Greeley brokers face sanctions

DENVER – State regulators have recommended that five Greeley real estate brokers face disciplinary action in connection with residential transactions that investigators say are tied to a widespread Front Range mortgage fraud scheme.

The transactions occurred in June 2006 when three of the brokers were working with Re/Max Optimum Group LLC and two were with Landmark Real Estate, the brokerage affiliate of Landmark Communities LLC in Greeley.

The harshest of the penalties recommended by the Colorado Real Estate Commission on Nov. 4 were license revocations and fines ranging from $15,000 to $25,000 for three of the brokers: Landmark cofounder and longtime real estate broker and developer Curtis Sears and residential real estate brokers Lani Alexander Carwin and Brook Specht Roder, both of whom are now with Re/Max Alliance Real Estate following that company’s merger with Re/Max Optimum in September.

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All three have strongly denied any wrongdoing related to the transactions in Business Report Daily interviews.

The five-member commission recommended lesser penalties — public censure and coursework — for two other brokers: Re/Max Optimum founder and managing broker Ron Kohl and former Landmark broker Jeremy Johnson. Kohl is also subject to a $3,000 fine, and Johnson faces a $500 fine.

The transactions in question were the sales of two higher-end homes — one in west Greeley, the other in Windsor — both for prices substantially above the listing prices. Buyers were referred to Alexander, who has since married, and Roder by Broker One Real Estate Professionals in Centennial.

Broker One, according to state investigators, was a “matchmaker” that linked buyers with broker representatives in communities along the Front Range from Castle Rock to Greeley. The state’s case, as outlined in a Rocky Mountain News report on Oct. 28, detailed $8 million in kickback payments to buyers and brokers in a mortgage fraud scheme that involved 105 home sales totaling $45 million.

Real estate division investigators said 98 of the homes were sold to an investor consortium called Synergy 2002 REI. In most instances substantial sums of money were transferred to third-party consultants. The Rocky report described a $1.25 million home sale in west Greeley to a Synergy investor, followed by a referral fee payment of $268,020 to Broker One owner Jerrold Minney. In other cases, investigators said substantial payments were kicked back to buyers.

Alexander Carwin said that at the time she and partner Roder were concerned about a substantial commission that Broker One said they required for one transaction.

“Broker One referred some people to us, and we were concerned about the way they wanted to structure these transactions,” she said. “They wanted this huge commission, 20 percent, paid back.”

She and Roder went to Kohl, who told them to get a legal opinion of the proposal, which they said they did prior to the sale.

“We were under the direction of a real estate attorney throughout,” Roder said. “We had a buyer who committed loan fraud. We will be cleared. We have done nothing wrong.”

Re/Max Alliance managing broker John DeWitt, also past president of the Greeley Board of Realtors, said he had been aware of the transactions and the roles of Alexander Carwin, Roder and Kohl as the Alliance and Optimum companies were negotiating their merger.

“When we purchased Re/Max Optimum, we knew what we were getting into,” DeWitt said. “We looked into it very carefully. We are confident that Brook and Lani and Ron are innocent. The bottom line is that they followed legal advice. They did exactly what they were supposed to do.”

While real estate division investigations director Marcia Waters has e-mailed the complaints against the five that commission members heard at their Nov. 4 meeting to the Business Report Daily, Alexander Carwin, Roder, Kohl and Sears said their requests for documentation of the complaints had been denied. Jeremy Johnson could not be reached prior to the deadline for this report.

Waters’ e-mail said Alexander Carwin and Roder, acting as a team, handled two transactions “where contract documents did not accurately reflect the true recipient of the seller concessions, contract documents did not accurately reflect the purchaser’s occupancy, settlement documents did not accurately reflect the verbally agreed-upon terms and the purchase prices were raised to accommodate excessive referral fees.”

The complaint also alleges “Colorado real estate broker Ronald A. Kohl failed to provide adequate supervision over Alexander and Specht Roder.”

Commission members recommended license revocations and $25,000 fines for Alexander Carwin and Roder, and public censure and coursework for Kohl.

The three told the Business Report Daily that they will enlist prominent Boulder real estate lawyer Oliver Frascona to represent them against the allegations.

Waters said an investigator told the commission Sears “acknowledged he was aware that the seller’s concessions paid to a third party were for the benefit of the purchaser, failed to ensure Settlement statements accurately reflected the terms of the transaction, failed to ensure contract documents accurately reflected the true recipient of the seller concessions and failed to maintain transaction files as required.” The commission recommended license revocation and a $15,000 fine.

Waters wrote that Johnson “failed to maintain amendments to the contract, failed to obtain authorization from the seller for the sales price, failed to ensure the transaction documents accurately reflected the terms of the transaction and failed to exercise reasonable skill and care.” The commission recommended public censure and a $500 fine.

Sears denied any wrongdoing to the Business Report Daily in a phone interview late Monday and in a written message Tuesday.

“I will fight this to my last breath,” Sears said Monday. “I have done nothing wrong, and I will prevail. There was nothing — not one thing — that I did in this instance that violated any law.”

The written statement by Sears and his Denver lawyer, Michael Plachy, detailed the course of meetings between Sears and a real estate division investigator, and outlined Sears’ participation in the transactions.

Sears said he and Johnson, as listing brokers, had few dealings with the buyers or their brokers, and that they did not profit from the transactions beyond customary commissions.

“We had no prior or subsequent dealings with the buyers, their brokers, lenders or appraisers,” Sears wrote. “We had absolutely nothing to do with any aspect of the buyers’ sides of the transactions. The offers were on commission-approved forms. Every term including every payment was reflected on the settlement statements at closing and the buyer’s lender provided letters stating that the settlement statements had been reviewed and accepted prior to closing. We received only a commission that is standard in the industry and no additional or unusual commissions or other remuneration of any kind.” Plachy is quoted in the message as saying, “The Division of Real Estate, in its zeal to make headlines, has misstated and distorted the facts. The true facts of this case couldn’t be more clear. Mr. Sears is innocent of these baseless and defamatory charges.”

Written by Tom Hacker, thacker@ncbr.com