April 7, 2013

A Day of Rest Should be Observed with Real Estate

Today is Sunday, and that means… no A-Z Blog Challenge today. The schedule’s been set that we do a new letter every Monday through Saturday, and on Sunday you can go to church or look at Open Houses.  Or in the case of this story, courtesy of Burbed reader nomadic, you can combine both.

Judge Rules Against Bay Area Church Leaders In Real Estate Case

130406-vallejo-marqueeVALLEJO (KPIX 5) – A California state judge has ruled against two leaders of a prominent Bay Area church accused of bilking parishioners in an alleged investment scheme.

The judge ruled that General Assembly Church leaders Lacy Hawkins and Michael Parker operated a real estate investment company without a license, in violation of securities law.

KPIX 5 has been investigating Lacy Hawkins and Michael Parker’s involvement in the business deal, that church members said cost them millions of dollars. General Assembly Church has locations in Union City and Vallejo.

Hundreds of parishioners mortgaged their homes and drained retirement accounts on the promise of investment returns as high as 30 percent. Some said they were even promised salvation.

Yes, it’s not enough to have a religious leader in a fraud case, it has to have a realty component. And this one’s actually pretty interesting. Seems this was one of those We’re Here To Run Your Life For You kinds of churches, where you can’t even wipe your nose without permission.

130406-vallejo-churchAnd the Supreme Leader pretty much was ordering parishioners to buy into their real estate trusts or tout them to each other.  The investment vehicles weren’t exactly transparent about the real estate in them.  Unless you count the Woodlands of Ascension project they bought in Louisiana. Which was, mo konmprann, swamp.  Leadership blamed lack of progress on Katrina, but the Army Corps of Engineers said the land was always swamp.

The victims are claiming they were brainwashed into investing with the church’s leaders. We’re imagining just what kind of techniques were used. Maybe “Buy now or you’ll be priced out forever and that, my friends, is the definition of HELL.” 

Also the church leadership quickly realized that paying the real estate agent (who was part of the church) regular commissions for flipping properties was a loser… for them. The agent went from $20,000 a month to $1600 biweekly, as straight salary.  Meanwhile, the church reported to the IRS that they had paid him the commissions, so he owes more than a million in taxes.

The investment’s books were not open to the membership, either, so they didn’t realize that the vehicles were classic Ponzi schemes.

This is an Open Thread. Are you attending religious services this weekend, Open Houses, both, or neither?  And we’ll be back with the next letter in the Challenge tomorrow, G for God. Or Grab. Or both.

Comments (2) -- Posted by: madhaus @ 5:02 am

2 Responses to “A Day of Rest Should be Observed with Real Estate”

  1. Jb Says:

    Of the four houses we looked at this morning the one flip stands out. My favorite kitchen feature was the New Granite Counters on old nearly impossible to open cabinets. They pulled up the hall bathroom floor and painted it purple. Dark purple. The topping was the giant dog turd someone is going to step on in the yard. Lovely.

  2. Tom Paine Says:

    I’m glad the church leaders did not conflate a 30% return with salvation, most investors would. I did look at open houses and saw a nice one. 2077 Burnside Rd, Sebastopol Ca 95472. $1.629MM, I checked my pickup’s ashtray and came up $1,628,997.21 short.


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