There're hustlers and then there're Hustlers. The small time dudes sometimes crack me up for their ingenuity and entrepreneurship. Of course, the small time hurt people too, but like humor that comes at the expense of someone, it's still entertaining, even funny. Sometimes.
Fresno Housing Scam Uncovered
Police Say Man Rented Homes to Victims Who Didn't Know He Was Not the Owner
by Sanford Nax, Fresno Bee
December 3rd, 2008
An elaborate scam taking advantage of the mortgage crisis unraveled, authorities say, when Kristen Ables found another family living in her Fresno house.
"It was a mixture of disbelief and anger" that she felt on learning that she had been victimized, Ables said Wednesday as Fresno police announced the arrest of Sam Haley, 66.
At first, she was angry at the occupants: "You're stealing our house," she remembered thinking.
But the renters turned out to be victims, too. Fresno police said Haley illegally got access to the house -- an investment property on Saginaw Avenue that Ables was trying to sell to avoid foreclosure -- and rented it to the family, who didn't know he was not the rightful owner.
Police allege that Haley, who they said lost his real estate license in 1979 because of fraudulent business practices, carried out the scam at least 13 times -- and was likely to keep doing it if the unexpected visit by Ables hadn't uncovered the scheme.
Fresno police detective Donnie Dinnell uncovered evidence at Haley's home and business, Capital Investments Inc., that indicated he had people lined up to rent 19 other houses, police Chief Jerry Dyer said. Dinnell also found evidence that Haley had identified up to 126 other homes that he could possibly use in the scheme, Dyer said.
Haley operated Capital Investments out of a small office on Bullard Avenue and also had a company called Premier Plus Mortgage. Police gave no further details, except to say he and perhaps a family member or two were the only employees.
The case is the first of its kind for Fresno police, but similar scams have been reported across the country as foreclosures mount in a mortgage crisis that pitched the United States into a recession.
Thousands of homeowners -- unable to make payments or unwilling to keep a house worth less than their mortgage -- have walked away from the homes or have been evicted. In October, banks repossessed 13,227 houses statewide, 329 of them in Fresno County, said Sean O'Toole of ForeclosureRadar.com, which tracks foreclosures.
"I was waiting for these kinds of stories to start appearing," O'Toole said. Similar scams appeared in the early 1990s, when home values also tumbled, he said.
Haley was placing renters in the houses after the owners moved out, police said. He accessed data from the Multiple Listing Service of the Fresno Association of Realtors with the help of an apparent accomplice to identify houses in foreclosure. Haley then obtained the key box codes and entered the houses.
He then instructed unwitting renters to change the door locks, claiming he lost the keys, Dyer said. He also told renters that by paying rent he would help fix their credit so they could buy a home of their own within two years.
He also reportedly told renters that they may have to move quickly when the house would sell, but promised to put them in another house at the same rent. He acknowledged some were in foreclosure but also claimed he owned houses that were for sale.
Dinnell said the houses Haley targeted were unoccupied for up to seven months. At least four of the 13 families had to move out when the properties sold.
Dyer said Haley collected rents averaging $700 per month, pocketing $26,000 over the seven months he ran the scam.
Haley was arrested Oct. 2 on felony theft charges, but the announcement was delayed so police could determine exactly what went on.
No one else was arrested, but Dyer said it is possible the former real estate agent had help. Haley, who has since posted bail, allegedly obtained a device to enter the Multiple Listing Service database and key box codes from another real estate agent, who was not identified.
Cathy Kinard, who rented a house on Cornelia Avenue in Fresno from Haley, said she got his name from a friend. She said he showed her a list of available properties and she selected a three-bedroom home that rented for $650 per month.
Kinard said she gave him a total of $1,450 for rent and down payment.
"He wanted cash," she said. "That should have been a red flag. I didn't know I was being scammed until a detective knocked on my door."
The bank is allowing her to live in the house temporarily while she looks for a new place. "I learned a very valuable lesson," she said.
Jeff Schrager, president of the nonprofit No Homeowner Left Behind Foundation in Fresno, which counsels people about to lose their homes, said the combination of plunging home values and desperate owners is creating a rich environment for "opportunistic scam artists."
"You don't have to be a sophisticated criminal," he said.
This isn't the first time that Haley, who Dyer described as "nothing more than a scam artist" and who listed "Ph.D." on his business card, has been in trouble. His real estate license was revoked in 1979 because, police said, he kept loan fees intended for his client. He reapplied for the license in 1998 but the state Department of Real Estate refused to reinstate it, according to records.
He also surfaced in a high-profile incident in 1994 when city officials denied his application to operate the Virginia Hotel in downtown Fresno because he had a felony conviction in 1992 for filing a false bankruptcy. Haley got tax-exempt status for a drug and alcohol rehabilitation program he planned to run from the hotel.
Haley claimed he was a retired Navy man and a recovering alcoholic.
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