Residents Allege Property Flipping In Class Action Suit
A class action lawsuit filed in October by two Martinsville residents who allege to have been scammed in a property flipping operation is the subject of a media report in today's Martinsville (Virginia) Bulletin, at martinsvillebulletin.com.
The suit, filed and currently working its way up the system in an Indiana Federal Court, alleges that some of the defendants bought modestly priced homes, inflated the property appraisals, and resold them to unwitting buyers for the inflated price.
The alleged ringleaders have been accused of recruiting unwitting "straw buyers" by inviting them to participate in a real estate investment club and who were told the club would buy rental property in the Indianapolis area, finance the purchases with loans that required no down payment or cash contribution from participants, and manage the properties at no cost to participants. Further, the participants were told that the properties would throw off enough rental income to both cover the house payments and pay profits to them, according to court filings.
Included in the allegations for one or more of the 21 named defendants are charges of fraud, theft by deception, civil conspiracy, negligence against the appraisers, negligent misrepresentation against the appraisers, and violations of both state and federal racketeering (RICO) statutes.
Indiana resident Robert Penn and Ace Appraisal Services are listed on the suit as the lead defendants among the 21 defendants named in the suit. To read more, see Another lawsuit alleges fraud.
To read the lawsuit, click here for Copy of Lawsuit - Watkins, Hairston, et. al. v. Robert Penn, Ace Appraisal Services, et al.
For a related ABC News Nightline story, see Giant Scam? Real Estate Dreams Dashed (Investment Club Turns Into a Nightmare Idea); or watch video - Nightline Online: Town's Boom & Bust.
The suit, filed and currently working its way up the system in an Indiana Federal Court, alleges that some of the defendants bought modestly priced homes, inflated the property appraisals, and resold them to unwitting buyers for the inflated price.
The alleged ringleaders have been accused of recruiting unwitting "straw buyers" by inviting them to participate in a real estate investment club and who were told the club would buy rental property in the Indianapolis area, finance the purchases with loans that required no down payment or cash contribution from participants, and manage the properties at no cost to participants. Further, the participants were told that the properties would throw off enough rental income to both cover the house payments and pay profits to them, according to court filings.
Included in the allegations for one or more of the 21 named defendants are charges of fraud, theft by deception, civil conspiracy, negligence against the appraisers, negligent misrepresentation against the appraisers, and violations of both state and federal racketeering (RICO) statutes.
Indiana resident Robert Penn and Ace Appraisal Services are listed on the suit as the lead defendants among the 21 defendants named in the suit. To read more, see Another lawsuit alleges fraud.
To read the lawsuit, click here for Copy of Lawsuit - Watkins, Hairston, et. al. v. Robert Penn, Ace Appraisal Services, et al.
For a related ABC News Nightline story, see Giant Scam? Real Estate Dreams Dashed (Investment Club Turns Into a Nightmare Idea); or watch video - Nightline Online: Town's Boom & Bust.
posted by Home Equity Theft Reporter at 11:23 AM
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