Co-Owner Of Racket That Ran 'Contract For Deed' Scam Cops Guilty Pleas To Multiple Charges Of Securities Fraud, Unlawful Merchandising Practices

In Sprinfield, Missouri, the Springfield News Leader reports:

• A former part owner of Greenleaf Companies has pleaded guilty to 10 counts of securities fraud and nine counts of unlawful merchandising practices.(1) Eric Christian Gagnepain, 39, of Springfield pleaded guilty Feb. 29 in Greene County Circuit Court to the charges for his role in running the Greenleaf Companies and The Real Estate Company in Springfield, said Attorney General Chris Koster. Gagnepain was indicted in February 2011.



• Gagnepain is the second officer of the company to plead guilty. Lane Sanders, former president of Greenleaf Companies, pleaded guilty to securities fraud and unlawful merchandising fraud charges in February 2011. Sanders’ sentence is pending. Gagnepain faces between seven and 10 years in prison, Koster said. His sentencing is set for Aug. 3.(1)

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• Gagnepain solicited investors to enter into investment contracts under which investors would buy one or more new homes designated by Greenleaf, Koster said. Greenleaf Companies was responsible for the down payment, the closing costs and reselling the homes.



• Under the terms of the investment contracts, Greenleaf would pay the investor $10,000. Prosecutors say Gagnepain failed to advise investors of Greenleaf’s weak financial condition and failed to advise them that financial institutions were being misled about the true source of down payments.



• When Greenleaf and The Real Estate Company resold the homes, Gagnepain failed to advise the purchasers that the title to the homes were held by the investors and failed to advise the consumers when the homes were in danger of foreclosure, according to Koster

For more, see Greenleaf investigation leads to a second guilty plea (Eric Gagnepain is the second officer of real estate company to admit role in securities fraud, unlawful merchandising).

(1) For earlier posts on this contract for deed, home-flipping racket which describe the nature of the scam, see:

• Missouri AG Obtains $338K+ Judgment In Suit Against Alleged Contract For Deed, Payment Skimming Racket That Left Would-Be Homebuyers In Foreclosure,
• Straw Buyer Scheme Coupled With Subsequent Sale Using Contract For Deed Constitutes Sale Of Unregistered Security, Says Arkansas Securities Regulator,
• 21 Missouri Homebuyers File Suit Against Springfield Firm In Failed Contract For Deed Home-Buying Program,
• Missouri "Contract For Deed" Operator Hit With C&D Order By Securities Regulator, Preliminary Injunction By State AG,
• Missouri Feds, State AG, Local Cops Raid "Contract For Deed" Operator; Firm Subject To Numerous Complaints; Company Issues Public Statement,
• More Trouble For Missouri "Contract For Deed" Operator As Homeowners File Federal Suit Seeking $60M In Damages,
• Missouri Couple Sues "Contract For Deed" Operator For Allowing Home To Fall Into Foreclosure.

(2) According to the story, the cases for four other individuals indicted along with Gagnepain last February are pending. Those individuals are:

• Scott Allen Dasal, former president of The Real Estate Company;
• Misty May Perkins, former director of investor relations for Greenleaf;
• William David Strong, former director of finance for Greenleaf; and
• Robert Lee Batchman, former real estate broker for The Real Estate Company.