Class-action status granted in suit against house-flipping company

A racketeering lawsuit against a company that billed itself as a one-stop shop for teaching people how to flip houses has been granted class-action status by a federal judge in Cincinnati.

Ohio-based Build Realty and other companies (including Edgar Construction, First Title, Gary Bailey and George Triantafilou) advertised through seminars, social media, websites and other media that it would teach people how to flip homes with little or no money down and no credit checks, WCPO reported.

But a lawsuit filed in federal court alleges students from Ohio and Kentucky between 2013 and 2019 were scammed by the company through deceptive practices and a large-scale racketeering enterprise through mail fraud, the outlet said.

The alleged victims believed they were buying properties that they owned when they really became beneficiaries of a trust, according to the lawsuit.

“In many, many respects, it was a scam,” attorney Bill Markovits, who represents the plaintiffs, told the outlet. “They said, ‘We buy in bulk and pass the savings onto you.’ They didn’t. They bought from the market, they marked up the property, and then you paid at a marked-up price.”

The class is composed of people who paid at least $10,000 to the company, which is between 200 and 300 people, the outlet reported. The judge also approved a separate, smaller class of plaintiffs — up to about 40 people — who lost their properties to Build Realty.

Some people allegedly lost their life savings in the scheme, with alleged damages estimated to be in the millions, according to Finney Law Firm.

Olga Feree said she lost tens of thousands of dollars she paid Build Realty to renovate a two-family home.

“They would always feed me all of this nonsense and lead me on and say, ‘Oh, it’s a great investment,’” Ferree told the outlet. “They are sneaky, they create corporation on top of corporation and there’s nothing you can do.”

While Build Realty did not respond to inquiries for comment, in court papers it defended itself by saying it’s a legitimate business. Attorneys for the company have also filed an appeal with the Sixth Circuit Court of Appeals challenging the class status ruling.

— Ted Glanzer