County Land Banks across the country are HOT news in the media.
An FBI Raid at Indy County Land Bank with allegations that officials were warned of serious concerns within the county land bank:
" It also shows city leaders were warned of serious concerns about the opportunity for fraud within the land bank program months before two city employees were indicted on federal wire fraud charges."
Sounds familiar:
April 23, 2013
Dear Ms. Miller:
Thank you for writing to President Obama. The President appreciates your taking the time to share your views and concerns. We received your correspondence and forwarded your information to the appropriate agency for further review.
You may also find assistance by visiting www.USA.gov or calling 1-800-FED-INFO.
Sincerely,
The Office of Presidential Correspondence
http://realneo.us/content/demand-removal-gus-frangos-president-cuyahoga-county-land-bank [3]
FBI searches City-County Building, makes multiple arrests in Land Bank probe
May 21, 2013
FBI agents on Tuesday morning conducted a warrant search [4] at the Department of Metropolitan Development in the City-County Building, shortly after agents arrested multiple people, including city employees at their homes.
The moves are the culmination of a months-long federal investigation into alleged corrupt practices at the Indy Land Bank, a municipal agency that handles the disposition of vacant and tax-delinquent homes that fall into city hands, sources told IBJ.
A grand jury indictment is expected to describe evidence of secret kickbacks to city officials who orchestrated the sale of city-owned properties to at least one not-for-profit organization. Those arrested were scheduled to make initial appearances in federal court Tuesday afternoon. U.S. Attorney Joe Hogsett is expected to announce the charges at a press conference at 1:30 p.m.
An FBI tactical vehicle was parked outside the north entrance to the City-County Building as of 9 a.m.
One of those arrested Tuesday was Reggie Walton, the Land Bank director. It was not yet clear what charges Walton is facing. The identity of the other suspects also was unclear. The FBI search warrant centered on Walton's office on the 20th floor of the City-County Building.
Walton was prominently featured in an IBJ investigative story in November 2012 that raised questions about the city's sale of taxpayer-owned properties to not-for-profit groups eager to exploit a loophole allowing low-priced sales without public bids.
The IBJ story [5] focused on the sale of 154 vacant homes and apartment buildings for a total of just $154,000—a fraction of their estimated $2 million value at auction—to a group called Homeless & ReEntry Helpers Inc. The not-for-profit acted as a straw buyer for local investors who cherry-picked the properties from more than 6,000 tax-delinquent Marion County parcels.
The Homeless & ReEntry Helpers group and its executive director, Don E. Hawkins, are not targets of the investigation, the sources said. Neither are the group's private investor partners.
The November story led with a reference to Walton, who said he realized he had just "made someone a millionaire" after signing off on the deal in late 2011.
Walton seemed to acknowledge the deal was bad for taxpayers, but he placed the blame on the shoulders of his bosses, including former Department of Metropolitan Development Director Maury Plambeck.
“I wasn’t a fan of the whole transaction, but I wasn’t the signature on how it happened,” Walton said at the time. “I can guarantee you won’t see a distribution of property on that scale in this city again.”
Usually, for-profit investors interested in a county-owned house must ask the county treasurer [4] to include it in an upcoming auction, where they run the risk of losing out to a higher bid. Investors who want a property from the city’s land bank must compete in a sealed-bid auction and meet a minimum bid set by an appraisal.
But state law allows not-for-profits to purchase county-owned properties without an auction. The law was designed for community development corporations, though other tax-exempt groups including churches also have bought properties.
Numerous complaints regarding land banks engaging in fraud, scams and a major waste of money are widely reported:
Kent County Taxpayers Alliance
Despite their good intentions, land banks throughout the country have a long history of cronyism, scandal, and abuse.
The Kent County Land Bank Authority already has policies in place that favor certain entities and individuals over others (i.e. cronyism). We agree with this piece by Audrey Spaulding of the Mackinac Center, "...it would be best to eliminate or reform them (land banks) now, instead of waiting for a scandal to occur."
Despite their good intentions, land banks throughout the country have a long history of cronyism, scandal, and abuse.
The Kent County Land Bank Authority already has policies in place that favor certain entities and individuals over others (i.e. cronyism). We agree with this piece by Audrey Spaulding of the Mackinac Center, "...it would be best to eliminate or reform them (land banks) now, instead of waiting for a scandal to occur."
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The corruption of the Indianapolis Land Bank is not surprising to anyone who has tracked these government entities. The country's oldest land bank, in St. Louis, has a similar history of corruption and favoritism.
Granting government officials the power to choose [7] who can purchase property and for how much, along with the ability to funnel subsidies to certain developers, is a recipe for corruption. And yet, that is what Michigan's land bank law allows.
The Kent County Land Bank created controversy when it blocked properties from going toauction — where they would have been bid on in a transparent process — in order to be able to pick and choose who could purchase property.
Indianapolis officials’ misdeeds should cause legislators here to revisit the wisdom of allowing such entities to exist in Michigan. While there is no evidence of bribery, land bank officials around this state have already put in place policies that favor nonprofits and government employees.
At the very least no land bank should be allowed to block property from being sold at taxauction. Moreover, these government agencies should adopt uniform pricing policies, instead of extending preferred treatment to some.
Michigan has 40 or so land banks, and they operate without much independent oversight. It would be best to eliminate or reform them now, instead of waiting for a scandal to occur.
Granting government officials the power to choose [7] who can purchase property and for how much, along with the ability to funnel subsidies to certain developers, is a recipe for corruption. And yet, that is what Michigan's land bank law allows.
The Kent County Land Bank created controversy when it blocked properties from going toauction — where they would have been bid on in a transparent process — in order to be able to pick and choose who could purchase property.
Indianapolis officials’ misdeeds should cause legislators here to revisit the wisdom of allowing such entities to exist in Michigan. While there is no evidence of bribery, land bank officials around this state have already put in place policies that favor nonprofits and government employees.
At the very least no land bank should be allowed to block property from being sold at taxauction. Moreover, these government agencies should adopt uniform pricing policies, instead of extending preferred treatment to some.
Michigan has 40 or so land banks, and they operate without much independent oversight. It would be best to eliminate or reform them now, instead of waiting for a scandal to occur.
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Kent County Considers Land Bank Changes
Posted by Audrey Spalding on March 25, 2013 at 10:25am
A Kent County Board of Commissioners subcommittee is recommending that the Kent County Land Bank be prohibited from purchasing tax-foreclosed property prior to tax auction.
If Kent County commissioners approve this recommendation, they will be taking a step toward both encouraging private-sector development and saving taxpayers money.
Last summer, the Kent County Land Bank caused a stir when it snapped up more than 40 vacant, tax-foreclosed properties before tax auction. By doing so, the land bank blocked redevelopment from occurring in the private market.
Posted by Audrey Spalding on March 25, 2013 at 10:25am
A Kent County Board of Commissioners subcommittee is recommending that the Kent County Land Bank be prohibited from purchasing tax-foreclosed property prior to tax auction.
If Kent County commissioners approve this recommendation, they will be taking a step toward both encouraging private-sector development and saving taxpayers money.
Last summer, the Kent County Land Bank caused a stir when it snapped up more than 40 vacant, tax-foreclosed properties before tax auction. By doing so, the land bank blocked redevelopment from occurring in the private market.
Moreover, the land bank spent more than $400,000 to buy those properties. The Kent County Taxpayers Alliance estimated that if private buyers had been allowed to bid, the county could have received up to $1 million in additional sales revenue. Instead of taking in money that could have been used to fund county operations, officials chose to spend.
State law prohibits land banks from acquiring property before tax auction, but the Kent County Land Bank worked around that by coordinating with county officials so that property was transferred first to the county and then to the land bank.
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The Genesee County land bank now calls itself a "developer". Representatives of the land bank, like Raynetta Speed openly admit they keep land and homes out of the hands of private developers and establish "future development" areas.
Is this in the best interests of the residents? Blighted land held by the land bank contributes to the decay of neighborhoods when the land bank neither develops or maintains these properties. Thus the Land bank is nothing but one of the slum landlords it pretends to protect us from.
Is this in the best interests of the residents? Blighted land held by the land bank contributes to the decay of neighborhoods when the land bank neither develops or maintains these properties. Thus the Land bank is nothing but one of the slum landlords it pretends to protect us from.
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But instead, this property, which could be back onto the tax rolls helping the City and its residents, is still in the Land Bank's possession bringing in $1 a year to the Land Bank. The couple was told they could not buy the property because it was being held for Salem Housing to develop.
No Cronyism here at all. Salem Housing's record for this type of work is dubious at best.
No Cronyism here at all. Salem Housing's record for this type of work is dubious at best.
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I suppose that is why some communities are eliminating their land banks and kent County is suing theirs.
Cuyahoga County Land Bank has engaged in highly suspicious activity REPEATEDLY. http://realneo.us/content/cuyahoga-county-land-bank-creators-dabble-ten-million-dollar-property-jim-rokakis-gus-frango [9]
The Cuyahoga County Land Bank's president - GUS FRANGOS - is a Con Artist http://realneo.us/content/cuyahoga-county-land-bank-creators-dabble-ten-million-dollar-property-jim-rokakis-gus-frango [9]
Gus Frangos has committed MORTGAGE FRAUD. http://realneo.us/content/cuyahoga-county-land-bank-president-gus-frangos-con-artist-forges-documents-obtain-2nd-mortg [10]
Gus Frangos is also a liar http://realneo.us/content/cuyahoga-county-land-bank-president-gus-frangos-liar-liar-panties-fire-attempted-cover-progr [11]
The Cuyahoga County Land Bank has selectively given numerous taxpayer properties to several out-of-state flipper LLCs. http://realneo.us/content/cuyahoga-county-land-bank-continues-give-county-taxpayer-property-flippers [12]
All of the LLC flippers use JASON BROOKS as their agent. http://realneo.us/content/cuyahoga-county-land-bank-cleveland-community-development-gifts-jason-brooks-connection-city [13]
NONE of the properties are via a sealed-bid auction and often transfer first through a community development organization to meet the qualification of not-for-profits receiving the property without an auction, and the community development organization then gives the property to one of Jason Brooks LLCs.
The Cuyahoga County Land Bank better reconsider their scam of giving Safeguard Properties & Forest City aka Slavic Village Recovery LLC hundreds if not 1000's of taxpayer's property with no bid process by first transferring the property to not-for-profit Slavic Village Development. http://realneo.us/content/safeguard-properties-forest-city-slavic-village-recovery-llc-first-house-donated-county-land [14]
Slavic Village Development is incompetent http://realneo.us/content/slavic-village-community-development-selling-property-those-owe-delinquent-property-taxes-cu [15]
The Cuyahoga County Land Bank is a scam http://realneo.us/content/gus-frangos-president-cuyahoga-county-land-bank-and-his-shell-llc-properties-new-photos [16]
Lots more details on numerous issues with the Cuyahoga County Land Bank here http://realneo.us/blogs/lmiller [17]
See full report on Indiana Land Bank Internal Investigation here http://www.indy.gov/eGov/Mayor/Documents/2013/Land%20Bank%20Investigation.pdf?utm_source=delivra&utm_medium=email&utm_campaign=6.14.13.Land+Bank+Investigation [18]
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