's surrender of equity to the flipper.
ABC Capital Baltimore, LLC and its vast family of alphabet-soup related entities have added a thick layer of fraud to this old business model.
Since at least 2019, ABC has induced buyers to pay up-front renovation costs, management fees and commissions unrelated to the actual purchase. This scheme has been well described by The Baltimore Banner, in this article. For five years, our Firm has sued ABC for its failure to renovate, failure to manage, and collection of improper real estate commissions paid for un-licensed real estate brokerage.
In 2022-2023, ABC and its owners initiated new frauds, including outright theft of earnest money deposits from prospective purchasers. Added to the usual ABC frauds, the new schemes resulted in millions of dollars lost by prospective purchasers of Baltimore real estate. This new scheme has also been well described by the Baltimore Banner, in this article.
These schemes have done deep and lasting harm to The City of Baltimore. Millions of dollars intended for acquisition and renovation of blighted properties has quite literally bounced out of our City. Money paid in advance for purchases and renovation has been immediately wired out of the City, to unknown global accounts. The properties have meanwhile remained blighted, often falling into tax sale, City receivership, or destruction by deadly casualty loss. Hundreds of forged title instruments now remain in the land records, a long-lasting dragging anchor on future property transfers and development.
The Maryland Insurance Administration has opened an investigation into the activities of title professionals that aided ABC, as is detailed in this Baltimore Banner article. But this administrative process will not benefit the City of Baltimore, which must find ways to clean up and manage its own housing stock.
The ABC principals, including Jay Walsh, have continued to operate through shell entities, hiding behind others in order to avoid broad real estate industry warnings abut their activities. It is a game of "whack-a-mole," where elimination of one entity's activities merely moves the fraud to other entities.
If you are considering the purchase of investment properties in Baltimore City, please engage ONLY licensed real estate professionals- such as Maryland licensed brokers, Maryland licensed lawyers and accountants. With professional advice you will learn the intricacies of Baltimore's tax sale and receivership systems. Also, NEVER pre-pay renovation anticipated expense at settlement to the flipper.
Most importantly, insist on a written contract that is based on Maryland law, and which includes the owner that appears on the property deed.
!Tener una propiedad es un trabajo duro! Haz el trabajo.
