Central Florida Sale Leaseback Peddler Linked To 50 Ripoff Deals Gets 10 Years On Racketeering Charge; Targeted Cash-Strapped, High-Equity Homeowners

In Orlando, Florida, the Orlando Sentinel reports:

• One after another, the victims explained the scheme in court: They needed loans. John Pavao reached out to them and offered help. They signed some documents. And the next thing they knew, they were losing their homes.

• Those victims, several of them sick and elderly, faced Pavao at his sentencing [earlier this month], like ghosts from his past. The Windermere man once made the cover of Opportunist magazine, proclaiming, "All you need is a passion to succeed."

• But Pavao actually needed more than passion, prosecutors said. They said he needed a technique that exploited people in financial duress and at risk of foreclosure and robbed them of their homes in many cases and, especially, their equity in those properties. Officials familiar with the case said the so-called "equity-stripping" scheme is the kind of behavior that fueled the real estate crisis.

• [... T]hat behavior caught up with Pavao when Circuit Judge Alan Apte sentenced the 44-year-old to 10 years in prison after he pleaded guilty to a single count of felony racketeering in late September. Financial-crimes investigators and the prosecution said Pavao's actions resulted in the loss of millions of dollars worth of property and equity across Central Florida.

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• Seniors and others who had lived in their homes for many years and had significant equity in those properties were especially vulnerable and prime targets. [...] Michelle Dygon, a financial-crimes investigator with the state, told the judge they identified 50 cases linked to the Pavaos, but focused on nine properties worth about $2 million. "They were conned. They were lied to. They lost their homes," Dygon said. "They were not aware they were deeding their property over. They had no intention of selling their homes or deeding their homes."

For more, see John Pavao: Windermere man sentenced to 10 years in property-fraud case.