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Sunday, June 23, 2024 | Back issues
Courthouse News Service Courthouse News Service

Indiana Seeks Three in Giant Tax Scheme

INDIANAPOLIS (CN) - Indian's attorney general claims three people and their three companies defrauded troubled homeowners of millions of dollars after their homes were auctioned off at tax sales: in one case paying $450 for a tax surplus of nearly $1 million.

The main defendants are FLRC, a Florida LLC; Coastal Title Inc., apparently of Florida; Oak Tree Title, an Oklahoma LLC; and three people run and manage them.

Homeowners who fall behind on property taxes may lose their homes via tax sale. During a tax sale, bids are placed on the property, the minimum bid being equal to the owed taxes, and the highest bid wins.

After the bidding process, the homeowner has a one-year redemption period to pay the taxes owed, and keep the property. If the time expires, the highest bidder is awarded the property.

Tax sales can create a surplus if bids are high enough, because counties take only what is owed in taxes, and after any outstanding mortgage is paid, the remaining money or "tax surplus," belongs to the original property owner.

The attorney general claims in his Feb. 1 lawsuit in Marion County Court that the defendants deceived and abused the homeowners during the one-year redemption period. They did so by persuading the homeowners to sign fraudulent documents selling over their legal interest in the property to the defendants, Attorney General Gregory Zoeller says.

The deceptive acts included giving homeowners pre-filled-out forms riddled with inaccuracies that concealed important information, the state says.

After acquiring rights to the property, the defendants submitted legal claims for the tax surpluses, which came to as much as $900,000 apiece.

The complaint lists 48 specific transactions, which include a "sale price" of $300 for a tax surplus of $74,653; six purchases of $10 apiece for tax surpluses of $245,016; and - the big bajour - $450 for a tax surplus of $946,989.

The state seeks more than $9 million in restitution and civil penalties and an injunction to keep the defendants from doing business in Indiana.

The attorney general says the defendants picked homeowners they believed to have little understanding of the tax sale process.

"Rarely have we seen a scam that so brazenly exploited desperate property owners and took advantage of their lack of understanding of a complicated legal process. Victims not only lost their property but money that was rightfully owed to them," Zoeller said in a statement.

Zoeller said auditors offices were able to stop some of the unfair claims, and that he expects there are many more victims, including in Alabama, Florida, Georgia, Oklahoma and Tennessee.

The 25-count lawsuit accuses the defendant violating a raft of laws, including the Home Loan Practices Act, Deceptive Consumer Sales Act, and of unconscionable act, unfair and abusive acts and omissions, transacting business without a license, misrepresentation and concealment.

The defendants include affiliates of the three main businesses, usually using similar names, and three people. They are"

Diana Milena Castro Tobon aka Diana Milena Talkington aka Diana M. Castro, individually and as member/manager of FRLC. She is a Colombian citizen whose last known address was in Jupiter, Fla.

Craig Lynn Talkington, individually and as member/manager of FRLC, whose last known address also is in Jupiter.

And David Mark Fuqua, individually and as member/manager of FRLC, and the Oak Tree and Coastal Title companies. His last known addresses were in Valdosta, Ga., and Stillwater, Okla.

"We suspect others were victimized, and my office will use every legal tool available to halt this fraud, hold the defendants accountable and assist the victims," Zoeller said.

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