Court upholds ruling against real estate flippers
|May 18, 2005|
Sellers, lenders, appraisers liable to pay restitution, penalties
The perpetrators of a real estate flipping ring in Maryland will be held liable for penalties and restitution, Maryland Attorney General J. Joseph Curran Jr. said Monday, after the Court of Appeals affirmed an October 2002 ruling made by the Attorney General's Consumer Protection Division.
The Division in 2002 determined that four men and five companies violated Maryland law when they used unfair and deceptive practices to sell homes to consumers, usually first-time home buyers with poor credit.
Lee Shpritz, a property investor, bought and sold properties though the Baltimore-based companies L&R Properties, West Star Properties and West Star Co. LLC, according to a statement from the Attorney General's office. The houses sold by Shpritz were financed by Timonium-based mortgage lender American Skycorp, which was owned by Lee P. Woody III. Appraisers that were used for these transactions included John M. Morgan Jr., Michael Almony and Almony Appraisal Services LLC.
Most of the houses sold were in or around the Belair-Edison neighborhood in Baltimore City, Md.
The court upheld a finding that Lee Shpritz and his companies, American Skycorp, Lee P. Woody III, and John M. Morgan Jr., had engaged in a flipping scheme to sell and finance properties at inflated values. Additionally, the court upheld a finding that Michael Almony and Almony Appraisal Services LLC misled home buyers by submitting misleading inflated appraisals.
"Property flipping hurts home buyers and creates significant problems for the neighborhoods in which the homes are located," Curran said in a statement.
On an issue the court hadn't previously ruled on, the Court of Appeals held that the sellers, the lender and one of the appraisers were properly held jointly and severally liable for restitution under the Maryland Consumer Protection Act.
The court remanded the case for further proceedings relating to determining the amount of restitution.
Copyright 2005 Inman News