Suits question real estate transactions

  • Follow Metro

LaKenya Barthelemy wishes she had listened to her mother.

Ernestine Evans was suspicious of the claims that S.D.A. & Associates would help her daughter and son-in-law, Ernie Barthelemy, sell their East Pine Ridge Drive home and get the family out from under a mortgage they couldn't afford. But they signed up with S.D.A. in March 2007, moved back home to Louisiana and gave owner Regina Preetorius power of attorney to deal with the house.

"That was the last time we talked," Mrs. Barthelemy said from their current home in Vidalia, La.

She never knew of the sales contract Kathryn Heath signed in September to buy 1545 E. Pine Ridge Drive for $174,900 from S.D.A. Mrs. Barthelemy didn't know Ms. Heath paid $10,000 down and gave S.D.A. an additional $10,800 in monthly payments until the Barthelemys' mortgage holder foreclosed and evicted Ms. Heath in April.

The Barthelemys lost about $10,000 in equity they had in the home. Ms. Heath lost her down payment. And an investor who put up $50,000 in exchange for a security deed on the house probably won't get any of her money back either.

What happened with 1545 E. Pine Ridge Drive was repeated over and over by Ms. Preetorius.

Three lawsuits have been filed against Ms. Preetorius accusing her of fraud and racketeering, and a number of people The Augusta Chronicle talked to who had dealings with S.D.A. say they, too, will be contacting attorneys.

HERE'S WHY: According to the lawsuits and those who talked with The Chronicle , instead of helping people catch up with mortgages or sell their homes, Ms. Preetorius treated the property as her own and obtained second and third mortgages on the houses. Investors gave S.D.A. money in exchange for security deeds on the properties. The investors' security deeds are worthless, however, if the original mortgage lender forecloses and the equity in the house can only pay off that loan. And when the original mortgage lender forecloses, anyone living in the home is evicted.

That's what happened on East Pine Ridge Drive. When the Barthelemys' mortgage holder stopped receiving monthly payments on the house, it started the financially devastating chain reaction.

In S.D.A.'s wake are more than 40 foreclosures, 12 involving Ms. Preetorius or her various business entities, and about a dozen people who went bankrupt. By the time Ms. Preetorious and her husband filed for Chapter 7 bankruptcy Aug. 4, she had been involved in the transfer of properties with a combined fair market value of more than $10.6 million. She had also persuaded investors to give her nearly $3.7 million in exchange for security deeds on properties.

Georgia law requires licenses to sell real estate and securities. Ms. Preetorius has no professional license, according to the secretary of state's records.

Jeff Ledford, the commissioner of the state's Real Estate Commission, said the law allows a person to buy and sell property for their personal investment, but no one can use the exception to get around the law that requires a real estate license.

Obtaining power of attorney isn't a normal step in real estate transactions, Mr. Ledford said. A licensed real estate agent could lose his license if he misleads a buyer about his own personal involvement in a transaction.

There's another step needed in real estate transactions: the seller's mortgage lender must be notified.

A spokeswoman for Wells Fargo Home Mortgage, which has foreclosed on at least three properties Ms. Preetorius has obtained, had this to say:

"If ownership of the property is transferred without the lender's consent, depending on the circumstances, the entire loan can be called due," said Debora Blume, who works for Wells Fargo's communication department in Des Moines, Iowa.

In an e-mail response to questions from the newspaper, she wrote, "Wells Fargo can't comment on whether this property transaction was proper, because we had no knowledge of the transfer. However, had we been contacted, we probably would not have consented."

S.D.A. touted itself on its Web page as "a multi-service company who has the ability to BUY, REPAIR, MARKET, and SELL HOMES ... We are problem solvers who can make your monthly mortgage payments evaporate."

A number of those who became involved with the company told The Chronicle that they were impressed with the Christian attitude of the business. They were also assured of the legality of what they were told inside the Reimer law firm where Ms. Preetorius shared office space, they told the newspaper. There were real contracts, real deeds filed in counties' official property records. Neither the Better Business Bureau nor Chamber of Commerce listed any bad marks against the company.

State and federal law enforcement officials report no open investigation of S.D.A. The Chronicle learned of Ms. Preetorius' business earlier this year when stories such as Ms. Heath's came to its attention through court hearings and records checks.

Attorney Pete Theodocion, who is representing Ms. Preetorius in two of the civil lawsuits filed against her, said his client has done nothing wrong in the cases he knows about. He said she got caught short by the crash in the real estate market.

In an e-mail response to the newspaper, Ms. Preetorius said she believed it was best to follow her attorney's advice and not talk with the newspaper.

Attorney Sue Reimer, who shared office space with Ms. Preetorius and assisted with the land deals and incorporation of her various businesses, according to state and county legal documents, would only say, "We are not associated with them any more."

Ms. Preetorious has had several businesses: Southeastern Holding Group, R.M.P. Holding Group, S.M.B. Holding Group, A.C.B. Holding Group, D.T.B. Holding Group, Preetoria Inc., and Omega Holding Group. The only business still licensed is S.D.A.

Lathaniel Harris knew Ms. Preetorius through S.D.A. He signed a lease-purchase contract with her on June 21, 2006, for a small, three-bedroom home on Old Highway 1.

Ms. Preetorius told Mr. Harris and his wife that S.D.A. helped people own homes, he said. They signed a lease-purchase agreement and a second contract, a "sweat equity agreement." In exchange for repairs and upkeep, S.D.A. would knock $4,200 off of the $85,000 price tag.

The Harrises and their four children, newborn to 12 years old, thought of the home as their own. They made plans to add another room, Mr. Harris said.

But then a county marshal showed up on the doorstep this summer with an eviction notice.

Wells Fargo, which provided a $58,610 mortgage for the home purchase in 2002, foreclosed on the property in April when it stopped getting payments.

On paper, S.D.A. owned the home. Ms. Preetorius obtained power of attorney from the original owner and transferred the title to S.D.A. in 2005. She gave an investor a $40,000 lien on the house.

Mr. Harris said Ms. Preetorius first told him not to worry because she would fight the mortgage company. Then she stopped taking his calls, Mr. Harris said in June as he stood in the front yard, wondering out loud how he was going to find another home for his family.

On Friday, he was still trying to find a place.

"The only thing they were doing was helping themselves," Mr. Harris said.

WHEN MS. PREETORIUS MET with Barbara Ring to explain how her company worked, Ms. Ring was assured that under Georgia law, the security deeds she would get for her $100,000 investment were indeed secure, Ms. Ring said. She was told the worse thing that could happen was she would end up with the property. Because they were sitting in a lawyer's office, she took the statement as true. The 12 percent return Ms. Preetorius proposed didn't seem too good to be true because she already had an investment paying 9 percent, Ms. Ring said.

She got interest checks for five months, then nothing. Her money was sunk into a $1.85 million home in Duluth in Gwinnett County. Property records show it is owned by S.D.A. but is in foreclosure.

Ms. Ring is one of 108 potential unsecured creditors listed on the Preetorius bankruptcy petition. The court will have difficulty notifying Ms. Ring of any proceedings, however, because Ms. Preetorius gave the court a wrong address for Ms. Ring.

Ms. Ring retired after selling antiques for 38 years, but she has to reopen her shop and sell off her personal antiques because of the $100,000 loss.

"I thank the Lord every day that I have these things. I may have an empty house when I'm done, but I'll have some money in the bank to start over," said Ms. Ring, who is nearly 69.

ARTHUR M. KENT invested with S.D.A. in November 2006. He filed suit last month seeking his $50,000 investment. He alleges the deal with S.D.A. was fraudulent and that he is entitled to punitive damages as well.

Mr. Kent's lien is on 4070 Pinnacle Way in Hephzibah. Not only did another investor have a $40,000 lien on the same home, First Franklin Financial Corp. has the $153,900 first mortgage on the property and filed notice of foreclosure after Ms. Preetorius got control of the house.

Richmond County property records lists S.D.A. as the owner. In 2005, the owner was in foreclosure when he gave Ms. Preetorius power of attorney for the house, now valued at $185,580. She transferred ownership to S.D.A. six days later.

As with all of the property records involving Ms. Preetorius, her husband and her mother, Marie Champagne, Ms. Reimer or the lawyer's staff was involved with the transfers.

Ms. Champagne was convicted in 1989 of mail fraud for her role in a multi-state scam that promised million-dollar loans to businesses through her service, Financial Business Brokers Inc., according to reports in The Chronicle . She was sentenced to two years in prison and ordered to pay more than $800,000 in restitution.

Michael Rollins hired attorney Daniel Wright McLeod to get his Evans home back from S.D.A. Mr. McLeod was successful in February, but Ms. Preetorius had already exchanged a $25,000 security deed on the home with an investor.

Mr. Rollins worked out a payment plan with his mortgage company and stopped a foreclosure action.

If Mr. Rollins had lost the house in foreclosure, he would have had no obligation for the $25,000 security deed on the house. But since he has the property, he might be responsible for the $25,000 Ms. Preetorius got from an investor.

"Now that means we have to fix this," Mr. McLeod told Mr. Rollins, a military contractor who was in Iraq when his wife made a deal with Ms. Champagne to market and sell their home.

Andrew Sumpter had a similar agreement with S.D.A.

The Army veteran serving in South Korea and his ex-wife, who is on her second tour of duty in Iraq, gave Ms. Preetorius power of attorney in October 2005 for their Breeze Hill Drive home. Mr. Sumpter said he met with Ms. Champagne and signed a contract that stated he and Alester Sumpter were relieved of their mortgage obligation because S.D.A. would assume the loan. He thought everything was over until a chance check on his credit report in December 2007. The mortgage company hadn't received any payment for the past three months.

The Breeze Hill Drive home is in S.D.A.'s name, and until recently it was occupied by a couple who paid a $6,700 down payment and $1,000 a month as required by their lease purchase contract.

Property records show an investor gave Ms. Preetorius $11,000 in exchange for a lien on the property.

"The only thing I seem to own is the loan," Ms. Sumpter said. "All she did was sell us a bunch of lies."

Mr. Sumpter and his ex-wife are listed as potential creditors on Ms. Preetorius' bankruptcy petition. The court might have trouble keeping them up to date on proceedings. The address Ms. Preetorius provided for both Sumpters is 3016 Breeze Hill, the $124,280 home they turned over to Ms. Preetorius nearly three years ago.

MS. PREETORIUS DID PAY some homeowners for their properties. She bought an Albemarle Court home in November 2004, possibly sparing the owner from property foreclosure.

According to property records, the house is now owned by the Richmond County Homeless Animal Trust. An investor holds a $15,000 lien on the house, and a mortgage company has initiated foreclosure proceedings against Ms. Preetorius.

She and her husband have defaulted on more than $2.5 million in various mortgages, according to court and property records.

The Preetoriuses, however, claim only a total of $2.47 million in liabilities, according to their bankruptcy petition. They did not count the investors holding security deeds, or the property sellers and buyers.

They list zero assets and state their only income is unemployment compensation and child support payments, according to the bankruptcy petition.

The Albemarle Court home is listed with foreclosed property, along with 16 other houses that appear in property records as owned by various entities, including the Columbia County Wildlife Trust and the Coweta County Disabled Veterans of Desert Storm.

One of the properties missing from the list is the Breeze Hill Drive home the Sumpters once occupied. According to Richmond County property records, it is owned by S.D.A.

According to the bankruptcy petition, the Preetoriuses intend to contest any claims brought by any of the listed buyers or sellers, such as the Sumpters.

Mr. and Mrs. Barthelemy are on that list, too. Mrs. Barthelemy said they sought Ms. Preetorius' help when she became pregnant with their third child and lost her job. They considered filing for bankruptcy then, but thought the sale of their home would spare them. "She led us to believe she was an agent who helped people get out of houses they couldn't afford," Mrs. Barthelemy said. "I was crazy and took her word for it."

Reach Sandy Hodson at (706) 823-3226 or sandy.hodson@augustachronicle.com.

WHAT'S NEXT

On Aug. 28, American Home Mortgage Services will ask the bankruptcy court to allow it to proceed on its foreclosure of Regina and Charles Preetorius' Windmill Lane home. The bank claims

it hasn't received a payment on the couple's $567,000 mortgage since September.


On Sept. 3 at 9 a.m., the bankruptcy court will hold the first hearing for the Preetoriuses and any potential creditors.


In less than four years, Ms. Preetorius, through various business entities, has had control at some point of the following:


- 30 houses in Richmond County, total value about $2.79 million


- 19 houses in Columbia County, total value about $3.83 million


- 3 houses in Henry County, total value $697,500


- 1 home in Clayton County, value $193,062


- 1 home in DeKalb County, value $203,800


- 1 home Gwinnett County, value $1.85 million


- 1 home in Coweta County, value $882,035


- property in McDuffie County, value $127,390


- property in Burke County, value $50,000

Source: County property records: value is listed fair market value

Comments (142) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
ruddyardkipperlings
0
Points
ruddyardkipperlings 08/18/08 - 06:49 pm
0
0
That's why I was asking pete

That's why I was asking pete and ol friend. If the gave her pwr of attorney, to me, she could actually do whatever she wanted. And, I noticed, it was suits being filed, not arrest warrants issued.

hms2008
0
Points
hms2008 08/18/08 - 06:57 pm
0
0
Exactly!!!!! She had Power

Exactly!!!!! She had Power of Attorney, given by these people willingly to control their property because they were in trouble. NOT ILLEGAL!!!!! These are all civil suits, not criminal. I think Pete must have a beef with these people and wishes they would be charged criminally.

hms2008
0
Points
hms2008 08/18/08 - 07:07 pm
0
0
And Pete, last time a I

And Pete, last time a I checked, a hateful old mtg broker does not make a Real Estate Law expert. Real Estate has many "Grey" areas, and if you truly knew anything about real estate and property law rather than just how to run a credit report and fill out a loan app you would know that "Creative" real estate does not mean illegal real estate. I am not saying that what she did is ethical, because I dont think it is, but unethical and illegal are two different things. One you live with your conscience, the other, you live in jail.

they call me pete
0
Points
they call me pete 08/18/08 - 07:08 pm
0
0
you people are idiots. Just

you people are idiots. Just idiots. Good luck regina. I hope they only give you 50 years. Civil will turn into criminal. I'm done with this. You got caught either way. Just another bad scam artist.

ruddyardkipperlings
0
Points
ruddyardkipperlings 08/18/08 - 07:14 pm
0
0
Oh, I believe she is

Oh, I believe she is definitely a scam artist pete, I just wondered if it were criminal because I truly don't know.

they call me pete
0
Points
they call me pete 08/18/08 - 07:45 pm
0
0
your not the idiot rudd.

your not the idiot rudd. these others are regina and her friends. I am a little bit on the inside and I am of the understanding that she is being investigated by criminal courts.

hms2008
0
Points
hms2008 08/18/08 - 07:54 pm
0
0
I am not Regina nor her

I am not Regina nor her friend. I simply know Real Estate. I do think some charges may be brought regarding the folks that were making payments to her, then were evicted. That is terrible. And she should be held accountable for that. I am simply saying that the other allegations by the former owners and investors are just not illegal. They gave her the property and the investors gave her the money........ they risked it and lost it. Simply as that. I am also done with this. C ya

ruddyardkipperlings
0
Points
ruddyardkipperlings 08/18/08 - 08:13 pm
0
0
Thanks pete and friend for

Thanks pete and friend for the insight. I truly didn't/don't know about those type of things.

CAPSGAL
0
Points
CAPSGAL 08/18/08 - 08:27 pm
0
0
Whew....lot of communication

Whew....lot of communication while I've been showing property this afternoon. Bottom line..."if it sounds too good to be true it probably is". Those who signed over their property certainly didn't show their insight but Regina and group certainly seemed to take advantage of these folks. Any tenant risks being evicted in the state of Georgia...we're a non-judicial foreclosure state. Only about 10 states like that left in the US. Years ago "wrap-mortgages" were done (similar to the Regina scam) but they have been outlawed. Wonder if Regina will be represented by the Reimer firm???

Whoisthiscrook
0
Points
Whoisthiscrook 08/18/08 - 09:27 pm
0
0
A person who has power of

A person who has power of attorney for someone cannot sign a deed giving property to herself with that power of attorney.

KSL
134595
Points
KSL 08/18/08 - 09:49 pm
0
0
I can't believe you people

I can't believe you people who are taking up for what this woman did. Thank god she is not a Realtor. She would be giving us a bad name, difficult to overcome. Reputable people, be they Realtors, Mortgage professionals, and yes, even lawyers would not behave in a way to profit at the expense of their clients in the way this woman allegedly has.

KSL
134595
Points
KSL 08/18/08 - 09:51 pm
0
0
As a Realtor, and agent for

As a Realtor, and agent for my client, with all the duties that carries, I would never accept having the POA for my client.

jack2006
106
Points
jack2006 08/18/08 - 10:04 pm
0
0
Wow, how people can be con.

Wow, how people can be con. You can't take over a loan without the first lien holder knowing about it. Some loans are still not assumable by a new buyer. A power of attorney legally can not give that to you for any lender. If the lender does give you the right to take over the loan, it will not be by a power of attorney doc. The lender in most of these cases did not know what she was doing because some of the homes foreclosed on the original buyer and not her. In other words, she did not own these properties free and clear. I guess that the money that she used from the investors, she purchased out right for some of the properties. Who knows. My question, how and why some of these properties were recorded or what docs they used to make these recordings. By having these properties recorded, she was able to make loans on these properties because it showed her as owner. Truthly, she was not. Yes, there are foreclosed properties that has wrong buyers on court house records when they do go into default. It make you wonder how deep is the scam that is going on here in both counties. This same scam was on 20/20 about a year ago with an individual in Florida.

jack2006
106
Points
jack2006 08/18/08 - 11:20 pm
0
0
I am not surprise. When

I am not surprise. When there is rapid growth, there is some type of fraud going on undetected until it hits the brick wall of running out of users or people to get over on. Or, they would look the other way while the destruction is going on to protect the network of crooks and try discredit good people in the process. Please keep in mind, that there are good professional people still here doing the right things and trying to handle all of the mess to help try to get things back stable. It was too many wild fires burning out of control while some of the right groups in charge not taking care their business to stop it. I guess that you could say that we were over powered by this madness of bad behavior when nothing was corrected. This will not be an easy job to clean up or it will go away overnight. It makes you wonder if you have clear title of your property. It's sad to think that you would have to start checking your title each year at the courthouse to see if you are still the owner of records there.

CSRAider
0
Points
CSRAider 08/19/08 - 07:45 am
0
0
I know a Guy named Tony That

I know a Guy named Tony That would pay someone a visit for actions like this.

CSRAider
0
Points
CSRAider 08/19/08 - 07:46 am
0
0
I know a Guy named Tony That

I know a Guy named Tony That would pay someone a visit for actions like this.

Reality
3
Points
Reality 08/19/08 - 09:50 am
0
0
In general people are just

In general people are just stupid...

Farful
7
Points
Farful 08/19/08 - 11:04 am
0
0
Oh so true, reality.

Oh so true, reality.

jack2006
106
Points
jack2006 08/19/08 - 12:15 pm
0
0
I have another question for

I have another question for the courthouse records. If the first lien holder did not send the satisfied deed for recording, how was she able to record her deed as ownership on some of these properties without satisfying the first? This is a little twisted but how can you record such deed when the first has not be satisfied and recorded. She should have been a second, third, or whatever number lien holder on the property. How was she able to skip this step without the knowledge of the first lien holder that was still expecting payments on the 15, 20 or 30 year mortgage that was probably taken by the original owner? Remember, some of these properties did foreclosed in the original's owner's name and not hers or her company's name.

they call me pete
0
Points
they call me pete 08/19/08 - 01:54 pm
0
0
the onoy reason I know of

the onoy reason I know of jack is that the other liens were subordinate liens that did not require satisfaction of the first. In the article, you note that she used privalte lenders, well, they are people like you and me. The private lenders are led to believe that they hold possession of a home because they have a lien on it when in essence they don't because their lien is secondary to the first. That's why they private mortgagers are getting scammed too. I'd like to know where the money went because onoy a 15000 home was paid off. That's it. Rent was collected on all properties and kept by SDA as was 'down payment' money and the private mortgages, second mortgages and such. I now hope Regina gets 80 years.

bulldog08
0
Points
bulldog08 08/19/08 - 02:52 pm
0
0
Regina DID have a realtor

Regina DID have a realtor (not real estate agent) listing her properties ....anyone seem to recall that fact?

hms2008
0
Points
hms2008 08/19/08 - 03:24 pm
0
0
I thought that all of these

I thought that all of these investors were aware that they had 2nd liens on these properties. At least that is how I read the article. If they were aware they held 2nd position liens, how was she in the wrong?

they call me pete
0
Points
they call me pete 08/19/08 - 05:51 pm
0
0
I give up. This is getting

I give up. This is getting outta hand. How do some people get outta bed in the morning? Lol.

CAPSGAL
0
Points
CAPSGAL 08/19/08 - 08:10 pm
0
0
Well, this Realtor did not

Well, this Realtor did not know she was working with a Realtor. I actually (and I'm proud to say it) knew very little about her...only that I heard her pitch about "saving folks who were headed to foreclosure" and that "Sue Reimer was the only attorney that could handle this difficult of a transaction". Matter of fact I believe Regina said that "Sue was the only local attorney who understood it". So....my feelings are all those who knowingly took advantage of folks and all of those co-horts of Regina who "suspected" what was being done was not totally legit should suffer the consequences to the fullest extent of the law.

KSL
134595
Points
KSL 08/19/08 - 09:17 pm
0
0
Bulldog, you are a bad

Bulldog, you are a bad advertisement for UGA. "Regina DID have a realtor (not real estate agent)" Your comment. What in the h do you mean by that? Do you not know that all Realtors are real estate agents and that not all real estate agents are Realtors.

KSL
134595
Points
KSL 08/19/08 - 09:20 pm
0
0
You defenders of this woman

You defenders of this woman remind me of the Lakeside football players defending Grooms for his illegal play last year.

KSL
134595
Points
KSL 08/19/08 - 09:23 pm
0
0
And whats with two posters

And whats with two posters I've never seen before who both have 2008 in their name?

KSL
134595
Points
KSL 08/19/08 - 10:06 pm
0
0
There is a very good reason I

There is a very good reason I have more. Wouldn't you like to know.

KSL
134595
Points
KSL 08/19/08 - 10:06 pm
0
0
Are you a Lakeside football

Are you a Lakeside football player form last year? You sure do post like one.

KSL
134595
Points
KSL 08/19/08 - 10:08 pm
0
0
Bet you are related to the

Bet you are related to the "lady" in question.

Back to Top

Top headlines

Charges for sex offender

A man convicted of sex charges in Columbia County, who then went to prison for child molestation in south Georgia is back behind bars.
Search Augusta jobs