Attorney General Corbett announces lawsuit in Pittsburgh area real estate and mortgage fraud case

HARRISBURG, Nov. 16, 2007 – Attorney General Tom Corbett today announced that the Attorney General’s Bureau of Consumer Protection has filed suit against a Pittsburgh area man, along with several of his businesses, accused of orchestrating a multi-million dollar mortgage and real estate scheme in Allegheny, Beaver and Butler counties.

Corbett said the 13-count civil complaint was filed on November 15, 2007, in Allegheny County against Easy Realty Solutions Inc., Easy Realty Solutions LLC (doing business as Fieldstone Real Estate Co.) and Guaranteed Results Co., along with James C. Platts, the only known employee or officer for these companies.

“Consumers came to Mr. Platts and Easy Realty looking for homes and a piece of the ‘American Dream’,” Corbett said. “Instead, their dreams of home ownership quickly turned into nightmares of inflated prices, undisclosed fees and bogus legal filings, all intended to squeeze as much money as possible from trusting consumers.”

Corbett said that since January 2004, Platts and his companies have allegedly received over $2 million in payments from consumers related to real estate sales and have extended or received at least 113 second mortgages, valued at over $1.2 million, despite the lack of a real estate license or secondary mortgage loan license. Additionally, Platts and his companies are accused of wrongfully filing more than 150 legal notices against property sellers in an effort to extract additional payments when their homes were sold.

Corbett said the Bureau of Consumer Protection is also seeking a preliminary injunction halting all unlicensed or deceptive real estate and mortgage activities by Platts and his companies, as well as freezing all bank accounts and assets. Additionally, the injunction will seek to have any unlawful second mortgages or wrongfully filed legal notices removed from the public record, and prevent Platts from accepting future payments for any of the unlawful second mortgages or unlicensed real estate transactions.

Unlicensed Real Estate Sales

Corbett said that Platts and his companies allegedly schemed to bypass state licensing requirements for real estate brokers.

According to the lawsuit, Platts and his companies used their website (www.easyrealtysolutions.com), newspaper classified ads and direct mail solicitations to regularly advertise the purchase or sale of properties, despite the lack of a real estate broker’s license in Pennsylvania. Some of the listings shown on the Easy Realty website were actually properties listed by licensed real estate brokers in southwestern Pennsylvania.

Corbett said that, Platts and his companies are accused of inflating the prices of various properties – concealing the true asking price for the homes and showing only inflated “sale prices,” which were in excess of the actual listed prices for the properties.

To date, Platts and his companies have allegedly received in excess of $2,027,291 in payments as the result of various unlicensed real estate transactions.

Unlicensed Second Mortgage Lending

Corbett said that in situations where buyers needed additional money to purchase properties, Platts and Easy Realty would allegedly extend buyers second mortgage financing – despite the lack of a secondary mortgage loan license.

According to the suit, many of the second mortgages were disguised as “seller held second mortgages,” even though sellers were not aware of the mortgages and had not given their consent to offer any financial assistance to the buyers. After arranging for the “seller held second mortgages,” the mortgages were immediately assigned to Platts and his companies.

In other instances, Platts and his companies directly offered to extend second or third mortgage loans to buyers.

Corbett said that to-date, Platts and his companies have extended or have been assigned at least 113 second or third mortgages, worth at least $1,220,197.

Lis Pendens

Corbett said that Platts allegedly used legal filings to extract additional payments from property owners wishing to sell their homes. The filing, known as a “lis pendens,” serves as notice of a pending civil lawsuit against a property owner, and is used to establish a claim against that property.

According to the lawsuit, Platts filed at least 159 lis pendens notices against property owners in Allegheny, Beaver and Butler counties, even though it appears that no legal dispute existed with those individuals.

The filings served to cloud the titles for those homes, preventing any sale of those properties until the lis pendens were satisfied or settled.

Corbett said that Platts and his companies are accused of collecting “pay-off fees,” ranging from $1,198 to $78,599, in order to satisfy lis pendens filings and allow home sales to be completed.

According to the lawsuit, the fees were not clearly disclosed in various sales agreements, and consequently many buyers and sellers had no knowledge of the substantial payments being made to Platts. To date, Platts and Easy Realty have allegedly collected at least $1,813,025 in lis pendens pay-off fees.

Other Charges

Corbett said that Platts and Easy Realty are accused of deceptive advertising; failing to disclose the terms of real estate transactions to consumers; failing to provide buyers with federally required disclosures; fraudulently negotiating sales with lenders and the unauthorized practice of law.

“For many people, our homes are our most valuable possessions, which makes them prime targets for scam artists seeking to take advantage of unsuspecting consumers,” Corbett said. “The Attorney General’s Bureau of Consumer Protection will work vigorously to protect the rights of all of the consumers caught up in this real estate and mortgage scheme, and we encourage additional consumers to contact our office if they believe they are victims of similar scams.”

Corbett added that the Office of Attorney General has alerted authorities in Florida, where Platts is reportedly engaging in similar activities.

Corbett said the civil suit was filed today in Allegheny County Court of Common Pleas. The case is being handled by Deputy Attorney General Amy L. Schulman of the Attorney General’s Bureau of Consumer Protection office in Pittsburgh.

Consumers can file complaints online at the Attorney General’s website, www.attorneygeneral.gov, or by calling the Attorney General’s Consumer Protection hotline, at 1-800-441-2555.