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Fraud suit filed against Tucson real estate group

Fraud suit filed against Tucson real estate group

Goddard alleges it concocted scheme to dupe investors, lenders, home buyers

Arizona Attorney General Terry Goddard has sued a group of Tucson real estate agents and businesses, alleging the group devised a three-pronged scheme using rent-to-own properties to defraud investors, lenders and home buyers.

The scheme affected more than 130 investors and more than 270 prospective home buyers, bilking them out of between $2 million and $10 million between 2005 and 2007, according to the complaint, filed June 22 in Pima County Superior Court.

"We had a lot of people in the community who wanted to live the American dream, and they were taken advantage of to a tremendous degree," Goddard said in announcing the suit Thursday. "Many of (the home buyers) paid thousands of dollars and ended up with nothing."

The suit includes these names as defendants:

• William "Bill" Anastapolous, owner, Tucson Mortgage.

• Darren Breen, former loan officer, Red House Lending.

• Dave Klein, former loan originator, Tucson Mortgage.

• Amaury Leon, former loan officer, Infinity Funding.

• Thomas Piazza, former loan officer, Tucson Mortgage.

• Andrew Silverstein, former RE/MAX All Executives real estate agent.

• Vince Volpe, designated broker, RE/MAX All Executives.

• Anthony Zandonatti, owner, AZI Rent2Own and

• AZIRent2Own LLC (doing business as Arizona Investments).

• Tucson Mortgage LLC (doing business as Tucson Mortgage).

• VinLan Ventures LLC (doing business as RE/MAX All Executives).

• WGA Enterprises LLC (doing business as RE/MAX All Executives).

Goddard declined to say if there is an ongoing criminal investigation.

The suit claims the group deceived investors — many of whom were entering the investment market for the first time and were either financially unqualified or underqualified — into buying homes that would become rent-to-own properties. Agents offered to cover the upfront purchase costs in exchange for between 10 percent and 50 percent of the profit from the eventual resale of the home, the suit says.

"The language in the (sales) contracts was deceptive and misleading," said Assistant Attorney General Vince Rabago, who is handling the case. "Sometimes the sales price had a moving target on it. On one page there would be a price, with an asterisk, and then on another page would be some convoluted formula tied into determining the price of the home."

Investors were induced into buying homes via a "rent guarantee," meaning they would receive a rent payment every month regardless of whether the property was being rented, the suit claims.

Investors were also told the difference between the rent payments and their mortgage payments would be offset by the sizable down payments being made by the rent-to-own home buyers, but when that down-payment money was depleted, the investor ended up being on the hook for the entire mortgage payment, the suit claims.

Investors were then encouraged to buy additional investment properties to generate cash flow to help offset the loss of rental income. In some cases, investors found that properties had been bought in their names without their knowledge, the suit claims.

About half of the investors affected bought multiple homes, the suit claims.

To ensure these investors' ability to purchase these homes, the scheme involved loan originators processing multiple loan applications simultaneously — what Rabago called "shotgunning" applications — to conceal pending or completed purchases from other lenders to hide the investors' true liabilities, the suit claims.

"Many (investors) got five, six, a dozen loans at a time," Goddard said.

Mark Rubin, a lawyer representing Tucson Mortgage and its owner, William "Bill" Anastapolous, said he didn't know enough about the details of the state's case to say whether the allegations are fair.

He did say, though, that such alleged lending practices wouldn't be possible in today's housing market.

"It's clear to me that an awful lot of people in a lot of places were doing things that were similar to, if not worse than, what the attorney general alleges took place," Rubin said, adding that the two Tucson Mortgage loan officers named in the suit — Dave Klein and Thomas Piazza — are no longer employed there. "There was a lot of bad lending going on."

The final stage of the scheme then targeted prospective home buyers with bad credit, who were assured no credit check would be done and they'd have no problem qualifying for 100 percent financing, the suit claims.

The home buyers were asked for down payments of between $1,500 and $10,000, according to the suit.

The home buyers were led to believe that money was going toward the purchase of their home, when it was actually going to help the investors with their mortgages, Rabago said.

But when a home buyer was unable to qualify for a loan, the tenants would then either have to pay additional funds to extend their purchase agreement and continue renting or vacate the home, thus allowing the homes to be marketed to new tenants, the suit claims. Only one of 270 people affected by the alleged scheme was able to actually buy a home, Rabago said.

Just because a credit check wasn't conducted does not mean the objective was to commit fraud, said Scott Gibson, a lawyer representing Anthony Zandonatti and his rent-to-own companies. "They seem to put it that, if you don't do a credit check, then you're going after people who you know are going to fail," Gibson said. "He was trying to help people. The longer you rent, the more likely it is that you'll qualify."

Gibson said that although Zandonatti did have ownership interests in some of the properties that he found rent-to-own clients for, he was not involved in any actions involving real estate transactions or lending because he wasn't licensed to do so.

"He had none of those skills and none of those licenses," Gibson said. "He never solicited people to buy homes. He wasn't looking for people to buy investment properties. Those ads were only to find tenants for the properties. He was fortunate to be in place when the market was hot and people had properties to rent. He provided a service."

The state began investigating the alleged scheme in 2005 after the Attorney General's Office and the Department of Real Estate started getting complaints from Tucsonans who said they'd tried to buy homes through a rent-to-own plan but were then turned down, Rabago said.

At the same time, he said, it was noticed that foreclosures were occurring in bunches in certain neighborhoods when the housing market was still booming.

Attempts made by the Star to reach others named in the suit were not successful. The number listed for Red House Lending was disconnected, while an official with Infinity Funding said Amaury Leon was not employed there. Contact information could not be found for Dave Klein, Thomas Piazza, Darren Breen, Andrew Silverstein or Vince Volpe.

Contact reporter Brian J. Pedersen at 573-4224 or

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