A real estate program that promised to restore distressed inner-city homes for low-income buyers ended up deceiving and victimizing those it had sought to help, according to the Missouri attorney general’s office.
A lawsuit filed in Jackson County Circuit Court alleges that Tri-State Holdings-32 LLC, principal owner Brandon Miller and the Rev. Tony Caldwell duped buyers into believing they would own a home after making a down payment and monthly payments. The company promised buyers they would receive an ownership deed shortly after signing a contract.
The company also said they would make major repairs on the homes. In exchange, the buyers would make minor improvements such as installing carpet, painting and performing other cosmetic work.
But Tri-State repeatedly failed to make good on those promises, leaving most of the homes in disrepair and some cases uninhabitable, an assistant attorney general said in opening arguments Wednesday in a civil trial over the lawsuit.
The state is seeking restitution for the victims as well as a permanent injunction against Miller and Caldwell from selling properties. Miller and Caldwell have denied wrongdoing.
“For many the American dream turned into a nightmare,” assistant attorney general Lynn Stoppy told jurors.
Stoppy said Tri-State bought 54 homes at delinquent tax auctions. The homes were sold in the $30,000 to $40,000 price range. Tri-State sold the properties to new owners for an upfront payment of $500 plus additional monthly payments of $399.
The program targeted potential buyers who had poor credit histories, had little upfront cash and often were near being homeless.
Potential buyers did not have to go through the traditional homebuying process. No credit checks were required, and in many cases the buyers could move into their new properties almost immediately.
However, the homes had significant interior and structural problems. Many had major electrical problems and were without furnaces or water heaters.
Most of the buyers spent their own money to make the repairs that Miller and Caldwell had promised they would complete. The homeowners also did not receive the property deeds that would allow them to purchase the required property insurance.
Several of the buyers were single mothers, disabled veterans and others.
Caldwell, a community activist and coordinator of the Eternal Life Church &Family Living Center, served as the marketing coordinator for the program and recruited members of his church and others to purchase the homes.
Stoppy said Caldwell often wore a clerical collar when he spoke to potential buyers and took them on tours of the properties. He received the $500 from each cash deposit and 10 percent of each monthly payment. Caldwell allegedly also once sold the same home to two different women.
Caldwell and Miller eventually parted ways, but they continued to operate separate homebuying programs.
Miller’s attorney, Robert Bjerg, said Miller spent his college savings and borrowed money from relatives to purchase the delinquent properties. Miller never refused to make the repairs but was hampered by an enormous backlog of repair work, Bjerg said.
A number of the complaints were lodged after Miller terminated Caldwell for stealing $7,000, Bjerg said.
The trial is expected to last just over a week.