Would-Be Homeowner Victimized In Rent-To-Own Racket: "If Somebody Says, 'We Finance Homes; Ugly Credit, No Credit,' Don't Buy It! Do Your Research. I Didn't, & I Got Stung!"

In Philadelphia, Pennsylvania, WPVI-TV Channel 6 reports:

• In a special consumer report, Action News helps some families who have fallen victim to a real estate scam and are now on the verge of losing their homes. Action News Consumer Reporter Nydia Han has been investigating the man they say is responsible for their troubles.
  
  It is a heartbreaking situation. They say they invested almost all of their money to own what they thought would be their dream home, but after putting in tens of thousands of dollars, they say they are at risk of losing everything.
  
  "We like it here," said one homeowner. "It's a nice little neighborhood. There are children around they can play with." The father of three, who has asked us to be identified as James, tells Action News he spent $30,000 making his house in Montgomery County a home.
  
  Deneane Grigger says she did the same thing on her home in Delaware County. "Fixing the light fixtures and all kinds of stuff with my money, my hard-earned money that I saved up," she said.
  
  Both say they responded to ads targeting people with Bad Credit, No Credit, or Ugly Credit, and then entered into Rent-to-Own agreements for their homes with Jimmy Zaspel of JimmyZHomes.
  
  "We buy and sell houses and we specialize in selling houses on rent-to-own programs and help people with less than stellar credit realize the dream of home ownership," said Jimmy Zaspel.
  
  James says he gave Jimmy Z a total of more than $50,000, first for rent and then to pay his mortgage. Deneane says she paid out $13,000. Both say their money was wasted.
  
  "I am a single mother with three kids, and I don't have money like that to be wasting," said Deneane. "I am out of everything that I had been saving, thinking that I was finally getting a house that I can fix up and call my own. I've been flim-flammed." The home Deneane lives in was foreclosed on this week.
  
  James is petrified he could lose his home, too, because he says Jimmy Z failed to pay the underlying mortgage. "We just sunk down roots and there's the very real possibility that they could move to foreclose on this property, and I don't have a say in it," said James.
  
  Deneane has filed a lawsuit accusing Jimmy Zaspel and his company, Tulip Enterprises, of negligent misrepresentation, fraud, breach of contract, and violation of the unfair trade practices and consumer protection law.
  
  "I'm just looking for my money back so I can just move on and find another house for me and my family and just be done with it," said Deneane.
  
  Deneane says her house was already in foreclosure when she entered into the Rent-to-own deal with JimmyZ. When asked about it, Zaspel said, "That's what she says. She's mistaken."
  
  Action News asked Zaspel how the home could be in foreclosure when he put it under a rent-to-own agreement? His response, "Well, that's because you're not a real estate investor, are you?"
  
  But consumer advocates say it doesn't take a real estate investor to spot this kind of trouble. Ed Magedson of RipOff Report warns that all renters and home buyers must beware. "This is a tremendous problem around the country," said Magedson. "This is going on everywhere."
  
  "If somebody says, 'We finance homes; ugly credit, no credit,' don't buy it. Do your research. I didn't, and I got stung," said James.(1)
  
  Zaspel says he stopped paying the underlying mortgage on the home James lives in only after James stopped paying him. Both Zaspel and James tell me they plan on filing lawsuits against each other.(2)

Source: Nydia Han tracks down man behind real estate scam.

(1) If the allegations made against Zaspel are true, he may make for a pretty good suspect for, at a minimum, criminal charges of theft by deception/theft by false pretenses and organized fraud, charges that could be brought by local and state law enforcement authorities. The Feds could also be interested in his antics for possible violations of federal conspiracy charges, as well as federal wire and mail fraud charges if he employed telephonic communications or mail delivery in pulling off this racket.

In a similar-sounding case, the Detroit, Michigan Feds recently criminally charged a real estate operator for allegedly using dubious 'land contract' deals to peddle illusory home ownership dreams using houses in foreclosure to unwitting, would-be homebuyers. See Detroit Feds Pinch Notorious Area R/E Operator Suspected Of Screwing Over Naive Homebuyers With Land Contracts On Homes In Some Stage Of Foreclosure. (Reportedly, the victims found the property on Craigslist ads, which in part, lead to the wire fraud charges against the real estate operator. See Real estate investor charged with wire fraud in connection to homes sold through Craig's List).

In addition, the Philadelphia, Pennsylvania Feds (prosecutors that may have jurisdiction in the case reported in the WPVI-TV Channel 6 story, above) have not been reluctant to bring prosecutions involving home ownership-related  ripoffs. See, for example:

• Philly 'Dream-Killing Slumlord' Cops Plea To Loan Fraud In Connection With Rent To Own Racket That Left Wanna-Be Homeowners Screwed Over,
• Use Of Novel Dual Criminal/Civil Prosecution Targeting Sale Leaseback-Peddling Racket Yields Guilty Pleas, Keeps Victims From Getting Boot From Homes.

(2) As a reminder to those who mistakenly believe that these apparent ripoff deals are nothing more than civil cases (as opposed to criminal matters), it is clear that all the sophisticated paperwork in the world (ie. business/purchase contracts, leases, closing statements, etc.) isn't enough to permit scammers to insulate themselves from criminal prosecution when they target their victims with legitimate-looking business propositions when screwing them over. Criminal prosecutors have the authority to "pierce through" such attempts to disguise a blatant criminal real estate ripoff as a common, legitimate business deal.

Clear precedent exists for such a "pierce through" approach to overcome any objections that will certainly arise when the scammers make the argument that the arrangement was just a civil transaction that, if challenged, should be done with a civil lawsuit, not a criminal prosecution. See, for example:

• People v. Frankfort, (1952) 114 Cal.App.2d 680, 700; 251 P.2d 401:
  
  The simple answer to this argument is that "The People prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it. They are at liberty in such a prosecution to show the true nature of the transaction." (People v. Chait, 69 Cal.App.2d 503, 519 [159 P.2d 445]; People v. McEntyre, 32 Cal.App.2d Supp. 752, 760 [84 P.2d 560]; People v. Jones, 61 Cal.App.2d 608, 620 [143 P.2d 726]; People v. Pierce, supra, p. 605.)
  a
• People v. Jones, (1943) 61 Cal.App.2d 608, 620 [143 P.2d 726]:.
  Defendant argues that the deal with each "seller" was a civil transaction; [...] Cloaked in the draperies of his corporation and pretending to act in its behalf, he boldly approached his unsuspecting victims.
  
  [***]a
  Although each deal in its incipiency bore the color and trappings of a normal, civil contract, yet when subjected to a postmortem it exhaled the stench and disclosed the carcass of a fraud. (People v. Epstein, 118 Cal.App. 7, 10 [4 P.2d 555].) There appears no sign of good faith at any turn. Each taking and appropriation was a grand theft.
  The use of the corporate name and the promises made in accomplishing his purpose were a camouflage of such common variety that no excess of genius was required to discern the fraud. Parol evidence of all that occurred was admissible to show the intention of defendant. (People v. Robinson, 107 Cal.App. 211, 221 [290 P. 470].)