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Scammers renting out foreclosed homes across Vegas

Reported by: Sergio Avila
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Updated: 5/13/2014 8:18 am
LAS VEGAS (KSNV — A scam is targeting people trying to get on their feet and establish a home in the valley.

Real estate fraud became widespread during the economic downturn, but the Nevada attorney general acknowledges it’s still a problem that continues to plague southern Nevada. It's driving down property values and driving up costs.

Officials in the AG’s office are trying to do what they can to put a stop to it.

Chief Deputy Attorney General Russell Smith says that many times the scammers are Realtors, or familiar with the real estate process, and they use that knowledge to deceive.

Smith says his office is seeing a dramatic rise in scams involving people renting homes they do not actually own. It’s a ploy designed to dupe the renters as long as possible while pocketing their deposit and any rent paid.

Smith says thieves are targeting homes that are undergoing bankruptcy proceedings before they're being foreclosed on by the banks.

How the scam works

A homeowner goes bankrupt and gives up ownership of the house. They pack up and leave before the banks foreclose. Thieves move in and file forged documents with the county saying they're the new owners. They then rent the home to unsuspecting tenants, and -- almost before those renters unpack -- they're being evicted.

The thieves will break into the home's lockboxes and steal the keys, change the locks and rent out the house.

It's a scam Rob Zaruba is all too familiar with. He changes locks for the banks when a home is being foreclosed.

Zaruba says at least a few times a week he's changing locks on homes that have been rented out when they're supposed to be empty.

“Probably an hour into the job, a gentleman comes up to me and says, ‘What are you doing here?’ I tell him, it's a bank-owned home, foreclosure. ‘Well I have a lease. This is my house.’

“It's just like every day was a guessing game.”

Edwina Manning was one of those renters.

“I had the police kicking down my door and they rushed in; all my kids were scared,” she said.

Manning lived in a constant state of stress for about a year. She lost thousands as a result.

Rodney Taylor, Marchello Tanasi, Ikechukwu Olekaibe and John Olekaibe recently were indicted on charges stemming from these scams.

Marcus Conklin with the Lied Institute for Real Estate Studies at UNLV says everyone is hurt by these crimes, not just the victims.

The homes being rented out typically fall to disrepair, and that harms the community.

“Because of that, the value of the property goes down,” Conklin said. “And what we know from an economic perspective is that if the value of one house goes down, it’s dragging down the value of properties around it.”


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