US Legal Solutions Pursues Case Alleging Fraud Against Hispanic Homebuyers
Today, it seems almost commonplace to read articles or see news stories or even talk to friends and family about their homes and home loans. With the big news about Freddie Mac and Fannie Mae, and the subsequent related cases throughout the country, homebuyers and homeowners have faced substantial challenges in the past few months. Before the explosion of such problems nationwide, several St. Louis families came to know firsthand a similar type of fraud and scam.
In 2006, US Legal Solutions filed suit against multiple defendants, on behalf of more than 15 plaintiffs. The matter is a civil suit in the St. Louis City Circuit Court, and the plaintiffs are all alleged to be victims of a scheme, masterminded by Defendant AJ Adewunmi with the collaboration of several others who also named as defendants in the case. In short, the scheme amounted to the fraudulent inducement to contract for the purchase of homes in the City of St. Louis, which also represents a certain pattern of behavior that constitutes an unlawful merchandising practice.
Brief Overview:
In their suit, plaintiffs all allege that AJ Adewunmi was a real estate investor who also masqueraded as a real estate agent (licensed as a salesperson) pretending to assist first time home buyers in the purchase of a home. The plaintiffs were each victims of the scheme, and were either Hispanic or related to an Hispanic during the purchase of their home. Each plaintiff had no experience in purchasing real estate, and more than half of the plaintiffs did not speak nor read English at the time the events occurred. While AJ Adwunmi pretended to be interested in helping newly arrived immigrants realize the American Dream, he was clearly motivated by the prospect of purchasing low value homes and flipping them in a matter of weeks, and then selling them for inflated prices, resulting in profit margins upwards of one hundred percent.
In order to accomplish this, it is believed that AJ Adewunmi identified a vulnerable target community: the Hispanic immigrant community in St. Louis, a group of individuals who he knew were ill-equipped to understand the process, who would come to be wholly trusting and dependent upon AJ and his assistants, and whom he could use as pawns to obtain financing they were completely unqualified to receive to purchase homes that no experienced home buyer would buy under terms no informed person would accept. AJ Adewunmi hired two Hispanic assistants, which he used to recruit buyers in this community and aid AJ in leading the victims down his path of ultimate financial devastation.
Plaintiff's Petition sets out that AJ's scheme has many parts: recruiting the plaintiffs as buyer/clients of his real estate practice; concealing his interest in the homes showed to plaintiffs by keeping them titled in the name of the company (defendant Cots Investments, Inc.), which was wholly owned by AJ Adewunmi and his brother, and failing to make any disclosure of this fact or, if any disclosure at all, it was made not until closing and in English only; showing plaintiffs only homes that were owned by his company Cots, and steering them away from homes not owned by Cots; usurping the loan application process by shopping for loan agents who would submit a loan application based on information supplied entirely by AJ Adewunmi and his assistants, without contact with the plaintiffs/buyers; manufacturing and submitting fraudulent information to support the loan application, such as false employment information, false W-2s, false paystubs; failing to advise plaintiffs of their rights as buyers in the real estate transaction process, advising them to sign contracts for purchase of these homes without sales prices or other material terms filled in, ignoring the budgetary limits voiced by plaintiffs and forging plaintiffs' signatures on contract, loan and closing documents; usurping the role of the title company closing agent and conducting a closing himself or through his assistants, such that the plaintiffs were prevented from having contact with a title company employee and failing to explain documents signed at closing; misleading plaintiffs as to various improvements that were promised to be made in the house purchased or defects to be fixed, including at times concealing the existence of known defects.
As a clear, proximate and direct result of this scheme, the plaintiffs allege that they were unwittingly induced to enter into sales agreements, with AJ Adewunmi's own company being the seller, to purchase houses that were out of their affordable price range and which had a range of structural and/or cosmetic defects, and in many cases were over priced for the value received. Additionally, because of this scheme, each plaintiff was induced to enter into a 30-year contractual obligation to make payments they could not afford and which exceeded the amount that they had told AJ Adewunmi and his assistants they could afford or wanted to pay.
Several plaintiffs have now lost their homes to foreclosure and a few others teeter on the verge of losing their homes, suffering the inevitable financial ruin that comes with foreclosure. Equally certain, as a result of this scheme, AJ Adewunmi profited enormously.
Current Status:
The matter is currently pending in the St. Louis City Circuit Court. We hope to go to trial by the end of the year.
In the News:
An article published in the Riverfront Times, written by Chad Garrison, titled "Mi casa? Sue casa!", presents an overview of the lawsuit that was filed in 2006. It can be viewed online from the RFT website, which you can see here, or for a .pdf file of the same, you can click here.
Rebecca Rivas, a writer for the Arch City Chronicle, also wrote an article about the case. Her article, titled "Quarrels Within Hispanic Community Allow Crime to Flouirsh" is available online here, and a .pdf file of the same is availble here.
In 2006, US Legal Solutions filed suit against multiple defendants, on behalf of more than 15 plaintiffs. The matter is a civil suit in the St. Louis City Circuit Court, and the plaintiffs are all alleged to be victims of a scheme, masterminded by Defendant AJ Adewunmi with the collaboration of several others who also named as defendants in the case. In short, the scheme amounted to the fraudulent inducement to contract for the purchase of homes in the City of St. Louis, which also represents a certain pattern of behavior that constitutes an unlawful merchandising practice.
Brief Overview:
In their suit, plaintiffs all allege that AJ Adewunmi was a real estate investor who also masqueraded as a real estate agent (licensed as a salesperson) pretending to assist first time home buyers in the purchase of a home. The plaintiffs were each victims of the scheme, and were either Hispanic or related to an Hispanic during the purchase of their home. Each plaintiff had no experience in purchasing real estate, and more than half of the plaintiffs did not speak nor read English at the time the events occurred. While AJ Adwunmi pretended to be interested in helping newly arrived immigrants realize the American Dream, he was clearly motivated by the prospect of purchasing low value homes and flipping them in a matter of weeks, and then selling them for inflated prices, resulting in profit margins upwards of one hundred percent.
In order to accomplish this, it is believed that AJ Adewunmi identified a vulnerable target community: the Hispanic immigrant community in St. Louis, a group of individuals who he knew were ill-equipped to understand the process, who would come to be wholly trusting and dependent upon AJ and his assistants, and whom he could use as pawns to obtain financing they were completely unqualified to receive to purchase homes that no experienced home buyer would buy under terms no informed person would accept. AJ Adewunmi hired two Hispanic assistants, which he used to recruit buyers in this community and aid AJ in leading the victims down his path of ultimate financial devastation.
Plaintiff's Petition sets out that AJ's scheme has many parts: recruiting the plaintiffs as buyer/clients of his real estate practice; concealing his interest in the homes showed to plaintiffs by keeping them titled in the name of the company (defendant Cots Investments, Inc.), which was wholly owned by AJ Adewunmi and his brother, and failing to make any disclosure of this fact or, if any disclosure at all, it was made not until closing and in English only; showing plaintiffs only homes that were owned by his company Cots, and steering them away from homes not owned by Cots; usurping the loan application process by shopping for loan agents who would submit a loan application based on information supplied entirely by AJ Adewunmi and his assistants, without contact with the plaintiffs/buyers; manufacturing and submitting fraudulent information to support the loan application, such as false employment information, false W-2s, false paystubs; failing to advise plaintiffs of their rights as buyers in the real estate transaction process, advising them to sign contracts for purchase of these homes without sales prices or other material terms filled in, ignoring the budgetary limits voiced by plaintiffs and forging plaintiffs' signatures on contract, loan and closing documents; usurping the role of the title company closing agent and conducting a closing himself or through his assistants, such that the plaintiffs were prevented from having contact with a title company employee and failing to explain documents signed at closing; misleading plaintiffs as to various improvements that were promised to be made in the house purchased or defects to be fixed, including at times concealing the existence of known defects.
As a clear, proximate and direct result of this scheme, the plaintiffs allege that they were unwittingly induced to enter into sales agreements, with AJ Adewunmi's own company being the seller, to purchase houses that were out of their affordable price range and which had a range of structural and/or cosmetic defects, and in many cases were over priced for the value received. Additionally, because of this scheme, each plaintiff was induced to enter into a 30-year contractual obligation to make payments they could not afford and which exceeded the amount that they had told AJ Adewunmi and his assistants they could afford or wanted to pay.
Several plaintiffs have now lost their homes to foreclosure and a few others teeter on the verge of losing their homes, suffering the inevitable financial ruin that comes with foreclosure. Equally certain, as a result of this scheme, AJ Adewunmi profited enormously.
Current Status:
The matter is currently pending in the St. Louis City Circuit Court. We hope to go to trial by the end of the year.
In the News:
An article published in the Riverfront Times, written by Chad Garrison, titled "Mi casa? Sue casa!", presents an overview of the lawsuit that was filed in 2006. It can be viewed online from the RFT website, which you can see here, or for a .pdf file of the same, you can click here.
Rebecca Rivas, a writer for the Arch City Chronicle, also wrote an article about the case. Her article, titled "Quarrels Within Hispanic Community Allow Crime to Flouirsh" is available online here, and a .pdf file of the same is availble here.
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