On behalf of a group of unrelated investors, a lawsuit has been filed in the Los Angeles Superior Court against Fortuno Inc., a prominent Lodi, Calif.-based real estate investment company, which describes itself as a large nationwide buyer of foreclosed homes. The lawsuit alleges that Fortuno and its outside marketing representatives, engaged in illegal acts relating to a “hands-off” real estate investment program that enticed the plaintiffs to invest money in the purchase and re-sale of distressed homes in Ohio and Michigan with the promise of high returns upon flipping the property to the new buyer.
The lawsuit was filed by the Law Offices of Andrew M. Wyatt, a Los Angeles-based firm. It alleges that Fortuno, calling itself the “Costco of Real Estate,” misrepresented to plaintiffs that it would sell plaintiffs’ marketable homes at low-price mark-ups and that it could then help them re-sell the houses to third parties at substantially higher prices. Instead, Fortuno sold plaintiffs’ homes in poor unmarketable condition with high-price mark-ups while also failing to find qualified buyers.
According to the lawsuit, after purchasing the properties, plaintiffs unforeseeably encountered significant “fix-up” costs; threats of condemnation by local government officials for safety violations; an inability to sell the houses due to their dilapidated condition and lack of qualified buyers; negative cash-flow; high property taxes; and eviction legal costs when the buyers defaulted on payments. An investors goal was to provide people affordable housing.
In the lawsuit, Fortuno and/or its co-defendants, were sued for 10 violations of law including: Racketeer Influenced and Corrupt Organizations (RICO) Act; untrue or misleading advertising; unfair business practices; professional negligence, negligent and intentional misrepresentation; breach of fiduciary duty; deceit/concealment; unjust enrichment; and restitution/accounting.
Other individuals and companies named as defendants in the lawsuit, include: William D. Yotty, Harry Martin, Barbara Thomas, Bruce Grogg, Sognari International Inc., Steve Francisco, National Realty Inc., National REOS, Mike Sarwari, Michael Hironimus, Phyllis Rockower, Real Estate Club of Los Angeles, Roger D. Cram and Real Estate Brokers International.
The lawsuit is seeking compensatory and punitive damages, plus attorney fees and court costs. In addition, it requests a return of all invested funds and any illegally obtained profits to the plaintiffs, plus interest.
For more information, visit www.amwyattlawoffices.com.