Suits question real estate transactions

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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
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KSL
140576
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KSL 08/19/08 - 09:10 pm
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Ooooh, homework to do or it's

Ooooh, homework to do or it's past your bedtime?

KSL
140576
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KSL 08/19/08 - 09:15 pm
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Which is worse? Someone who

Which is worse? Someone who scams people and knows they are doing it, or someone who scams people and is too stupid to know that that is what the results will be?

jack2006
106
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jack2006 08/19/08 - 09:32 pm
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This is a prime example of

This is a prime example of how business is handled in this area. You rather attack someone personally and not handle the issue at hand. The business suffers from the silly actions that go on and it doesn't need to be in a business office or any business transactions. This is where so many people get jack in the process in handling their personal business no matter what it is. You get so workup about nothing that you don't really see that you are being used or taken advantage of. No, I don't have anything to say personally about them because I don't know them. What they did was simply wrong. If you can't see it or believe it, then let someone run the same game on you and your family. Please stay focus because it is a lesson that needs to be learnt here. There are many more people in this situation, so let's try to take this time to help them. Name calling, I hope that we are all adults here with wisdom. Knock on your neighbor's door and ask them if they need your help today. Foreclosure is not a pretty picture. It will take time for families to overcome it. Foreclosures have affected everyone in the US. Everyone is paying for it even if you aren't in default on anything.

KSL
140576
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KSL 08/19/08 - 09:52 pm
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Young at heart, perhaps, get.

Young at heart, perhaps, get. You do appear to have some vested interest in defending someone who has been accused of egregious behavior. Didn't see much in actual sound points in your defense in your comments. Best advice given by defense attorneys is "no comment." When a story like this comes out, the more the defenders cry out, the more determined the public gets for revenge. No comment is such good advice. Why not take it?

KSL
140576
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KSL 08/19/08 - 10:08 pm
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get, I hope that your faith

get, I hope that your faith and trust in this person is well placed. I would hate for you to suffer the agony of finding out that your trust has been misplaced. I also realize that the reporting of something does not constitute being guilty of that which is reported. I'm usually the last one to condemn someone for a short report in the paper. We are not given all of the facts. But when someone I trust backs up the allegations, that is entirely a different matter. Hopefully, all of the facts will come out. And anyone who is guilty will be punished severely.

KSL
140576
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KSL 08/19/08 - 10:22 pm
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get, why does what she did

get, why does what she did seem so condemning in the article? You have to admit that what is being reported is really negative at best. I think a lot of people think "where there is smoke, there is fire." If all of this is truly untrue, then there has been a lot of action to ruin someone's reputation.

KSL
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KSL 08/19/08 - 10:23 pm
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And the lack of understanding

And the lack of understanding about real estate agent and Realtor still bothers me tremendously.

Whoisthiscrook
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Whoisthiscrook 08/19/08 - 10:49 pm
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KathySue, Please explain the

KathySue, Please explain the difference between real estate agent and realtor for those of us who don't know.

they call me pete
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they call me pete 08/19/08 - 10:59 pm
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a realtor is a real estate

a realtor is a real estate agent. She was neither. Never has been. Oh by the way, her mother worked under the table for her as a property manager. They also got caught trying to forge w-2's for little miss Champagne. Whoops! Should i have mentioned that along with the fact that they tried to strong arm an appraiser to increase the value of a quad miss Champagne wanted to buy? Crooks everywhere you look. Keep running your trap and TC will spill all the beans on the crap y'all tried to pull. Run that yap some more old friend getreal. Do it. Come on. I gotta bucketload I'm more than willing to share with anybody that wants to listen.

KSL
140576
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KSL 08/19/08 - 11:01 pm
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Someone, and I'm not

Someone, and I'm not bothering to go back and look to see who, brought up the terms real estate agent and Realtor. Now I realize the person was in error and really meant " real estate investor." In this case, whether someone is a Realtor or a real estate investor is a non-issue. No Realtor who abides by our code of ethics would have been involved in any property transactions such as these. Period. No, not, nada.

Whoisthiscrook
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Whoisthiscrook 08/19/08 - 11:04 pm
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I understand the difference

I understand the difference between a real estate agent and a real estate investor completely, getfn. . . . I was addressing KathySue's statement that "the lack of understanding about real estate agent and Realtor still bothers me tremendously". Are you not reading all the posts?

KSL
140576
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KSL 08/19/08 - 11:07 pm
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Now, the difference between a

Now, the difference between a real estate agent and a Realtor is quite simple. A real estate agent is licensed to sell real estate. A Realtor is a real estate agent licensed to sell real estate who has to live up to a code of ethics that first and foremost is an agreement to protect the public when someone in the public employs a real estate agent (Realtor) to find them property or sell their property. We operate at a higher ethical level and put the best interests of our clients and the public in general before personal gain. Believe it or not. There are many of us who actually do that.

KSL
140576
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KSL 08/19/08 - 11:14 pm
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And that is not to say that

And that is not to say that real estate agents are unethical. Many choose not to have to pay our dues, national, state and local, and dues also to be members of the Multiple Listing Services. Doesn't mean they operate unethically. It does mean that they don't have the hundreds of people locally who are in touch with listings on a daily, no, up to the minute basis.

Whoisthiscrook
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Whoisthiscrook 08/19/08 - 11:15 pm
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Thank you, KathySue. I had

Thank you, KathySue. I had heard in the past there was a difference and didn't know exactly what it was. I just knew that Realtor was better qualified (or quality?) than real estate agent. I appreciate your answer. I am sure you are correct and believe there are many very good agents whose priority is the best interests of their clients.

KSL
140576
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KSL 08/19/08 - 11:16 pm
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Whois, did I explain it well

Whois, did I explain it well enough?

KSL
140576
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KSL 08/19/08 - 11:17 pm
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Night, Shannon.

Night, Shannon.

Whoisthiscrook
0
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Whoisthiscrook 08/19/08 - 11:18 pm
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Yes, KS, thank you much!

Yes, KS, thank you much!

KSL
140576
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KSL 08/19/08 - 11:20 pm
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Thank you, whois.

Thank you, whois.

Whoisthiscrook
0
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Whoisthiscrook 08/19/08 - 11:20 pm
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By the way, KS, I would not

By the way, KS, I would not want your job! lol (I don't mean this in a bad way; I am serious - you have a hard job.)

Whoisthiscrook
0
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Whoisthiscrook 08/19/08 - 11:22 pm
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Where are you pete? talk to

Where are you pete? talk to us .......

KSL
140576
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KSL 08/19/08 - 11:23 pm
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One of these days who, I

One of these days who, I would like to tell you what I have just been through for a client and a for sale by owner. People do not understand what Realtors have to go through. LOL And it ain't over yet.

Whoisthiscrook
0
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Whoisthiscrook 08/19/08 - 11:28 pm
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Can I email you, KS?

Can I email you, KS?

KSL
140576
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KSL 08/19/08 - 11:58 pm
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they call me pete
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they call me pete 08/20/08 - 10:38 am
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That's what I thought.

That's what I thought.

kk19299
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kk19299 08/20/08 - 10:46 am
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They are all crooks and do

They are all crooks and do deserve jail time as they mispresentated themselves as the property owners to "investors". Not only are Regina, Marie, Charles, and Sue to blame but the lenders and the appraisers as well. Hopefully all of the facts will come out. For it to get this big.....10.6 millon....there had to be fraud activities all around! I can tell you that people who go to seminars and learn about ways to make money without having the money are assuming a risk that if there deals go bad.....the deceived will still want their day in court. If I walk around with money in my pocketbook...do I deserved to be robbed??!!

bulldog08
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bulldog08 08/20/08 - 03:06 pm
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Sorry I haven't posted back

Sorry I haven't posted back sooner - I am unable to use the computer where I work for personal business so I can only post when I get home from work. I'm sorry my post was mis-communicated to everyone. What I was trying to state was a Realtor from Blanchard had her listings for months on end and was showing the properties. I know that Realtors have an ethical code - which means she either was able to con the Realtor or the Realtor knew what the heck was going in. I tend to believe the Realtor was also conned into the listings (I like giving benefit of the doubt without knowing all the facts). I believe Regina was pretty good at conning folks who were desperate for any little bit of hope that their home wouldn't be taken away from them.

they call me pete
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they call me pete 08/20/08 - 03:23 pm
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Charles is not a part of that

Charles is not a part of that group canubelieveit. Get ur facts right.

kk19299
0
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kk19299 08/20/08 - 08:37 pm
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They call you pete ....I have

They call you pete ....I have no wish to fight. His name is Charles Gregory Preetorius and yes he is just as involved and therefore just as guity. He went with her everywhere and was well aware of what they were doing. Those are the facts. Regina was the president and Marie was the vice president and he did not stick his head in the sand like an ostrich.

Tell why you think he is/was innocent?

they call me pete
0
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they call me pete 08/20/08 - 09:04 pm
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wrong charles. another

wrong charles. another charles was accused earlier. my apology. the accusers have removed all their posts.

they call me pete
0
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they call me pete 08/20/08 - 09:05 pm
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I knew that Charles by

I knew that Charles by Greg..or better..."shut up honey and sign this"

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