Federal and state officials are now probing a Colorado real estate investment company owner who is already being sued by a series of investors.
Darin V. DeVoe’s Colorado companies, including Home Owner’s Solutions, Home Owner’s Trust and The DeVoe Group, have been named in a number of lawsuits alleging fraud. Now, agencies including the state’s Attorney General and the Division of Securities are probing DeVoe.
Residential real estate loan fraud is a national epidemic, costing communities nationwide an estimated $1 billion in 2005, compared with $429 million in 2004, according to the Federal Bureau of Investigation. In 2005, the FBI identified Colorado as one of the top 10 mortgage fraud “hot spots'” in the country, and fraud-fighting legislation is currently underway in the state.
“We have received complaints about this individual and his companies and we’re taking a look at it,” said Kristen Hubbell, spokeswoman for the Office of the Attorney General in Denver. “It’s on our radar screen, and different agencies are looking at it as well.” Hubbell confirmed that the Division of Securities has also received complaints.
“We have assisted the Office of the Attorney General with its probe into the matter,” Lance Clem, spokesman for the Colorado Bureau of Investigation, confirmed.
Attempts to reach DeVoe today were unsuccessful.
Dozens of investors have filed lawsuits against DeVoe and his companies hoping to recoup millions of dollars in losses as a result of real estate deals gone sour, media reports say. An example of one such lawsuit is that filed in Denver County District Court in Colorado in September 2005 by Danny Baca and Kay Baca of La Salle, Colo.
DeVoe “has been sued several times,” said Scott Watson, of Denver-based Bendelow Law Firm. Watson is representing Danny and Kay Baca who are suing DeVoe, Home Owners Solutions, Home Owners Mortgage, The DeVoe Group and Virginia L. Brinkman.
In their complaint, the Bacas allege that Home Owners Solutions didn’t live up to the conditions of a number of installment land contracts between the three of them.
In 2003, Home Owners allegedly agreed to purchase a condominium in Denver for $379,900, rent the condo out and use the rent to make monthly payments on the condo, plus send some money to the Bacas, the complaint says.
However, according to the complaint, though the company continued to collect the rents, Home Owners didn’t make the payments to the Bacas and also missed paying dues to the homeowners’ association. Because of this, the Bacas allege, the homeowners’ association dunned them, the landowners, for the dues.
Because Home Owners allegedly didn’t make the promised payments, the Bacas are suing for breach of contract, the complaint says.
In 2001, the Bacas and Home Owners entered into an Installment Land Contract in which Home Owners agreed to buy a Ft. Collins, Colo., property for $164,000, the complaint alleges. Home Owners didn’t make the payments on this purchase, either, according to the complaint.
Similar alleged breaches occurred with a Wellington, Colo., property and another Ft. Collins property, the complaint alleges.
Overall, the legal papers accuse DeVoe of unjust enrichment, breach of contract, deceptive trade practices, deceit based on fraud and other misdoings connected with eight properties.
The Bacas are seeking a jury trial and asking for damages to be determined at trial.