Texas AG Shuts Down Real Estate Skimming Scam

Texas Attorney General Greg Abbott has obtained a permanent injunction from a Texas state court prohibiting Roberto Flores and his Galindo Trust from entering into what appears to be a form of equity skimming deals with consumers. Further, the court imposed fines against the defendants of over $1.4 million and must also pay restitution to the harmed consumers.

According to the lawsuit, Flores purchased houses on 15 lots in Austin, Texas from Shriners Hospital, obtaining owner financing for $432,000. He then began selling off the homes to consumers on contracts for deed, quoting downpayments of between $2,000 and $5,000. He would offer the consumers owner financing for the balance, without paying off the existing mortgage to Shriners Hospital, the original owner, and without telling the consumers of the existing lien to Shriners. Ultimately, he found himself collecting the payments from his buyers (the consumers) on the owner financing he provided to them while, at the same time, stiffing Shriners Hospital on the owner financing Shriners had provided Flores on the original sale. For more see:

• Court Shuts Down Austin Real Estate Scam; Orders Defendants to Pay $1.4 Million (Galindo Trust sold homes without disclosing liens; many consumers faced foreclosure)
• State of Texas vs. Galindo Trust, Flores, et al. (copy of lawsuit)
• Permanent Injunction
• Copy of "Super Owner Financing Program" used by Flores and Galindo Trust in cheating consumers

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