PHOENIX (CN) – A man claims his nephew and his nephew’s wife took his house from him, and lost it, after showing him a “Rich Dad, Poor Dad” video that informed him “the rich don’t work for money, the rich invent money.”
Joseph Zappa sued Andrew S. Louis, Elizabeth M. Louis and Del Toro Holdings, in Federal Court.
Zappa claims the Louises conspired to defraud him “out of the equity interest he held in his property” in 2005.
He claims that the couple, who own Del Toro Holdings, “put extreme and undue pressure on plaintiff to convince him to sign over the deed to his real property by promising him rates of return, on a loan, of 12 percent to 15 percent with little or no risk since the ‘debt’ to the plaintiff would be ‘collateralized’ by ‘deeds of trust assigned to’ plaintiff, ‘held in the name of’ plaintiff or ‘properties owned collectively by all parties.'”
Zappa says they couple had him watch “Rich Dad, Poor Dad,” a video which “appealed to the plaintiff as a result of his lack of financial sophistication,” “exploited the plaintiff’s lack of financial sophistication and further coerced and induced plaintiff to sign over the deed to his residence.”
He says the video informed him that “the rich don’t work for money,” “the rich invent money.”
He claims the Louises “purposely misled plaintiff by convincing him that owning a house was a ‘liability’ (and not an asset) and that ‘owning the house’ was ‘costing the plaintiff money’ as opposed to ‘generating money’ for the plaintiff.” (Parentheses in complaint.)
The couple “assured plaintiff on a number of occasions that he could ‘call this loan due’ at any time and ‘at a minimum,’ ‘reset everything’ back to the way it was ‘before the loan,'” according to the complaint.
It continues: “Defendants knew that the plaintiff was financially unsophisticated and vulnerable to misrepresentation, deception and false promises and would be an easy target for misleading him into signing over the deed of his primary residence.
“After finally convincing the plaintiff to sign over the deed to defendant Elizabeth M. Louis on or about November 28, 2005, defendant Elizabeth M. Louis then borrowed approximately $393,000 (net proceeds) against plaintiff’s equity by mortgaging the property.
“Approximately $50,000 was then used by defendants to pay off the existing mortgage of approximately $50,000 that plaintiff had on the residence, leaving the defendants with approximately $343,000 in cash as a result of the new mortgage on plaintiff’s residence. Upon information and belief, such money was then deposited into the account (or accounts) of Del Toro Holdings, LLC, after which time it disappeared.”
He claims that his nephew, “claiming to be a professional investment adviser,” and his nephew’s wife, “a soon-to-be licensed real estate professional in the State of Arizona,” did all this “without memorializing any intentions of either party in writing.”
Less than 30 days after he signed over the deed, Zappa says, he “got ‘cold feet’ and decided he wanted to ‘undo the transaction.'” They told him it was too late for that.
Zappa says the failed to make payments on the loan and his home was foreclosed on. He says his nephew told him “that all the money was gone and made no attempt to explain to plaintiff where it went.”
Zappa seeks $1.5 million in damages for breach of contract, fraud, and elder abuse. He is represented by Mark Johnson of Bloomington, Ind.