Indiana AG: Out-Of State Foreclosure Sale Surplus Snatchers Duped Dozens Of Homeowners Out Of Million$; Defendants Allegedly Paid Approx. $13K For Rights To Over $3.2 Million In "Overage" Claims

In Indianapolis, Indiana, The Indianapolis Star reports:

• Three out-of-state business owners attempted to swindle financially strapped Hoosier property owners out of more than $3 million, according to a lawsuit filed [this week] by Indiana Attorney General Greg Zoeller.
  
  The lawsuit filed in Marion Superior Court seeks more than $9 million in damages, fines and penalties. It alleges the companies based in Florida, Oklahoma and Nevada "took advantage of vulnerable Hoosiers who had fallen behind in their real-estate taxes and who did not understand the tax sale process."
  
  In the complicated scam, the alleged unscrupulous predators would swoop in after a property was sold for delinquent taxes — but before it was redeemed by the tax-sale buyer — and pay the owner a few hundred dollars to turn over their remaining legal rights to the property.
  
  At least 48 property owners in Marion, Allen, Johnson and Lake counties were caught up in the scheme, which focused on properties that had sold at tax sales for significantly more than the amount of delinquent taxes owed.
  
  In such cases, the property owner can collect the "overage" paid in the tax sale — the amount above the taxes due, plus interest and other fees owed to the county and new buyer.
  
  What's left over basically amounts to the owner's "equity" in the home and belongs to the owner if there are no other liens, such as mortgages, on the property.
  
  In one instance, the lawsuit alleges, one of the defendants paid a property owner $450 for a quitclaim deed, which transferred the ownership to the defendant. Along with that ownership came the right to collect the "overage" of $900,000 that was paid by the new buyer above the amount of delinquent taxes due.
  
  That money had been due to the original owner but, according to the lawsuit, the defendant "used misrepresentations" about the owner's legal rights. That helped the defendant persuade the owner to sell and allowed the defendant to claim the windfall, which the owner did not know about.
  
  A statement from the attorney general's office said "it is estimated that the defendants paid the 48 original owners a combined total of $13,640 for signing the quitclaim deeds, and after defrauding the owners out of their legal rights to the tax-sale surplus amounts, the defendants were eligible to submit claims for $3,265,204 in tax-sale surplus payments."
  
  That amounts to more than a 23,800 percent return on their modest investments.
  
  “Rarely have we seen a scam that so brazenly exploited desperate property owners and took advantage of their lack of understanding of a complicated legal process," Zoeller said in the statement. "Victims not only lost their property but money that was rightfully owed to them.”
  
  Zoeller said he suspects there are other victims in Indiana and that the scam was perpetrated in other states as well.
  
  “My office will use every legal tool available to halt this fraud, hold the defendants accountable and assist the victims,” he said.
  
  The lawsuit names FLRC LLC, and Coastal Title Inc. of Florida, and Oak Tree Title Inc. of Stillwater, Okla. Also named in the case are Diana Castro, David Fuqua and Craig Talkington, who are identified in the attorney general's statement as owners of the three businesses.

For more, see Indiana Attorney General Greg Zoeller files suit in tax-sale scam (Attorney General Greg Zoeller: Complicated scam "took advantage of vulnerable Hoosiers who had fallen behind in their real-estate taxes and who did not understand the tax sale process.")

For the Indiana Attorney General press release, see AG Zoeller files lawsuit against out-of-state companies accused of orchestrating tax sale scheme, swindling Hoosiers out of millions.