How to Get Out of Debt With the Get Out of Debt Guy » real estate developer

Savannah Man Faces A Potential 750 Years In Prison For Bank Fraud

Amanda Miller — Mon, 03 Oct 2011 04:00:13 +0000

Savannah, Georgia resident Richard Guerard was indicted by a federal jury on charged that he defrauded over $1 million from First National Bank and other banks between 2007 and 2009.

Allegedly, in 2007 Guerard worked as a real estate developer acting on behalf of two businesses and entered into loan agreements with First National Bank among others for the purchase of development areas in downtown Savannah. The following two years consisted of Guerard submitting dozens of fraudulent subcontractor invoices to to First National Bank for work that hadn’t been performed. Guerard then received over $1 million in loan funds that he was not entitled to.

United States Attorney Edward J. Tarver said, “We will continue our efforts to expose the shameless schemes that strip Americans of their financial security and erode their confidence in our nation’s financial networks. The U.S. Attorney’s Office will direct available resources to respond to the surge in financial fraud to ensure that those who have committed white-collar crimes are prosecuted and face long periods of incarceration; that victims of such crimes recover what they have lost; and that the American people regain trust and confidence in their country’s financial institutions.”

Guerard is now facing an impending trial and 25 counts of bank fraud which carry a maximum 30 year prison sentence and $1 million on each count which means Guerard could be facing a 750 year prison sentence and $25 million fine. Can you imagine 750 years in prison?

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Should I Get a Forensic Audit? The Owner Shot His Wife In The Head. – Brenda

Steve Rhode — Mon, 01 Nov 2010 18:35:17 +0000

From How to Get Out of Debt

“Dear Steve,

Purchased a lot in Waverly Georgia called Bridge Pointe at Jekyll Island on 12/2007 from Land Resources for $509,000. Loan for $446,000. Interest only payment $2,600 mth. Current property value less than 40,000.

Property never appraised at $509,000 but Bank of America wrote a justification for loan based on future amenities and infrastructure promised by Land Resources. I made multiple requests for copy of appraisal and never received it. B of A had fudiciary responsibility to check out bonding for infrastructure. Land Resources filed bankruptcy.

Owner shot wife in head and currently in jail. Bonding was fraudulent and owners currently in jail. I paid $3,600 a month for 2 years ($1k mth over interest only payment) trying to pay off loan. I lost job and am now employed at 1/3rd less than previously making. I stopped making payments 4 months ago.

Bank turned loan processing over to GreenTree and no one is calling me. I think they are going to try to quietly foreclose because I believe I probably have legal recourse but attorneys want money and I don’t have any.

Should I get a forensic audit? An Attorney? Just foreclose? Please help soon as I am VERY suspicious that no-one is contacting me for being 4 months late, and fear that getting out of this will be a questionably legal as getting into it was.

Brenda”

The Answer:

Dear Brenda,

Wow, what a mess.

Okay, let me preface my opinion with the fact there is never a harm in meeting with an attorney licensed in your state for a legal opinion. That’s something I can’t give you.

But from a life experience and reality point of view you’d probably need cash to pay for the lawyer. It is probably unlikely you’d recover your losses from the developer or owner given that his financial status is probably a worse disaster.

If you got an attorney to roll back the transaction that doesn’t address the problem with Bank of America. You’d have to go after Bank of America separately and that could get expensive.

I would suggest that you meet with a licensed real estate attorney in your state and discuss the matter. See what terms they may be willing to undertake pursuing this case. They might feel they could get attorney fees from Bank of America and then might take it on a contingency.

If that doesn’t pan out then you might want to hand it back to the bank, let them foreclose and follow that up with a bankruptcy to terminate your resulting liability.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Josy Writes “My Real Estate Business Is Going Down The Drain”

Steve Rhode — Sat, 12 Dec 2009 00:58:18 +0000

From How to Get Out of Debt

Josy

“Dear Steve,

I am in the Real Estate Business. We are also a General Contractor. We currently have close to 4 million dollars in property, but have 1 million dollars in debt. But with the curent economy situation, we have found ourselves in a rut. With little money to build and lots of property we know that if we find the right solution, we can take care of our situation.

Our credit has gone down the drain and we are now on the verge of losing a lot of the properties we own. There’s only two of us, and we’re running short of ideas. Sometimes we just want to throw in the towel. But we’ve come too far to throw it all away. We are constantly being hounded by debt collectors and are behind on car payment as well as mortgage payments. The banks don’t seem to care about the 4 million dollars in assets.

Any ideas?

Josy”

The Answer:

Dear Josy,

I’m not sure if I’m the right guy to ask. I went bankrupt from my real estate development business. Ironically, I learned more from my bankruptcy than I ever did in all my years in college.

If we separate out the emotional component and look at your situation purely from a business point of view I think there are several critical areas to look at before you can decide what path is right for you.

What concerns me the most from your story is that in your desire to save the business you have allowed car payments and mortgage payments to be missed. Those payments must be brought current and kept current. You need to keep a roof over your head and a car for transportation. If the business can’t survive if you make those car and mortgage payments I think you got your answer that the business must go.

The banks don’t give a damn about how great of a job you have done they want to see a reasonable plan on how you are going to return their money to them. Your best course of action is to put together a written business plan on what needs to happen to save the business and see if you can negotiate a solution with the bank from that as a starting point.

The bank can modify your loans and may if they see a logical and reasonable plan where they can recover their money if they give you some slack. If you can’t present a logical solution then they may not give you any breathing room or more time because why prolong the inevitable. If that’s the case, it is better to know that now than to drag yourself further down a black hole.

I’m not sure I care about the fact that you value your assets at $4 million because assets do not have value based on what you paid for it or what it might have been worth. Value comes from that amount that the buyer and seller agree on at the time of sale and I’m not sure what the written down value of your properties would be if you could find a buyer today. Probably not the full $4 million dollars. Not in this down real estate market.

It’s not too late to reinvent yourself and consider contractor work that you may not have done before. For example, small builders are not busy right now and a number of them have switched their focus to home remodeling rather than building. What they are finding is that people are more interested in fixing up their current properties than buying land and building from scratch.

It might just be that there is no reasonable expectation that you will be able to hold on to the properties in these lean times. If you had loads of cash in the bank to carry you through, that’s a different story. But without any buyers lining up, your own home potentially facing foreclosure, your car on the verge of being repoed and the bank unwilling to bend, you might just have to face the fact that you gave it a good fight but the battle is over.

In that case bankruptcy might wind up being the most logical solution to give you an opportunity to get a fresh start by discharging the debts you can’t pay. Sure bankruptcy is emotionally draining and you have to start over again but it can give you a chance to begin again instead of just being on the receiving end of all that is going on now.

I went bankrupt, it sucked, but in the long run I did have an opportunity to move forward with my life, my new life. I no longer did real estate development, for me that experience was too painful, but I went on to do other things and have a different future.

Oh and let me not forget that if your public identity to the world has been as a builder, developer and contractor, one of the hardest things you can do is to fold the business. Everyone will know and it is a public admission of failure. It is but, your business is not what defines who you are unless you let it. Don’t make the mistake of trying to hold on too long and lose everything just to maintain an image that you can no longer afford due to circumstances beyond your control.

Of course, you can always keep putting one foot in front of the other and just wait until stuff is taken away from you by the banks and lenders. When that starts happening then that will be a big clue that it’s over.

Big Hug!

@GetOutOfDebtGuy

P.S. First item to address though, get those car and home mortgage payments current.

How to Get Out of Debt With the Get Out of Debt Guy » real estate developer

Savannah Man Faces A Potential 750 Years In Prison For Bank Fraud

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