The trio worked for a Virginia-based company called Total Realty Management that bought more than 225 lots at market value from the developer of the Cannonsgate and Summerhouse subdivisions and allegedly resold them at fraudulently inflated prices.
Attorney Jill Pisner of McLean, Va., whose firm represents almost 130 of the plaintiffs in a civil suit filed two years ago, said the arrests and prison sentences were good news for her clients.
“We’ve been waiting on the criminal indictments and guilty pleas for some time, and my clients are finally seeing some justice in the criminal case,” Pisner said. “And certainly some of the information being revealed could be helpful.”
For example, she said, she had long sought access to TRM’s computer server, but the FBI had been holding onto it for its investigation. Now investigators have agreed to release it.
Her clients are suing TRM officials, Bank of America, appraisers and others involved in the land deals.
Cannonsgate is in Carteret County, and Summerhouse is in Onslow.
TRM officials bought and sold some Cannonsgate lots several times, with the sales price rising rapidly with each “flip,” according to land records filed with Carteret.
The lawsuits claim TRM was selling the lots to buyers it had recruited to inflate the price, then buying the land back and reselling it for higher amounts, sometimes more than double the price of adjacent lots.
It’s still unclear what happened to the millions of dollars that TRM reaped from the scheme.
The various suits seek damages from TRM officials, banks, appraisers and others involved in the deals.
Pisner’s clients aren’t the only buyers who are suing. Dozens more who say they were taken in have hired a Charlotte attorney. And yet another group, of about 300 people who say they were not directly defrauded, is suing a similar group of defendants because they say the fraud allegations damaged the value of their land in the two North Carolina subdivisions and a third where TRM operated in South Carolina.
Since the real estate bubble burst, lots in Cannonsgate that sold for more than $350,000 have traded hands for less than $20,000. Attorneys for the defendants have said the drop has nothing to do with the fraud, and that coastal property has taken similar hits elsewhere.
A federal judge in Virginia had dropped banks as defendants from Pisner’s suit in August 2009, but in October reversed himself and allowed the plaintiffs to refile their case against Bank of America after the disclosure of hundreds of e-mail messages between a loan officer, a TRM official and an independent marketing contractor working for the developer.
TRM was based in Northern Virginia, and federal officials there have been handling the investigation.
The buyers, who paid as much as $400,000 for lots, included several school teachers, high school coaches and firefighters.
According to the documents filed in federal court, TRM officials got unqualified borrowers approved by techniques including generating fake pay stubs and other documents showing higher salaries than they were really earning.
Pisner said her clients are eager for federal investigators to charge others who were involved in the fraud.
Those additional arrests could be on the way. Peter Carr, a spokesman for the U.S. Attorney’s Office in the Eastern District of Virginia, said this week that the investigation was continuing.
Some of those arrested, and some affiliated with TRM who haven’t been, are cooperating with investigators, according to court documents.
Article source: http://newsobserver.com/2011/01/09/908437/land-fraud-plaintiffs-heartened.html
Category: Prison Time