Deceit, rigged bids and extortion: How HOA foreclosures can open the door to predators – Charlotte Observer

By Ames Alexander
Charlotte Observer

A federal lawsuit focused on an intricate bid-rigging and extortion scheme has helped illuminate another pitfall of HOA foreclosures: They can leave homeowners vulnerable to profiteers. The four plaintiffs in the lawsuit, all North Carolina homeowners who fell behind on their homeowners association dues, were victimized by a network of people who “were unjustly enriched by their illegal conduct,” U.S. District Judge Catherine Eagles concluded last year, after a federal jury ruled in favor of the homeowners.

A Cary-based limited liability company known as The Estates engaged in bid-rigging in order to limit competition and buy foreclosed houses at lower prices, jurors found.

But before the sales closed, high bidders sometimes approached homeowners with an offer: They would not take their homes if the homeowners paid them tens of thousands of dollars.

“This was an elaborate scheme to take advantage of people who were in a horrible period of their lives,” said Chapel Hill attorney Jim White, who represented the plaintiffs.

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Jim White
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Jim White helps people and companies facing serious financial injury by bringing and defending lawsuits and representing debtors in bankruptcy. He has successfully taken on banks, large financial institutions and other corporations in “David v. Goliath” cases. You can reach him at 919-246-4676.