RI State Cops Bust Alleged Flipping Fraud Investment Scam Coupled With Rent To Own Racket; Investors Left In Financial Ruin, Homes Fall To Foreclosure

The Rhode Island State Police recently announced:

• [Thursday], members of the Rhode Island State Police Major Crimes Unit, in conjunction with the United States Postal Inspector’s Office and Office of Attorney General, arrested Pierre (“Peter”) Chabot, age 75, of [...] North Providence, Rhode Island on the strength of a Statewide Grand Jury indictment [...].(1)

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• During this investigation, Chabot arranged for 25 investors to buy 73 properties in Rhode Island valued at $16,745,400.00. Chabot is believed to have grossed approximately $2,919,784.00 by assigning properties to investors at an inflated appraised price, and omitting the fact that he previously contracted with purchase options with the sellers at a bargained price.

• All Investors were advised by Chabot that their investment property would be rented out and that they would be “completely protected” for one-year by a “lease option agreement” (LOA) whereby the renter would cover all expenses. Chabot further advised that the investors would receive $5,000.00 at the time of the closing. Chabot promised investors that their credit scores would be improved and their investment properties would be sold to those renting the properties within one year. None did, and the majority of the properties were foreclosed.

• Once this scheme was discovered, Chabot was left free and clear of over $16,460,000.00 in bad loans, and the investors were all left in financial ruin. Subsequently, the lending institutions sustained tremendous losses.

For the press release, see Orchestrator of Multi-Million Dollar Predatory Mortgage Fraud Scheme, Pierre "Peter" Chabot Arrested.

(1) Others bagged in the indictment were:

• Closing Attorney Jon A. Mills, age 60, of Lincoln, Rhode Island. Mills maintains a practice identified as the Law Office of Campanella and Mills located in Warwick, RI.
• Mortgage Broker Joseph H. LeMay, age 59, of Blackstone, Massachusetts. LeMay operates Back Bay Mortgage located in Warwick, RI.
• Property Appraiser Sharon B Kosciusko, age 57, of Warwick, Rhode Island. Kosciusko operates Appraisal Services of Rhode Island.