Boston "Triple Decker" Condo Converter Facing Suits Over Alleged Misrepresentations Draws FBI Attention; 50%+ Of Units Sold Wind Up In Foreclosure

In Boston, Massachusetts, The Boston Globe reports:

• When times were good, Michael David Scott did very, very well. The smooth-talking Trinidadian was a natural at selling a piece of the American dream, buying and renovating three-deckers in some of Boston’s toughest neighborhoods, then reselling them as condominiums, often to first-time home buyers eager to cash in on the city’s unstoppable housing boom.

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• From 2004 to 2008, Scott and his partners bought at least 50 buildings for a total of $26.6 million, and converted the units into 169 condominiums that sold for $49.8 million, a Globe analysis shows. Today, 101 of the units - more than half - have gone into foreclosure and are selling for a fraction of their value, according to records on file with the Suffolk County Register of Deeds.

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• More than a dozen home buyers told the Globe they were drawn in by Scott’s pitch and wound up buying properties based on promises that later proved false. Thirteen people who have done business with Scott, including buyers, a lender, a recruiter, and an appraiser, say they have been interviewed by FBI agents about their real estate dealings. The FBI would not confirm or deny an investigation.(1)

For the rest of the story, see Developer’s easy-money pitch left a trail of ruin (Of 169 condos sold, most in Dorchester, more than half are now in foreclosure).

(1) The story refers to at least two civil lawsuits, as well as bankruptcy proceedings, which Scott reportedly faces. In one suit brought by two disgruntled buyers, Scott reportedly denies committing fraud or making any misrepresentations about property sales. In another, Bank of America reportedly alleged in a lawsuit that Scott led a team that defrauded the bank of $1.5 million.