Thursday, April 26, 2018

Hidden investors helped fund foreclosure fraud in Georgia scam tied to Sean Hannity, and the same scenario might have unfolded in our Alabama case


Sean Hannity, of Fox News
Unidentified investors in Georgia funded foreclosure fraud involving a real-estate broker connected to Fox News' Sean Hannity. Evidence suggests a similar scenario might have been at the heart of our wrongful foreclosure in Alabama.

That means well-heeled and hidden investors need to be identified -- in both the Jeff Brock case in Georgia (involving a Hannity shell company) and the Shuler foreclosure in Shelby County, Alabama (involving at least two house-flipping companies).

In our case, we plan to seek investors' identities via a federal lawsuit and a criminal complaint. We do not intend to sit back and let rich people get away with financing the theft of our house, via a wrongful, and possibly fraudulent, foreclosure.

While Brock pleaded guilty to fraud and conspiracy in the Georgia case and spent six months in federal prison, he did not conduct the scam alone; he had help on the front end from two conspirators who also pleaded guilty, and he had financing from investors who never have been held accountable for their role in stealing funds that, in a number of cases, should have gone to homeowners. From a report at the Daily Beast:

According to the government sentencing memorandum from when Brock was sent to federal prison for a scheme involving numerous rigged auctions, the payoff for the Lakewood Drive house was $3,770. The memorandum notes that the actual payoff money in all Brock’s crooked auctions came not from Brock himself but from investors who bankrolled his acquisition of foreclosed houses. He or, in his absence, his representative provided the investor invoices for what were described as “finder’s fees.”

“Brock did not use his own money to pay Doughty and Sullivan for not bidding competitively at the December 6, 2011 auctions; rather, he used money that outside investors had given him to acquire foreclosed properties,” the memorandum says, “To keep his investors informed, Brock instructed an employee to send them invoices documenting the payments that he made.”

The employee dutifully prepared an invoice documenting a $3,770 payoff for the Lakewood house. The sum seems altogether reasonable considering that county records show Brock paid only $21,130 for a house that had been purchased back in 1999 for $95,000 and subsequently carried a mortgage of $155,000.

The obvious question: Who are these investors who funded criminal activity? Right now, we don't know. From the Daily Beast:

The memorandum does not identify the investor who provided the payoff funds. Property records show that title to the house did pass from Brock to a Cobb County entity called The First Real Estate Corporation, though no purchase price is recorded and the property passed that very same day to one of Sean Hannity’s myriad shell companies, SPMKX GA LL.

Even so, however innocent he may be of actual wrongdoing, Hannity remains the beneficiary of a crooked scheme. Records show Hannity paid $54,000 for a house worth double that amount.

Whoever paid the payoff, the outcome of this deal is so messy you might think that Michael Cohen was involved. There is no indication that he had anything to do with it.

In our Alabama case, it's not clear that criminal activity was involved. But there is little doubt hidden investors were involved. By its very name, the entity that bought our home at auction (Spartan Value Investors) involves investors, and their identify is cloaked in secrecy. Roughly two weeks after buying the property, Spartan Value Investors "flipped" it to another outfit, called JAG Investment Strategies. Again, the name suggests unknown investors are involved.

Clayton Mobley, Spartan Value Investors
How do the numbers stack up in our case? Spartan bought our property for $74,359 and sold it to JAG for $98,500. That's a profit of more than $24,100 in roughly two weeks time. And our house had a market value of around $200,000. That's likely where investors made a nice chunk of change. And we made nothing, even though our house was a rare one that sold for more than the amount left on the mortgage.

There probably is not much worse in life than going through a foreclosure or an eviction -- and we have been through both. And when it appears the processes involved fraud or deceit . .  well, it's enraging.

Here is how the Daily Beast put it, in reporting on the Brock case in Georgia:

Along with describing how the investors provided the payoffs to secure a purchase price far below the actual value, the sentencing memorandum notes, “For the homeowner victims, these thefts occurred at a low point in their lives.”

The memorandum continues, “The money that Brock and his conspirators kept for themselves could have helped the victims get back on their feet, but Brock instead enriched himself.”

14 comments:

Anonymous said...

Were the feds too lazy to go after the investors who funded the Hannity-related fraud? I don't get it.

Anonymous said...

The investors probably didn't know what their money was being used for. The money guys never know. At least that's what they will tell you.

Anonymous said...

Tax evasion, tax evasion!

Anonymous said...

The Guardian will get to the bottom of the Hannity story. I have faith in that.

Anonymous said...

LS: You need to contact this Clayton Mobley fellow and say, "Dude, who are your investors?"

See what he says.

Anonymous said...

Spartan bought your house and flipped it to another flipper in roughly two weeks? Sounds like the two of them had a pre-arranged agreement.

Anonymous said...

@2:39 --

A pre-arranged agreement is what sent the guy in the Hannity case to federal prison. It's called bid rigging.

Anonymous said...

My research indicates Spartan Value Investors originated in Tuscaloosa. Wonder if Paul Bryant Jr. and Stan Pate might be among the hidden investors, maybe with some others tied to Greene Group or UAT.

legalschnauzer said...

This is on a different topic of recent vintage, but thought readers might be interested in some early reports on testimony today of Trump-loving social-media darlings Diamond and Silk. Raw Story reports that the pair might have committed perjury in statements to Congress. Looks like they were paid $7,000 to cut an ad for a neo-Nazi in Wisconsin:


https://www.rawstory.com/2018/04/flashback-trump-supporters-diamond-silk-paid-7k-cut-campaign-ad-wisconsin-neo-nazi/

Anonymous said...

Sean Hannity and connected investors were making money off of fraud. They were all part of a scheme based on criminal acts. Pretty clear and pretty simple.

e.a.f. said...

The way things are processed in the U.S.A. regarding housing and defaults, etc. it sure looks like its stacked against the home owner. these court house step sales simply do not make sense and do not provide the greatest return on the sale. Fortunately we do not have this system in Canada. Part of it may be because of the Canadian banking system, which is run much differently.

You do have to wonder at a system which sells a house for less than the outstanding mortgage. On the surface it doesn't make sense, on the other hand, lots of investors make a lot of money and perhaps that is what it is all about. Some of these processes, like selling a home on the court house steps, is very frontierish and may have worked in the 1700 and 1800s, but today its 2018 and you'd have thought American society would have moved along with the times.

Looking at it as an outsider it seems like Americans get to own homes and then there is a "crisis" manufacturered or not, then a lot of average Americans loose their homes, like 2008.

I expect Trump's new tax bill is slated to ensure many Americans once again loose their homes in 2025, when interest is no longer a tax deductible item. Its something we never had in Canada, so Canadians were more prone to paying down their mortgages especially in times of high interest. With interest rates starting to move up, by 2025, expect there to be massive home losses and corporate entities will pick them up and hold them. Of course Chinese investors could also hit the market in the U.S.A. which they did in Vancouver and Toronto, Canada. They are currently showing a lot of interest in Washington State real estate. Once they hit your state, expect values to rise and stay there. They hold on to the property long term. It will push the local boys out of the money pile.

Anonymous said...

These Spartan Investors did the same thing in Adamsville Ala . They wanted to stop a legal battle against Mcwane Pipe so they got involved and Keller Williams of Gardendale Ala assisted . Someone needs to get the FBI agent in charge to Adamsville Ala . Jefferson County Courthouse when Scott Vowell was there has also assisted in this fraud. I just want to see how many crooks jump in before I go to the attorney general and hope he is honest enough to take these big shot crooks down. Maynard Cooper and Gayle also have a part in this along with the city of Adamsville.

Anonymous said...

Spartan bought my dad and brothers house when my brother was found by his car with a head injury. They flipped it from 14,000. To 84,000. And from 12,000 to 104,000 in 2 weeks with Keller Williams in Gardendale ala

Anonymous said...

Feel free to stay in touch with me on this. I would be interested in learning more. Something smelly is going on with Spartan Value Investors.