Florida AG files suit against land trusts, calling business unfair and deceptive

Kimberly Miller, Palm Beach Post

The assets and operations of several South Florida land trust companies, related firms and their owners were frozen by the state attorney general’s office Tuesday in a complaint claiming they made promises to struggling homeowners they can’t fulfill.

The companies have sold hundreds of homeowners statewide on a complicated legal “scheme” that pledges to make their underwater mortgages disappear.

About 90 Palm Beach County homeowners have signed their deeds over to one of the land trusts as part of the plan. The homes range from million-dollar waterfront mansions in Boca Raton to $60,000 condominiums west of Florida’s Turnpike.

A so-called “quiet title” lawsuit is then filed by the trust against the homeowner’s lender to try and cancel the mortgage while also setting the homeowner up with a new lower mortgage or other payment plan to the trust, the complaint says.

“This mortgage relief scam targeted hundreds of distressed homeowners who were already facing financial hardship,” said Attorney General Pam Bondi. “By obtaining a temporary injunction and asset freeze, we have stopped this company from preying on even more of Florida’s homeowners.”

Named in the 45-page complaint are Parkland residents Edward Cherry and Paul Gellenbeck, Lawrence Diodato of Lake Worth, Anthony Pintsopoulos of Lauderdale by the Sea, and Shane Frankovic.

The companies are Fidelity Land Trust Co., which has a Boca Raton address in state records, Sunshine State Land Trust, August Belmont & Co., Zion Partners Irrevocable Trust, Florida Land Trust Services, Growth Capital Funding, Esquire Litigation Support, Click Media Consulting, Florida Home Rescue Mission and American Federal Trust.

Multiple firms were used to “mask the organizational structure of the scheme and commit fraud,” Tuesday’s court filings say.

Fidelity managers deny the state’s claims.

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