Kansas City Real Estate Operator Under Investigation

The Kansas City Star reports, in two recent articles, their investigation of transactions involving indicted real estate wheeler dealer Ray Zwego; transactions The Star believes may cost dozens of sellers, buyers and tenants millions of dollars in losses from bad loans and foreclosures. According to The Star, the transactions involved:

• Used inflated appraisals to jack up prices on at least two dozen homes and obtain loans far exceeding the properties’ values,
• Used the credit ratings of "straw buyers" to get an estimated $18 million or more in mortgages through his . The straw buyers often were left "holding the bag" on unpaid loans when Zwego failed to make mortgage payments, and
• Compromised portions of the Heartland Multiple Listing Service (MLS).

He was indicted in January with former Jackson County Executive Katheryn Shields and her husband, Philip Cardarella, who are accused of inflating the value of their home in Kansas City to $1.2 million in an effort to defraud lenders. Zwego stood to net $414,000 in “management fees” in the sale, according to the indictment.

Reportedly, Zwego’s operation is only one of at least five metro Kansas City real estate operator groups that the local FBI is investigating. For more on The Star's investigation and Ray Zwego, see:

• Dealmaker cuts a path of financial anguish (no longer available online), and
• Zwego’s history of wheeling, dealing (The real estate, car and mattress salesman has a long rap sheet) (no longer available online).