Homebuilders sold at least 40 of the homes at the center of a $45 million mortgage-fraud scheme being investigated by the state.
But the Colorado Division of Real Estate, the agency handling the probe, doesn’t have jurisdiction over the homebuilders, which it believes sold the properties at inflated prices to investors who then let them fall into foreclosure.
“I get a call at least once a month asking why we don’t regulate homebuilders,” said Erin Toll, director of the state agency.
In the scheme being investigated by Toll’s office, real estate brokers Jerrold Minney and Steven Werner of Broker One Real Estate Professionals LLC allegedly handled 105 transactions that resulted in inflated purchase prices to accommodate large commissions, referral fees or payments to third-party companies.
The homes were spread along the Front Range, and a number of the transactions were concentrated in Commerce City and Aurora.
In most cases, the money paid to the third-party companies was funneled back to the buyers. In all, more than $8 million wound up in the pockets of the buyers and the brokers who handled the deals, according to Toll’s office.
Synergy 2002 REI purchased 98 of the homes, 88 of which ended up in foreclosure.
Minney and Werner could not be reached for comment.
Now, the Internal Revenue Service, the FBI and the Department of Revenue are also investigating the scheme, Toll said.
“They’ve contacted us and asked for our files,” she said.
In 2006, Atlanta-based Beazer Homes, which has since pulled out of Colorado, sold 24 of the homes in Commerce City, Castle Rock and Brighton. Shea Homes sold eight of the homes in Commerce City, and Fort Collins- based Grace Builders sold eight of the homes in Loveland. Representatives from Beazer and Shea could not be reached for comment. The phone number for Grace has been disconnected.
A number of other limited-liability companies also sold homes, but it could not be determined whether they were homebuilders.
When a property sells at an inflated value, it harms homeowners throughout the neighborhood.
“There’s a ripple effect,” said Zach Urban, director of communications and operations at the Division of Real Estate. “Mortgage fraud doesn’t just stop at the property line. If you bought your property months or years after these transactions were completed, your appraisal is based on these comparables.”
Real estate broker Rudolf Krupka, who is among those sanctioned by the state agency for his involvement in the scheme, said he was duped into participating. He said he was approached by an attorney licensed in New York and Colorado about putting together a deal with Beazer. She needed a licensed real estate broker to handle the paperwork.
“I had nothing to do with putting these people together,” he said. “I had no interaction with any of these parties or transactions. I don’t even know what happened with these homes. I was stupid to do what I did, but I looked at it as a marketing fee because I wasn’t the broker. The real estate commission looked at it as receiving a commission. This may cost me dearly.”
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
