Tuesday, April 24, 2018

Reports about shell companies and Sean Hannity's real-estate holdings raise questions about foreclosures in Alabama, Georgia, and other Southern states


Sean Hannity
Revelations that Fox News' Sean Hannity is linked to more than 20 shell companies that bought roughly $90 million of real estate in mostly Southern states should raise eyebrows with anyone who has experienced a foreclosure over the past few years in Alabama -- and that includes your humble blogger.

The whole smelly Hannity story has a distinctly Southern stench to it. The shell companies were formed in Georgia, via a wealth-management firm in the Atlanta suburb of Kennesaw. The properties are in seven states -- including Alabama, Georgia, Florida, North Carolina, and Texas -- along with New York and Vermont. After a brief stint in college radio, Hannity started his professional broadcast career at radio stations in Athens, Alabama, and Atlanta, Georgia.

Why does the Hannity story raise an eyebrow with yours truly? My wife, Carol, and I went through a dubious foreclosure on our home of 25 years in Birmingham. Our home went into default in 2013, and we were in a forbearance program with our mortgage company (Chase) to get back on track when I was arrested in October 2013 shortly after breaking a series of posts about U.S. Circuit Judge Bill Pryor and his history of posing nude for photographs that appeared at the gay-pornography Web site badpuppy.com in 1997.

The five months I was wrongfully incarcerated cost us any chance of saving our home, and it was sold at foreclosure in summer 2014, forcing us to move to my home state of Missouri. Reporting on the Hannity story states that many of his properties were bought at foreclosure, but we've seen no mention that foreclosures can be conducted unlawfully. Ours definitely was a wrongful foreclosure, and we have filed a federal lawsuit (we call it "The House Case") over the matter. As often is the case in legal matters where we are involved, courts have made numerous rulings that are contrary to simple, black-letter law.

Corrupt rulings in "The House Case" started in the Northern District of Alabama under Judge R. David Proctor and have grown more blatant at the U.S. Eleventh Circuit Court of Appeals, which includes Bill Pryor and is based -- surprise, surprise -- in Atlanta, not far from the epicenter of Sean Hannity's real-estate empire. (More reporting on the Eleventh Circuit and our "House Case," plus possible ties between our foreclosure and the Hannity story, in upcoming posts.)

Hannity's real-estate holdings revolve around Henssler Financial, which includes Bill Lako, a principal who has appeared on Hannity's radio show as a finance expert.. From The Guardian and reporter Jon Swaine, who broke the Hannity story yesterday:

The shell companies used to buy the properties are registered to the offices of Henssler Financial, a wealth management firm outside Atlanta. Bill Lako, a principal at the firm, has appeared on Hannity’s radio show as an expert on money issues.

Lako recently wrote an article for the show’s website berating Robert Mueller, the special counsel investigating ties between Trump’s 2016 election campaign and Russia, without noting his ties to Hannity. He did not respond to an email. . . .

The list of properties bought by the Hannity-linked companies includes multimillion-dollar homes used by Hannity. It also features single-family units priced as low as $50,000 in relatively poor suburbs. In at least two cases, batches of homes were bought simultaneously at a discount, after they were repossessed by banks from their previous owners in foreclosure proceedings.

The entire portfolio connected to Hannity comprises at least 877 residential units, which were bought for a total of just under $89m. Another seven properties bought by the companies over recent years have subsequently been sold for more than $4m, according to public records.

How do shell companies enter the picture? An article at Fortune explains:

According to documents reviewed by The Guardian, Hannity bought real estate through more than 20 shell companies registered in Georgia. A shell company is a vehicle used to hold assets and can help beneficiaries remain anonymous. They are not in themselves illegal, though they are sometimes used to conduct illegal activities such as tax evasion. There is no indication that Hannity is engaged in any illegal practices, but he is the hidden owner behind at least some of the 20 companies through which he has bought property. In his case, it appears the shell companies were used to limit his liabilities in the real estate deals in question.

As is typical for a conservative, Hannity took advantage of others' struggles. He helped build a fortune on the collapsing U.S. economy that the failed GOP administration of George W. Bush ushered in -- a presidency that Hannity enthusiastically supported. From Fortune:

Despite his criticism of President Obama over the U.S. foreclosure rate, Hannity was an apparent beneficiary of the high number of foreclosures that accompanied and followed the great recession. In 2013 he purchased homes at a discount after their previous owners lost them to foreclosure. The Guardian reports he bought dozens of homes this way.

No wonder Hannity loved the Bush years. He made millions off the administration's failed policies, and then tried to blame it on President Obama, who pulled the country out of a potential economic disaster.

If you experienced an Alabama foreclosure in recent years, especially since 2013, we urge you to follow the Hannity story closely. With FBI agents recently seizing records from the office of Michael Cohen, attorney for both Donald Trump and Sean Hannity, more information about Hannity's real-estate holdings is likely to surface. And it might not be pretty.

As for our own foreclosure, we don't know if it has any ties to Hannity's wheeling and dealing. But it fits the profile of the properties that have been reported about so far -- especially when evidence suggests that our foreclosure was driven by those who saw me, and my journalism, as a threat to their political well-being. It was, without a doubt, a political hit -- and Sean Hannity is a political opportunist posing as a talk-show host on Fox News.

Here is the key questions for us, and we encourage targets of Alabama foreclosures over the past five years or so to keep it in mind: Were the foreclosures involving Sean Hannity's shell companies lawfully conducted? Did firms with ties to Hannity engage in wrongful foreclosure to essentially steal properties at bargain-basement rates from the rightful owners? Did the firms target individuals (such as Carol and me) who were seen as political opponents of Hannity and his right-wing friends?


(To be continued)

28 comments:

Anonymous said...

Will be interesting to see where this leads. A lot of information still not known.

Anonymous said...

If Hannity is acting on the up and up, why all the shell companies?

Anonymous said...

Sean Hannity = crappy, absent landlord.

Anonymous said...

My bet is that lots and lots of foreclosures are done unlawfully, and a guy like Hannity doesn't care one bit.

Hoarse Whisperer said...

Hannity got help from HUD on some of this. I thought he was supposed to be against government assistance.

Anonymous said...

The timing of your incarceration, in line with your mortgage issues, smells to high heaven. I'm sure right-wing trolls will disagree, but RW trolls are full of shiite.

I'm sure it's hard to deal with a mortgage problem while you are locked up.

legalschnauzer said...

@7:57 --

It's impossible to deal with anything on the outside while you are locked up I didn't have access to a pencil, a piece of paper, a functional pen. Our house just floated away, and GOP thugs had me in jail so I could not deal with it. And they were trying to arrest my wife, Carol, too.

Mueller Man said...

Will be interesting to see if the Cohen files shine light on any of this.

Anonymous said...

They tried to arrest your wife? Good gravy! She didn't have anything to do with the posts they were bitching about, did she?

legalschnauzer said...

@8:40 --

Oh, yes, that's why they sued her, so they could try to arrest her, too. I heard cops talking about trying to get her when they had kidnapped me from my own garage. The effort to get Carol points to ulterior motive, that the Rob Riley/Liberty Duke lawsuit wasn't about defamation at all. It might mean that my incarceration, in fact, was about our mortgage and cheating us out of our house via a wrongful foreclosure. They might have been concerned that Carol, if free, could work out our mortgage issues on her own -- but that's pretty hard to do when you are joint owners of the property.

Anonymous said...

Thing just got worse for Sean Hannity.

New headline from The Guardian:


Sean Hannity's real estate venture linked to fraudulent property dealer


https://www.theguardian.com/media/2018/apr/24/sean-hannity-real-estate-property-dealer-jeff-brock-fraud-foreclosures

legalschnauzer said...

Thanks for sharing, @8:58. Check out the first paragraph on the new Guardian story:

"Sean Hannity’s real estate venture bought houses through a property dealer who was involved in a criminal conspiracy to fraudulently obtain foreclosed homes, according to records reviewed by the Guardian."

That goes straight to wrongful foreclosure, the key point of this post.

Anonymous said...

Here is the gist of new Hannity story from The Guardian:


"In 2012, a shell company linked to the Fox News host bought 11 homes in Georgia that had been purchased by the dealer, Jeff Brock, following foreclosures. Brock transferred the properties to corporate vehicles that sold them on to the Hannity-linked company at a profit.

"Brock pleaded guilty in 2016 to federal charges of bank fraud and conspiracy for his role in an operation to rig foreclosure auctions between 2007 and 2012. He was sentenced to six months in prison and had to pay more than $166,000 in fines and restitution."


Ouch!

Anonymous said...

This was all about cold, hard cash:


"Brock had bought the 11 Georgia houses in foreclosure auctions in 2011 and 2012, after the previous owners defaulted on mortgages. He transferred the properties to five LLCs. Brock was the registered agent for two of the five LLCs and a colleague at Key Property was the agent for another. Then the Hannity-linked company bought the houses from these five LLCs, paying a total of $600,000.

"Where payment information was clear in the records, it indicated that the sales created significant profits. One four-bedroom home in College Park that Brock bought for $14,000 in January 2012 was sold to the Hannity-linked company for $47,000 the following month. Another in Forest Park, for which Brock paid $19,000 in October 2011, was sold on for $55,000."

Anonymous said...

Here is DOJ press release from 2016 about guilty pleas in case of Jeff Brock, the broker tied to Hannity's shell company:


https://www.justice.gov/opa/pr/three-georgia-real-estate-investors-plead-guilty-bid-rigging-and-bank-fraud-public-home

legalschnauzer said...

Great find, @9:29. The press release describes the fraudulent scheme involving foreclosure auctions:


Jeffrey Wayne Brock, David Wallace “Chuck” Doughty, and Stanley Ralph Sullivan each admitted that they agreed to rig auctions of foreclosed homes in Cobb County from June 2007 until January 2012. According to court documents filed in the U.S. District Court for the Northern District of Georgia, Brock, Doughty, Sullivan and their co-conspirators agreed not to compete for the purchase of selected foreclosed homes so that they could win the auctions for those homes with artificially low bids. The winning bidders then made payoffs to conspirators who had refrained from bidding against them. As a result, conspirators profited from money that otherwise would have gone to mortgage holders and other secured debt holders, and in some cases, to the owners of foreclosed homes.

“These defendants conspired to corrupt foreclosure auctions that should have benefited lenders and homeowners,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division. “The Antitrust Division will continue to work with our colleagues at the FBI to pursue those who took advantage of disruption caused by the financial crisis to line their own pockets.”

Anonymous said...

The reason for the shell companies is that each one is an LLC (limited liability corporation), and being an LLC, if one is sued, only the assets controlled by the company that is sued is at risk. The parent company is protected as well as the other LLCs are protected. It is a common business practice.

Anonymous said...

Here is the indictment, or "criminal information," in the Jeff Brock bid-rigging case:


https://www.justice.gov/atr/file/875221/download

Anonymous said...

The indictment shows Jeff Brock & Co. were essentially stealing money that was supposed to go to banks, homeowners, and others who were legally entitled to it.


The objects of the conspiracy were, among other things, to fraudulently acquire
title to rigged foreclosure properties at artificially suppressed prices; to make payoffs to and receive payoffs from co-conspirators; and to divert money away from financial institutions, homeowners, or others with a legal interest in rigged foreclosure properties.

Anonymous said...

@9:48 --

Is it a common business practice to rig foreclosure auctions? I bet it's real common.

legalschnauzer said...

Here is how the scheme worked, according to indictment:


a. purchasing rigged foreclosure properties at public auctions at artificially
suppressed prices;

b. negotiating payoffs with each other and with one or more co-conspirators
in exchange for agreements not to compete at public auctions;

c. conducting secret, second auctions, open only to co-conspirators, to bid
for title to rigged foreclosure properties;

d. awarding rigged foreclosure properties to co-conspirators who submitted
the highest bids at the secret, second auctions;

e. transferring title to rigged foreclosure properties into the names of coconspirators
who submitted the highest bids at the secret, second auctions;

f. distributing payoffs to co-conspirators that otherwise would have gone to
financial institutions, homeowners, and others with a legal interest in the rigged
foreclosure properties, in an amount based on a predetermined formula agreed
upon by co-conspirators or through direct negotiations between co-conspirators;

g. making and causing to be made materially false and misleading pretenses
and representations to agents of the foreclosing financial institutions and others
involved in the auction and sale of the rigged foreclosure properties; and

h. causing artificially suppressed purchase prices to be reported and paid to
financial institutions and others with a legal interest in rigged foreclosure
properties.

Anonymous said...

Schnauzer:

Your house was sold at auction, wasn't it?

legalschnauzer said...

@10:21 --

Yes, it was, on the steps of the Shelby County Courthouse. My research indicates the vast majority of foreclosed properties are bought by the bank. But ours was bought by a house-flipping outfit called Spartan Value Investors, headed by a fellow named Clayton Mobley. Spartan then flipped it to another outfit, JAG Investment Strategies.

So, it went from one house flipper to another, and that sounds a lot like the scheme Jeff Brock (with ties to Sean Hannity) used to rig foreclosure auctions in Georgia.

Anonymous said...

If you actually watch Sean Hannity's show on Fox, you'd better drink it in while you can. His broadcast career is going to be toast when all is said on done on these real-estate capers.

Anonymous said...

LS:

You and Carol, along with others who believe they might have been victims of fraudulent foreclosures in Alabama, should check out the following information. It's from the DOJ press release about the Jeff Brock case:

"Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information about the task force, please visit www.StopFraud.gov. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations."

legalschnauzer said...

Great information, @1:02. Thanks for sharing. Like you, I urge others who might have been victims to look into this.

You can bet Carol and I will checking into it. We are pursuing civil damages already, and we will be looking into filing a criminal complaint.

Spartan Value Investors and JAG Investment Strategies were two entities involved in our dubious foreclosure, and there is no telling who else might have been involved. I repeat the key information you pulled from the DOJ press release:


"Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations."

Anonymous said...

Never would have figured a Fox News host would be connected to financial fraud. What a shocker!

Anonymous said...

How did Alan Colmes stand being around a slime ball like Sean Hannity?