
Pennsylvania Attorney General Tom Corbett yesterday said he would ask federal prosecutors to open an investigation into a North Hills real estate broker and his associates, saying James C. Platts and his company, Easy Realty Solutions, flagrantly violated state and federal laws.
"This guy's a con artist. He just keeps shifting schemes," said Mr. Corbett, whose office had previously won fines against a Platts-operated rent-to-own scam.
This time, investigators say he moved on to a wide-ranging home sales operation that falsified incomes to enable unqualified buyers to obtain mortgages, filed fraudulent liens against homes he was selling to extract money from the sellers, created fraudulent second mortgages and practiced law without a license.
The liens, known as "lis pendens," were used to guarantee Mr. Platts a profit on sales because his real estate license had been revoked several years ago and he would not have been permitted to collect a sales commission.
Amy L. Schulman, a deputy attorney general in the Bureau of Consumer Protection, filed a 54-page, 13-count complaint against Mr. Platts in Allegheny County Common Pleas Court. The complaint noted that his deals frequently included duplicate and conflicting settlement papers, called HUD-1s. The complaint does not say Mr. Platts prepared those documents and Mr. Corbett's office indicated that the preparation and transmission of those papers could be the focus of a separate criminal probe.
"This investigation is ongoing," Mr. Corbett said.
The suit asks the court to declare more than $1.2 million in second mortgages void; erase an estimated 159 liens Mr. Platts lodged against various properties; and force Mr. Platts to refund defrauded parties in an estimated 115 home sale deals since 2004. The bureau also will seek to have the corporate charter for Easy Realty, as well as two of its subsidiaries, revoked by the Pennsylvania Department of State.
Brad Dornish, attorney for Mr. Platts, said yesterday that the real estate deals were purchases and resales of the homes by Easy Realty and that the second mortgages also were proper.
"We do not believe that the purchase and resale of properties or the assignment of agreements of sale violates the real estate brokerage law, and we do not believe that the acceptance of an assignment of a seller second mortgage in lieu of other legitimate payments constitutes a violation of the mortgage brokerage law," Mr. Dornish said.
He had no comment on Mr. Corbett's criminal referral to the U.S. attorney.
Mr. Corbett said he wants federal prosecutors to step in because of apparent cases of mail and wire fraud in the handling of many home loans. The state Bureau of Consumer Protection has no criminal prosecution powers.
"There's a criminal side to this, also. This person, in my opinion, was doing nothing but stealing money from the general public," Mr. Corbett said. "This is an ongoing investigation. I will be having conversations with the assistant U.S. attorney suggesting how I think the federal government can become involved in this with their resources, particularly as to those people who assisted" in the scheme.
"If I were down there," said Mr. Corbett, a former U.S. attorney, "I would begin the investigation right away."
Easy Realty and Mr. Platts were the subjects of a series of articles last summer in which the Pittsburgh Post-Gazette detailed his use of liens and apparently illegal second mortgages as well as duplicate settlement statements. The paper also discovered that Mr. Platts, using a North Hills mortgage brokerage, arranged sub-prime home mortgage applications that sometimes wildly inflated buyers' incomes.
At the time he was working the Easy Realty deals, Mr. Platts was on probation from a theft conviction in Allegheny County, and facing criminal indictment for tax evasion. He faces trial in the IRS case next month.
He has since expanded his business into Florida.
Mr. Platts did not respond yesterday to messages left at any of his offices.
In at least one instance, one of the Platts liens, which remained on the books until September of this year after a home deal fell through, prevented a couple from selling a home.
Brenda Matthews, who entered a sales contract with Mr. Platts when she and her husband relocated to Colorado, refused to sign two conflicting HUD-1 statements that would have shown her selling the same house, simultaneously, to Easy Realty and to another couple, at differing prices.
She refused to sign those documents when her attorney warned her against it, saying it appeared to be improper.
A Platts lien remained on the house, making it hard to sell, until Ms. Schulman stepped in over the summer.
"I'm in foreclosure. I'm going to lose that house," Mrs. Matthews said.
