Florida AG: Foreclosure Rescue Operators Screwed Homeowners In Foreclosure Out Of $1.9M+ Using Bogus Sale Leasebacks Designed To Strip Home Equity

From the Office of the Florida Attorney General:

• Attorney General Bill McCollum [last week] filed a lawsuit against a Miami-Dade County business, its owners and several straw buyers for their participation in an equity skimming scheme that victimized at least 20 South Florida homeowners. Xolutex, Inc., and principals Ceasar F. Tavaras and George Ibanez are named in the lawsuit, which claims the equity losses as a result of the scheme exceeded $1.9 million.(1)

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• According to the lawsuit, the defendants allegedly sought homeowners who were in various stages of foreclosure proceedings and met with them under the guise of offering foreclosure rescue and credit counseling. Homeowners were then lured into the scheme where straw buyers would purchase the homes for inflated home prices, maximizing the money they could skim from the homeowners. To facilitate the straw buyers’ ability to qualify for these loans, Xolutex and its principals allegedly helped falsify loan applications.(2) Additionally, Tavaras and Ibanez allegedly convinced the homeowners to sign documents which caused virtually all of the equity in the homes to be paid to Xolutex.

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• The Attorney General is [...] seeking [among other things] full restitution on behalf of all victimized consumers, civil penalties of $10,000 for each violation of the Florida Unfair and Deceptive Trade Practices Act.(3)

For the entire press release, see Attorney General Sues South Florida Business for Equity Skimming Scheme.

For the lawsuit, see State of Florida v. Xolutex, Inc., et al.

(1) Also named as defendants are: Paola Pino, Laura Ibanez, and Guillermo Gomez.

(2) If there is proof beyond a reasonable doubt that the operators prepared, or otherwise knew of, falsified loan applications, this would appear to be an easy case for the South Florida Feds to piggyback off of by bringing subsequent criminal charges in Federal court.

(3) Since this matter was brought by the Florida AG as a civil case (as opposed to a criminal prosecution), there is no threat of jail time for the defendants in the event the allegations against them prove true.