8 Say They Were Suckered by Condo Ring

PHOENIX (CN) – Eight people claim in court that they were suckered for “hundreds of thousand dollars” in real estate seminars and “millions of dollars” in condos that a ring sold them for four times the “true value of each property.”
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     Eight “unsophisticated and unsuspecting ‘student’ investors” claim that James Smith and the Smith Success Group’s real estate seminars induced them to trust Darel Snyder and Brycen Snyder, who in turn induced them to buy condos, allegedly for 20 percent below market value, though actually at 400 percent to 450 percent above market.
Lead plaintiffs Jan and Bonnie Aitken sued a long list of defendants in Maricopa County Court.
Lead defendant James Smith is a resident of Utah, Florida and Arizona, and the Snyders live in Arizona, according to the complaint.
The plaintiffs claim that Smith and the Smith Success Group “used, to their advantage, the high degree of trust and confidence they created during the ‘educational’ process to manipulate their students to meet with and trust” the Snyders.
Smith and the Snyders bought condos at a price “exponentially higher than the true market value” through a “fraudulent real estate appraisal” prepared by a licensed Arizona real estate appraiser, “and which set the appraised value, or simply creating fraudulent deeds of trust, the substance of which identified a purchase price that was the substantially higher than market value,” the complaint states.
After the plaintiffs agreed to buy one or more condos, they say, “the Snyder defendants required each plaintiff to utilize the services of [defendant] 1st Metropolitan – a company which held itself out as a real estate mortgage broker, to obtain numerous ‘Alt-A’ loan products from said defendants’ then ‘preferred lender,’ – i.e., one or more of the bank defendants … [that] would only make these ‘special loans’ to the Smith defendants’ students.”
The plaintiffs claim that the appraisals were “submitted to the bank defendants so as not to create a ‘red flag’ during the underwriting and approval process – hence, these appraisals were never even considered because each and every one of the plaintiffs’ loan applications were guaranteed to be approved, by one particular ‘senior underwriter,’ who was independently contracted by the bank defendants, and at the same time paid by Smith defendants and Snyder defendants to illegally approve each of these loan applications.”
After the plaintiffs bought their condos, Smith or the Snyders “unloaded” their condos “for a price which caused the real estate ‘comps’ to drastically decrease in value,” the complaint states.
The plaintiffs claim that “one or more individuals who were secretly affiliated with Smith defendants and/or the Snyder defendants contacted several Smith Success Group students and offered to assist them with ‘short selling’ their particular condominium unit. Plaintiffs recently discovered that those who opted to ‘short sell,’ ended up ‘short selling’ their unit to another Smith Success Group student, on terms and conditions which were respectively identical to their – albeit at a price which was once again artificially set.”
The plaintiffs say they paid about $310,000 for their condos, whose market value today is no more than $50,000.
They seek special, general, and punitive damages for racketeering, fraud, and negligent misrepresentation, and a temporary restraining order to stop the defendants from “taking any action to sale, transfer, [or] foreclose” on their properties for non-payment.
The plaintiffs are represented by Joel Thompson.

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