Legal Real Estate Fraud

Legal Real Estate Fraud

 

The open season on the Real Estate owned by seniors and the disabled has to be exposed.    Law Enforcement and the Attorney Registration and Distortion Commission have received dozens of complaints that the guardianship appointment is a ruse to enrich the court appointed guardians and others at the expense of the elderly and the disabled.    Investigators however find that the miscreants have covered their tracks and no clear answer is available.   

A while back I annoyed Mr. Jerome Larkin when I exposed some of the ways to bribe a public official in a manner than appeared legal.    The suggestion that campaign contributions were in many situations a sham has been borne out, but still remains a fool proof scenario that is also protected by the First Amendment.     Bargain hunting in the probate estates has long been another of those dirty little secrets that the political class has depended upon for their off the books remuneration.     The way the scenario works is as follows:

1. A disabled person owns a home.    Prior to the exposure of the ward (disabled person) to the elder cleansing scenario the home is valued at x dollars.    In most cases the home is the product of long years of saving and can be classified as the ward’s retirement account.    Assume the home to be worth $700,000.00 as it was in the Mary Sykes situation.
2. A couple of years of neglect and the ‘cute’ dwelling loses it cosmetic charm.
3. With the cosmetic attractions to the dwelling now in disrepair, the guardian petitions the court to sell the house as the ready cash will run out and the house now is a negative income asset.   The real estate taxes are based upon the dwelling’ former glory, utilities are negative cash flow, and whatever cosmetic work is being done is being performed by the highest priced and lowest performing individuals.     The referral fees are not disclosed – but rest assured they are there.
4. The Court suggests that the premises be marketed and a reputable real estate broker be engaged to market the premises.   Of course no offers are obtained!
5. The Court then orders an appraisal.    An appraisal is an opinion and certain politically active companies are regularly used to give appraisals.    A beautiful report is written, and the $700,000 dwelling is now appraised at $450,000.00.
6. With this reduction in expectation once again the property is marketed.    Again the interest is zero and another political operative (or one of his/her cronies) is called in and he/she produces a very reluctant purchaser who is willing to pay $300,000 for the property provided x, y, and z.
7. A court petition is filed exposing the fact that the real estate taxes as $`10,000 a year, the insurance is $1000.00, the mortgage, if any, is ****, the utilities are **** and the premises need z dollars in immediate roof repairs etc.   The $300,000 is mighty attractive and a sale is OKed.
8. After expenses about $250,000 is returned to the Estate and all the attorneys are now demanding fees for their extra=ordinary services in accomplishing this great feat!
9. The new owner waits a few months until the heirs, family, and neighbors calm down, and he finds a series of straw buyers and an appearance of substantial renovations occur – or the dwelling is torn down and replaced by a McMansion.      The cosmetic repairs now return the property to its prior glory (for a sum in the neighborhood of $50,000) and the saga ends with the political operatives or their friends walking away with over a quarter of a million dollars.

Take a look at the sale of the Mary Sykes home.    So bold and so sure is this type of fraud that even though we have spotlighted Sykes the miscreants had no problem in pulling off a version of the scam.    Gloria Sykes in doing her investigation uncovered that guardian **** husband purchased and inordinate number of real properties from these judicial and quasi judicial sales.    Coincidentally he was disclosed making substantial campaign contributions of a political figure.    Coincidence?

Now that the scam has been exposed – what can be done?      The key is understanding what is going on and remembering that these people are fiduciaries.    The breach of a fiduciary relationship is a taxable event.   The capital gains treatment claimed by the miscreants is ‘tax fraud!’      A fiduciary cannot directly or indirectly profit at the expense of the ward.   

Thus, the laws are in place.   What we need is enforcement!     What we need is to rid the political process of the miscreants and those who act in concert with them.       All law enforcement has to do is pick up the file in the Sykes case and similar cases and it can make a serious dent in the War on the elderly and the disabled.   

Ken Ditkowsky

http://www.ditkowskylawoffice.com/