Condo sale by U.S. Senate hopeful raises questions, experts say (Jeff Greene/Florida)

[seafan]

Source: Ft. Lauderdale Sun-Sentinel

12:16 p.m. EDT, August 7, 2010


To Democratic U.S. Senate candidate Jeff Greene, the 2006 sale of a condo complex he owned in a small California desert town was "a very profitable deal.''
Greene says he had no idea that the buyer, James McConville, financed it with what federal prosecutors allege are fraudulent loans. McConville is now facing federal charges for running a wide-ranging mortgage fraud scheme on condos throughout California.

Greene said this week he has not been questioned by authorities or asked to turn over documents. He has not been charged with any wrongdoing.
"I sold this guy a building,'' he said. "It's unfortunate that he ripped off people, but that's just the way it is.''

The deal left a messy aftermath – millions of dollars in mortgage defaults and hundreds of displaced residents. Real estate experts told the Sun Sentinel the structure of the sale was highly unusual.
"This is different than anything I've ever seen,'' said Jack McCabe, a Deerfield Beach real estate analyst who has reviewed hundreds of condo deals. "There is something really questionable here that merits additional investigation.''

Greene said he sold the entire complex to McConville, but only about one-third of the units were transferred to McConville's company, property records show. The remaining units were signed over by Greene to alleged straw buyers that McConville is accused of using to fraudulently obtain mortgages.

Read more: http://www.sun-sentinel.com/news/florida/fl-greene-condo-sale-20100806,0,4120859,full.story

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It's time the truth about Jeff Greene sees the bright light of day.

[lib2DaBone]

1. This guy is not a Democrat. He was a Repuke for years ....

There is nothing wrong with being a millionaire... but we have enough Blue Dogs and Conservadems.

We need real "Progressive" candidates.

[pscot]

2. That sounds indictable

:rofl:

[GodlessBiker]

6. Indeed. Mortgage fraud.

[tsuki]

3. I got another sleazy smeer of Meek from this oily SOB. Please, California,

call him home.

[ProgressiveProfessor]

4. I know the property in question, a lot of people got hurt by the scam

Not clear if Greene knew about it, but it was a very sleazy deal that became seriously unraveled. To call it very low income housing is to be kind.

[seafan]

5. Jeff Greene: "I wouldn't know him (McConville) if I saw him."

Floridians, do you want this for your next US Senator?


Jim McConville is the skeleton in Jeff Greene's closet.




This story is now breaking late this afternoon and evening in the Miami Herald, August 7, 2010 and in the St. Petersburg Times, August 8, 2010.


And there is a feast of detail for Floridians to inspect.




(Times photos, special to tampabay.com)
Greene, top photo, converted military housing to 300 condos in Death Valley, Calif., with James McConville, bottom photo.


California deal put Jeff Greene on front line of mortgage mess

RIDGECREST, Calif. — Democratic U.S. Senate candidate Jeff Greene says he had nothing to do with creating the sub-prime mortgage mess that made him fabulously wealthy.

He was simply a savvy investor who "could see that the housing market was imploding" and lucky enough to make more than $500 million by betting against it.

But he wasn't just a spectator to the housing collapse. Four years ago, Greene was party to precisely the kind of deal that decimated the market.

Greene insists he did nothing wrong. Yet the way he handled the deal left an opening for massive fraud and put him uncomfortably close to a man now under federal indictment.

The setting: this remote desert town at the edge of Death Valley. At a project called La Mirage, Greene converted 1950s-era military housing from apartments to 300 condos. In the summer of 2006, just as he was starting to make his bets against the sub-prime housing market, official records show that Greene's company unloaded the units, some for as much as $165,000. The buyers turned out to be people who never intended to own the properties or pay back the loans.

Local residents, who referred to the complex of single-story duplexes and triplexes as "Criminal Gardens," were stunned at the sale prices. Even in the midst of real estate hysteria, they seemed over the top.

Within 18 months, all of the La Mirage buyers defaulted on their loans and every condo was in foreclosure. Low-income tenants, still paying rent and unaware their apartments had been sold, found themselves on the street. Lenders recouped about $25,000 per unit when the properties went up for auction. Banks — and ultimately U.S. taxpayers who bailed out the banks — were left holding the bag on nearly $34 million of worthless paper.

Now James Delbert McConville, Greene's counterpart in the transaction, is in jail facing criminal charges of conspiracy and money laundering stemming in part from the La Mirage transaction. The assistant U.S. attorney says the FBI is still trying to put a dollar figure on McConville's alleged fraud, and is ramping up its investigation of the La Mirage deal.

Greene, 55, is in a tight race with U.S. Rep. Kendrick Meek in the Democratic U.S. Senate primary. The election is Aug. 24.

In an interview Friday with the Times, Greene strenuously denied any responsibility for the failed loans at La Mirage.

.....

Greene said he never met McConville. He said his only direct involvement was signing blank deeds and sending them to his escrow company — a practice he calls common but which one expert says is risky at best. By signing blank deeds, longtime appraiser Richard Hagar said, Greene effectively enabled the fraud.

Greene said he was unaware that the blank deeds were recorded showing him getting as much as $165,000 a unit from individual investors who turned out to be straw buyers.

"I'm always signing blank deeds. That's how an escrow company works," Greene said. "If he (McConville) put the deeds in other people's names, that's his business. All I care about is that I get my money."

He blames lenders who signed off on unrealistically high loans for the La Mirage condos.

"Obviously to me, it's the failure of Washington to regulate the lenders," he said. "That's why I want to get into the Senate."

This is the type of pathology we must root out before it takes hold. The lies. The greed. The fraud. The arrogant sense of entitlement. The bankruptcy of conscience.

This guy isn't running for Senate for the money. It's about a sense of omnipotent power over all others. We are nameless, faceless, common vermin to this man.

Official documents show Greene's corporation sold about two-thirds of the units to individuals for $145,000 to $165,000 in a flurry of deals in July and August 2006.

The records also show that Greene sold the remaining condos to McConville's corporation on Aug. 15, 2006, for $7.1 million, or about $65,000 a unit. McConville quickly flipped the condos to 28 individuals for the same prices Greene had received: $145,000 to $165,000 each.

That wasn't the only similarity: Half of McConville's buyers were the same people who had purchased units from Greene.

One woman, a notary whose stamp appears on many of the sales, bought seven condos from Greene and five from McConville, while her twin sister picked up three more, including two Greene properties. Total purchase price of the 15 properties acquired by Agnes Kantere, 47, and her twin: $2.3 million.

But Greene and his broker said it didn't happen that way at all, regardless of what the public records show. Greene sold all the units to McConville, they say, and it was McConville alone who immediately flipped them for more than double the price to straw buyers.

Jeff Louks, Greene's agent who handled the deal, said Greene made $20.95 million on it "and not a penny more."

"We probably do 40 to 50 deals a year and this is one deal where the buyer allegedly was doing things which were unscrupulous," Louks said. "It's unfortunate but Jeff Greene is very ethical and he had no way of knowing."

Louks said he checked McConville's references but didn't do a criminal check, which would have shown McConville pled guilty to insurance fraud in 1998.

He didn't do a criminal check as a mutual courtesy, obviously.

Richard Hagar is an appraiser in Seattle who has trained state and federal law enforcement officials on the intricacies of mortgage fraud.

When Greene put his signature on a deed, as he did on nearly 200 sales to individuals, Hagar said, he was attesting to the accuracy of the underlying documents. By signing the deed, Hagar said, "Greene is admitting to responsibility. He has to look at that HUD-1 and say this is a true and accurate accounting of the money flow."

Frank San Pedro was a fraud investigator for the lender Countrywide from 2004 until 2008 and is now a consultant. Told that Greene said he signed blank deeds on the La Mirage deal, which allowed McConville to play games with the documents, San Pedro said: "If you're in business, you are mindful of what you sign because there are consequences for what you do. It's almost like saying you don't care what happens, you just did what you needed to do."

Greene unabashedly admits he made money betting against bad loans. But he refutes any suggestion that he profited on the losses at La Mirage.

"There's no possible way," he said. "Most of what I invested in was the ABX index, which has nothing to do with any particular mortgages."

Oh, no. It's not HIS fault. He came by his money H O N E S T L Y. We can all go away now.

Pat Flannery is an accountant and real estate agent with more than 32 years of experience in the San Diego area. In March, he began writing about the links between McConville and Greene on his blog (www.blogofsandiego.com) after following McConville's use of straw buyers in two San Diego projects.

"I saw Greene on MSNBC saying he wasn't a developer, he was just an investor, but when you're the principal in a condo-conversion, you're a developer," Flannery said. "And the Ridgecrest property was great because I could trace it from where Greene bought it to the end product, which was tens of millions of dollars of phony loans."

From Flannery's point of view, the only benefit of Greene's candidacy is that it has exposed the La Mirage deal to wider scrutiny.

"It would never have gone farther than my blog" otherwise, Flannery said.

Thanks to Mr. Flannery for his tireless dedication and persistence. He may have made a difference in Florida's upcoming US Senate primary. Mr. Flannery, you have emboldened many more people to stand up for what is right.

On July 30, McConville appeared at a detention hearing in U.S. District Court in Oakland dressed in a yellow uniform with Alameda County Jail on the back. Federal prosecutors have opposed his release on bail, calling him a flight risk. McConville was apprehended in late June in a small town outside Bakersfield, more than a month after the indictment, with "three large rolls of cash in his pocket," according to a court filing. Found in his storage locker were papers suggesting he had money stashed in accounts in Switzerland, Sweden and Cyprus and had also purchased large quantities of gold, silver, Iraqi Dinar and Vietnamese Dong.

Assistant U.S. Attorney Keslie Stewart told the judge the FBI was still trying to calculate the scope of McConville's alleged fraud, which she said had pulled more than $11 million from the two San Diego projects.

"We're just beginning to look at Ridgecrest," she said.

Greene said he has not been questioned by the FBI about his dealings with McConville.

"I was happy to sell the property and shocked to find out about it (the collapse)," he said. "But I resent the suggestion I did anything unethical. I wouldn't know him (McConville) if I saw him."

First Greene denied knowing an employee who was injured by electric shock as he worked on Greene's yacht, and who endured 8 months before getting his medical bills paid by Greene.

Second, Greene denied that his boat damaged an extensive swath of the famous barrier reef off the coast of Belize in 2005, in spite of extensive publicity about it at the time, eyewitness accounts, scientific surveys, a large case file and statements by his own representatives.

Now, he denies knowing Jim McConville, his now-indicted partner in extensive fraudulent real estate deals in California, from which Greene profited off of credit default swaps, pocketing upwards of $800 Million dollars.




Jeff Greene is locked in a vise.


Early voting in Florida for US Senate begins Monday.


Floridians, do you want this for your US Senator?