Ponzi Home Scam Alleged in Peculiar, Mo.

SPRINGFIELD, Mo. (CN) - Greenleaf Companies and its wholly owned brokerage, The Real Estate Company, cheated homebuyers in a real estate Ponzi scheme, 21 plaintiffs say in a federal RICO claim. They say Greenleaf promised $10,000 kickbacks for each home they bought at elevated prices, plus weekly cash payments, but failed to pay off the mortgages from a money pool allegedly created for this, costing investors their down payments and losing the homes to foreclosure, The homes were to be built in Peculiar, Mo.

The plaintiffs also say the defendants sold them the houses "at elevated prices pursuant to elevated appraisals conducted by appraisers who were affiliated with the Greenleaf Enterprise." They claim Greenleaf lied about their financial condition to get the mortgage loans.

They claim "The defendant Lenders originating the mortgage loans to investors were or had cause and the opportunity to be aware of the $10,000 rebate/kickback and other sums to be paid to each Owner-Investor but did not adjust the underwriting of the loans to the affect that, in many instances, such mortgage loans originated on the property equaled in excess of 100% of the purchase price paid by the Owner-Investors given the net effect of the rebate/kickback of $10,000 on each property acquisition and other sums to be received by the Owner-Investors.

"The payment of the $10,000 to each Owner-Investor and other sums for each property acquired as well as incorrect appraisals, incorrect loan application documents, were to be part of an overall scheme and enterprise of all of the Owner-Investor(s) along with all of the other Defendants (other than the Trustees) to create an elevated value and price of properties which would then be available for leasing or sales to contract for deed buyers as well as tenants, such as, but not limited to the Plaintiffs.

"Greenleaf, the participants in the Greenleaf Enterprise, including the Owner-Investors agreed upon a pool of funds which would be funded through lease, rent and contract for deed payments from contract for deed buyers as well as tenants, such as, but not limited to the Plaintiffs. This pool, referred to as 'West Star' or 'Peer to Peer' was established or retained so as to receive lease tenants from tenants such as Plaintiff-Tenants and contract for deed payments from buyers such as Plaintiff-Purchasers upon the properties owned by Owner-Investors and also to collect payments from contact for deed buyers, such as Plaintiffs-Purchasers for real estate taxes, property insurance and homes association dues, if any.

"The contract for deed payments and lease payments charged by the participants of the Greenleaf Enterprise against the Plaintiffs were insufficient to pay all sums due and owing on the properties as and for mortgage payments, real estate tax payments, insurance payments, homes association payments and sums of monies withdrawn or to be withdrawn by [defendants] M. Allen Bird, Scott A. Dasal, Eric C. Gagnepain, the Owner-Investors and others from the pool of money and other monies originated from property sales, rents and contract for deed payments.

"Given the insufficient sums necessary for the payments of mortgage payments, real estate tax payments, insurance payments, homes association payments and sums of monies withdrawn or to be withdrawn by M. Allen Bird, Scott A. Dasal, Eric C. Gagnepain, the Owner-Investors and others as described in the immediately proceeding paragraph, the ability of the Greenleaf Enterprise to continue without resulting default on mortgages and foreclosure of properties and displacement of Plaintiffs was possible only by the pyramiding of property acquisitions unrelated to the business of renting and selling property to Plaintiffs and those similarly situated. Accordingly, the Greenleaf Enterprise constitutes a 'Pyramid' or 'Ponsey' [sic] scheme."

Plaintiffs are represented by Douglas Patterson of Leawood, Kan.

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