This is an old story. How do you qualify for these loans? Give the Senator a nice campaign contribution.
The money is unreal. Everyone wants to be Donald Trump, however, few inherited the money or the business to be Trump. You have to give him credit for being ruthless and a person who has the morals of a New York liberal.
Having some experience with these types of projects let me tell you how they work. A developer finds a parcel of land and then starts looking for financing. The developer can be 1 - 10 in honestly. If he is a 1, the probability of the deal being successful is almost zero as there are massive problems with any deal. These problems usually are government induced and due to the avarice of the political types. As an example - zoning. To get zoning you have to hire an attorney specialist. This attorney has no more legal skills than any other attorney, but he has the 'in' to payoff the people involved in determining zoning.
Of course dealing with the various trade unions requires compromises. It is not uncommon to be required to enhance the union president's bank account a bit or face labor actions. Insurance has to be purchased from the RIGHT insurance broker, and closing have to be referred to proper law firms.
I guess you get the idea.
If you can look the other way sufficiently and still stay below 5 on the scale you are an HONEST developer and you can still sleep at night; however, in certain areas of the US the corruption is so bad that an HONEST development project is almost impossible. Florida is one of those jurisdictions. Here in Illinois you need guidance and good common sense to not only accomplish the project but stay below 5. Staying out of Cook County is helpful.
Once a developer crosses the 5 mark it is not long before the projects start to become ponzi schemes and the political elite demand more and more.
In the Fairway Preserve situation, the developer got caught when the bottom feel out of the condominium market. He had purchased a complex way over value at $100,000 a unit, AND with the bottom out he could not sell legitimately the units for $365,000 a unit and there was no appreciation. Worse yet, the cosmetic cleanup (prep) was relegated to only necessities. This guaranteed that there would have to be misrepresentations and fraud.
As there is larceny in most of us, my clients (more than 1/2 a hundred strong) were lured into the trap. Financial institutions urged to make loans without checking valuations, credit, etc all committed for 100% loans ($365,000) and all were guaranteed a $15,000 profit for making the loans, bundling them, and turning them over to brokerage houses to sell the bundled mortgages as MORTGAGE BACKED SECURITIES to the public.
I think that you can add up your own experiences to see the number of criminals in the mix. (This went on openly and notoriously for a bunch of years. The developer is a major contributor to the dominant political Party and enjoys (enjoyed) virtual immunity from State prosecution) His lawyer has absolute immunity from the Florida Bar.
Had you or I engaged in this transaction we would have been in jail about day 3.
*******
Ken Ditkowsky
From: To:
Sent: Friday, April 29, 2016 8:45 AM
Subject: FYI - VT - VT, feds allege 'massive' fraud at Jay Peak Inc. Leaders of the Jay Peak Inc. EB-5 development face federal fraud claims and a criminal investigation
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