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Investors say ex-‘Fox & Friends’ host turned them into unwitting slumlords

Investors say ex-‘Fox & Friends’ host turned them into unwitting slumlords

Investors say ex-‘Fox & Friends’ host turned them into unwitting slumlords

By: Tim Evans and Tony Cook, Indianapolis Star

In court filings and responses to online complaints, Morris contends he merely referred investors to Oceanpointe and several related entities. Investors’ anger and lawsuits are misplaced, Morris said.

“Clayton Morris and Morris Invest identify with the many investors who lost money through home-renovation, property-management, and other failures by Oceanpointe and its various corporate entities and employees,” Hensel said in the emailed statement. “Clayton Morris and his family purchased properties and were similarly damaged by Oceanpointe’s misconduct. The Morris family and Morris Invest have lost hundreds of thousands of dollars. Clayton and Morris Invest deny all allegations of wrongdoing. Because these matters are currently being litigated, Clayton and Morris Invest are unable to make any further statement and look forward to a swift and just resolution for all.”

Oceanpointe is operated by Bert Whalen, a longtime fixture in Indianapolis’s real estate market who has worked since the mid-1990s as an agent, property manager and investor. Whalen had his real estate license revoked more than a year ago.

Whalen declined to comment for this story, but his attorney, John Tompkins, said Whalen did nothing wrong and met all requirements of his contracts.

Many buyers, however, say they believed they were buying the homes from Morris. His celebrity and online sales videos persuaded them to invest and his company directed them to the properties in Indianapolis. They say he never made it clear he was only a middle man. In at least one case, he even told an investor he owned Oceanpointe, according to an email made public in court records.

Their properties didn’t resemble anything like the ones Morris touted in videos featuring extensively rehabbed houses with quality tenants and a strong return on investment, investors said in lawsuits and interviews with IndyStar.

One buyer paid $52,500 only to learn months later the house had been destroyed by fire a few days before he bought it. He had no idea until he got a demolition order from the city.

Other investors paid more than $60,000 for vacant lots where they say Morris promised to construct new homes, but left them with holes in the ground or lots covered with weeds and trash.

Another investor purchased what he was told was a newly renovated duplex, but learned later it was a run-down triplex where tenants were living without electricity or water.

The horrendous living conditions at another property caused the premature birth and death of a child, according to one lawsuit.

Real estate experts said the impact on the city cannot be underestimated. Many of the homes will likely be abandoned, plaguing city officials and neighborhoods for years to come.

In all, an IndyStar investigation found that Morris has been involved in the sales of hundreds of homes to investors influenced by his celebrity and personable online sales pitches. By several accounts, those investors may have spent more than $30 million on nearly 1,000 homes and vacant lots in some of the city’s most blighted neighborhoods.

The full scope of the problems may never have become known if not for an email last year that revealed — apparently by mistake — the email addresses of more than 200 investors, allowing many to share their experiences and concerns with each other for the first time.

Clayton Morris, the affable former co-host of TV’s “Fox & Friends,” portrays himself on his popular podcasts and YouTube videos as a real estate investment expert who is in the business of helping others achieve financial freedom.

His company, Morris Invest, has been involved in hundreds of property transactions in Indianapolis.

But in his wake is a trail of disgruntled investors, tenants living in deplorable conditions and dilapidated Indianapolis homes that could plague the city for years.

While Morris lives in a $1.45 million luxury home in New Jersey, some investors who thought they were buying turn-key rentals are saddled with boarded up hovels, empty lots, stacks of health and nuisance violations from the city and lost savings.

Morris is the target of at least five lawsuits filed by out-of-state investors who claim he defrauded them in transactions involving dozens of properties. The lawsuits are pending in Marion Superior Court and federal court in Indianapolis. Many others have complained to attorney general offices in Indiana and New Jersey and on consumer and real estate investment websites.

The mostly novice investors say Morris sold them rental properties with a promise to rehab and rent them. All they had to do was sit back and wait for their monthly rent checks.

But for many buyers, the purchases turned into nightmares. Some say their houses were never rehabbed or rented. Others say they received rental checks for several months only to learn later that the house was vacant or uninhabitable. Many discovered the problems after receiving violation notices from city code enforcement or the county health department.

Morris declined an interview for this story. But his attorney, David Hensel, provided an email statement to IndyStar blaming Morris’s Indianapolis business partner, Oceanpointe, for the problems.

‘Fox & Friends’ star power

Morris, 42, began buying and selling investment properties while co-hosting “Fox & Friends Weekend,” a news and entertainment program where he built a reputation as a personable and sincere family man who wasn’t afraid to laugh at himself. He was the show’s designated “gadget guru” and didn’t shy away from stunts like impersonating Johnny Cash with a rendition of “Ring of Fire,” dancing in lederhosen, and bellowing “yabba dabba doo” while dressed like Barney Rubble from “The Flintstones.”

He stepped down in September 2017 after 10 years on the show, telling viewers he was looking forward to sharing his real estate expertise with others.

“I’m going to spend time with family and focus on projects that I’m passionate about: helping people build wealth and passive income and helping empower people,” Morris said.

A Fox News spokeswoman said Wednesday the cable news network had “absolutely no knowledge” of the fraud accusations against Morris.

Morris parlayed his large following on Fox into a popular online real estate investment presence. He gave advice and pitched his company’s services on a blog, podcast and YouTube channel, where he has more than 100,000 subscribers.

In his online presentations, Morris highlights his role as a family man, including photographs and videos with his wife and business partner, Natali, and their three young children. One of his YouTube videos garnered more than a quarter million views.

He pitched a simple system: Schedule a consultation with his team, pick a property in one of the company’s hot rental markets, and let his team do the rest.

“From my client’s standpoint, they watched a video from a very reputable person. … Come to Indianapolis, it’s a great community, you have wonderful return on your investment and we’re guaranteeing that,” said Jynell Berkshire, a real estate attorney who is representing several investors in lawsuits against Morris. “Why not drink the Kool-Aid?”

Investors who say they were scammed told IndyStar they trusted Morris largely because of his public profile.

Jeff Leach, 54, of Gaithersburg, Maryland, purchased his first property through Morris while he was still a “Fox & Friends” co-host.

A self-described Fox News junkie, Leach said he felt like he knew Morris from watching him on TV every weekend. He remembers bragging to his son after speaking to Morris personally on the phone.

“I said, ‘Hey, you see that guy on TV? I talked to him last night!’” said Leach, who is not part of any lawsuit.

Cole Peterson, 35, of Wyoming, is one of 14 investors who filed a federal lawsuit against Morris over allegations of fraud. He was considering purchasing a second property through Morris in 2018 but grew concerned after rent checks from his first property stopped unexpectedly.

That’s when Morris surprised Peterson with a personal phone call.

“I was like, whoa!” Peterson said. “I was almost starstruck because I was like, oh my gosh, I’ve heard this voice so many times but never directed to me.”

Morris assured Peterson his questions about the missing rent payment would be addressed. It was enough, Peterson said, to persuade him to shell out $48,500 more for a second property. He would later discover it resembled a “crack house” more than the nicely renovated turnkey properties Morris featured in his videos.

The Morris sales pitch

In a video, Morris walks along a tree-lined street of neat homes touting how his company has helped hundreds of clients purchase “affordable rental properties with incredibly high returns.”

The promotional video, posted in September 2016 on YouTube, offers potential investors a way to avoid three big obstacles to real estate investing.

“My company, Morris Invest, takes care of all three of those headaches — finding, renovating, managing — for you so you don’t have to worry about a thing,” Morris says. “All you need to do is collect your monthly rent checks.”

He emphasizes the best rental properties may not be “in your backyard” but rather “out of state, many, many miles away.” He recommends markets in the Midwest, where low real estate prices can lead to bigger returns.

It was an attractive message to entry-level investors in places like California and the East Coast, where real estate prices are much higher. Morris even had a plan for how novice investors could finance their purchases: borrow from a retirement account.

“If you’ve been told you should under no circumstances touch your 401k, you’ve been lied to,” Morris said in a July 11 blog post. “That’s what makes my blood boil: innocent people being taken advantage of.”

Once an investor contacted Morris Invest, they were provided with opportunities to purchase “hot” properties, but they had to act quickly, according to lawsuits and emails provided to IndyStar. Deals were cash-only.

“You’re probably saying, where’s the catch, right?” Morris says in the 2016 video. “Well honestly, there is no catch.”

Many investors disagree. Morris and his company didn’t do the renovations. They didn’t sign up tenants. And they didn’t manage the properties.

In fact, Morris didn’t even own the properties he was pitching to investors.

Morris partner has checkered past

The properties Morris marketed in Indianapolis belonged to several limited liability companies tied to Whalen. The companies include Oceanpointe Investments and Indy Jax Properties.

Whalen appears to have partnered with Morris about five years ago. Morris needed homes to sell. Whalen had a lot. But it was an odd match. Morris’ squeaky-clean, family-man persona stood in stark contrast to Whalen’s checkered history.

It’s unclear how Morris and Whalen connected. It’s also unclear how much Morris knew about Whalen’s background or what due diligence he did before directing investors to Whalen.

Whalen, 44, was hit with a $744,000 judgment in 2011 over the sale of three homes to an investor. The court ruled Whalen had committed fraud in the deal. The following year, Whalen filed for bankruptcy, allowing him to escape millions of dollars in debt.

He was soon buying up cheap houses and selling them through Morris. In many cases, he also managed the properties after the sales, taking 10 percent off the top of any rent.

Investors say they had no idea Morris didn’t own the properties they bought, even though closing documents listed one of Whalen’s entities as the seller. Many say they assumed those were Morris’ companies.

In fact, when asked if he owned Oceanpointe, Morris said he did in a June 2017 email included in court documents.

“Yes sir we have many LLC’s that we use to hold acquisitions before rehab,” Morris wrote. “And that is just one of them we own.”

Berkshire, an attorney for investors, said: “Every single one of my clients believed 100 percent that they were dealing directly with Clayton Morris and that they were purchasing the properties from Clayton.”

Morris continued to handle investor questions and pitch more properties for months after the sales, leaving them with the impression that he was fully responsible for the deals, investors told IndyStar.

That is, until the complaints began to pile up.

‘The place was torched’

For three months, Danny Gomes had no idea his $52,500 investment with Morris had gone up in flames.

Gomes, 38, of Redding, Calif., dipped into his retirement funds last year to buy a property near Keystone and Troy avenues. He had recently adopted a child and hoped the rental would be a good investment for his growing family’s future.

He was wrong.

Four days after Morris signed a purchase agreement as the seller, the house was destroyed by fire.

Nobody told Gomes.

The sale closed four days later, and still Gomes was not made aware of the fire.

Gomes assumed his property was being rehabbed. When he emailed Morris Invest for an update, he received a reply from Linzi Del Conte, a Morris Invest transaction coordinator and Morris’ sister-in-law.

“We have our project manager in the field monitoring all job sites as well as our foreman and contractors,” she wrote. She projected that the work would be done within 90 days of the purchase and that “during that process we let the team work their magic.”

She did not mention anything about a fire. But she did attach an inspection report, with photos that pre-dated the fire, and a scope of work for rehab that did not include fire restoration.

Three months after purchasing the property, Gomes finally learned about the fire — but not from Morris or his team.

He received an order from the city to demolish the house. Confused, he called the city inspector.

“He sent me some pictures and sure enough, the place was torched,” Gomes said in an interview. “It was pretty darn shocking.”

A few days later, Gomes received another shock when he read an Indianapolis Fire Department report. The home had actually burned four days before the sale closed.

Now, Gomes said, Morris says he’s not responsible. He didn’t sell the property to Gomes. Even though Morris signed the purchase agreement, the seller was actually a company affiliated with Whalen.

Gomes said he never knew he was dealing with anyone but Morris. Now he is among the investors suing Morris.

He’s not the only investor who claims homes bought through Morris were not rehabbed as expected.

Lawsuit: A Ponzi scheme

In lawsuits and interviews with IndyStar, some investors say they received rent checks that they now suspect were part of a Ponzi scheme. Despite receiving monthly checks and copies of leases, they discovered their homes had been vacant for months.

First-time investor Brian Freeman purchased a house through Morris for $45,000 after watching about 20 of the celebrity’s online investing videos. As in most cases, part of the sale was supposed to cover the cost of renovations — about $5,000 in Freeman’s deal.

Initially, the California man thought things were going well with his long-distance investment. Then his insurance company canceled his policy and he started getting code violations from the city.

“That’s when I first started talking to Clayton Morris directly, saying, ‘Hey, what’s going on here? I keep getting cited that this property is uninhabitable and there’s all these problems.’ And he assured me, ‘Oh that’s normal, that’s just a money grab (by the city). We’ll take care of it.’”

The breaking point came when his rent check was late. Oceanpointe told him the tenant was gone.

“That’s when the city (inspector) made contact with me and told me that there was mold and rats and all these issues in this property that had been vacant for five months,” Freeman recalled.

“And I said, ‘What? I’ve been getting rent from Oceanpointe for the last five months! Are you serious? It’s been vacant?’ And he said, ‘Absolutely. We’ve had to change the locks, put boards on it. No one’s been there. And it’s a health hazard and you gotta take care of this.’”

Freeman asked Morris for an explanation but got none. After he threatened to sue, Freeman said Morris agreed to buy back the house but also wanted Freeman to sign a separate nondisclosure agreement that would prohibit Freeman from casting Morris or his company in a negative light. Freeman provided IndyStar with a copy of the agreements, both signed by Morris.

That was 10 months ago, the agreements have since expired, and Freeman said Morris never followed through. Freeman has since sold the house for a loss.

While Freeman never sued, others have. They include Peterson, the starstruck Wyoming investor.

Peterson purchased two houses through Morris Invest for $94,000. He took Morris’ advice and pulled $30,000 from his 401(k) to help finance the purchases. He also borrowed $40,000 from his mother, he said.

Around the time he bought his second house, Peterson said the rent checks for his first property suddenly stopped. That’s when he hired a new property management company to check out his properties and take photographs.

Peterson was horrified.

“The first property was never rented to anyone,” he said. “It didn’t even have a door on it. It had no front door! There was no carpet in the house. There were no signs of anyone living there at any time that I’ve had it.”

The discovery was particularly shocking because he had been provided with a signed lease for the property.

“So I basically have a copy of a fake lease with someone’s fake signature on it and I was getting paid money with no renter,” he said. “I think it was like a Ponzi scheme where they were taking money for renovations and then feeding it through so that people would feel like it was all working and then they’d be convinced to buy another one.”

As for the second house: “It made me sick when I got the pictures. Drywall is missing. I don’t think there are toilets in it. It looks like it was just raided and everything and anything was taken. It just looks like a crack house.”

Peterson is one of 14 investors who claim in a federal lawsuit that Morris and his company were involved in a Ponzi scheme.

Some who struck deals with Morris didn’t even end up with a home to show for their investments.

Empty lots instead of new homes

In two different lawsuits, investors claim they were sold vacant lots and a promise to build new rental homes on them. The cost: $68,500 each. But they never got their new homes.

In one of the lawsuits, Maryland investor Damien Robinson claims Morris sold him a lot on which a “fully constructed” home would be built. Property records show a company associated with Whalen bought the lot two months earlier from the county for $450.

The lawsuit claims Morris, his company, and Whalen’s company presented themselves as a team. The case is still pending in Marion Superior Court, where Morris has filed motions to dismiss.

A year and a half later, Robinson’s lot remains empty.

The only sign of work is a ditch outlining a foundation that was never poured and a pile of gravel. Instead of his new rental home, there are weeds, empty liquor bottles, beer cans, fast food wrappers, a used diaper and a faded yellow yard sign that says, “We buy houses. Cash! Fast close!”

Tenants in squalor

It wasn’t just investors who say they suffered from what they believe are Morris’ broken promises.

Some found they had unwittingly become slumlords.

Assuming Morris and his team had rehabbed the properties, they say they had no idea their tenants were living in squalid conditions.

That was the case with Mike Orbinpost, an investor living in South Korea. He purchased a home through Morris in December 2016 and paid $19,400 for rehab work that Morris’ company told him would be complete in six to eight weeks. Oceanpointe would serve as the property manager.

Raniesia Gentillion and her family began renting the house in June — more than two months after the rehab was supposed to be finished.

After moving in, they twice provided Oceanpointe with a list of maintenance problems. Many were never addressed, Gentillion said.

In October, as her frustration grew, Gentillion called the Marion County Health Department. An inspector found 23 violations, including a broken furnace, plumbing and water leaks, and crumbling ceilings.

Still, the problems persisted, Gentillion said. With no heat, the family sometimes stayed in a hotel. When they ran out of money, they slept in their van on the street with the engine running to stay warm, she said. Other times, they stayed on the floor or couch at a friend’s house.

They called Oceanpointe 26 times, Gentillion said, but the problems remained unfixed. They tried to stay warm with electric space heaters, but the cold was irrepressible. A pipe connected to the toilet froze and burst, spewing sewage into the kitchen. Sometimes the dog’s water froze solid.

Later that winter, Gentillion’s teenage son was sleeping in his bed when the family heard a loud thump and a scream. The ceiling had collapsed.

Her family was homeless for three weeks leading up to renting a home from Oceanpointe. She had to file 26 complaints to get the furnace fixed. Mykal McEldowney, IndyStar

“We could hear my son mumbling for help underneath all the rubble because the ceiling fell on him at 5 o’clock in the morning,” she said. “We had to take everything off of him so he could move.”

The heat was finally restored in January, but the stress had a profound effect on her daughter, Gentillion said. The teenager had become pregnant in October.

In February, Gentillion’s daughter gave premature birth to a baby girl.

“Exactly an hour after she was born, her little heartbeat stopped,” Gentillion said.

In a legal claim, the family blames the death on the deplorable conditions they endured in the home. The case is still pending in Marion Superior Court.

Emails show that Orbinpost knew nothing of the problems until a county health inspector told him his tenants had been without heat. Orbinpost emailed Morris to find out what was happening, noting he hadn’t received any rent money from the property.

Morris tried to reassure him.

“Mike we’ve had a lot of ‘no heat’ calls for maintenance because it suddenly went from 80 degrees to 30 degrees and then back up again,” Morris replied. “A lot of tenants hadn’t cycled their furnaces on so for a lot of them they simply need the pilot light relight (sic).”

When Orbinpost later obtained a full copy of the health department violations, which stretched over three pages, he asked Morris how a $19,400 renovation job could leave so many problems unaddressed.

“I could understand how some might argue that less than a handful of these MIGHT be issues caused by insufficient care by the tenant, but, it is obvious that this house still has serious structural issues,” Orbinpost wrote, demanding to know how Morris would address the problems.

That’s when Morris referred him to Whalen, who provided another excuse.

“Sorry Mike these people are fast to put this crap on us and slow to take it off,” Whalen wrote.

Owner: ‘I was embarrassed’

Orbinpost wasn’t the only investor surprised to learn about the poor conditions his tenants were living in.

Leach, the former Fox News junkie from Maryland, booked a flight to Indianapolis and contacted an independent property management company after growing concerned about the condition of the two properties he purchased through Morris.

What he found shocked him.

Both houses were in bad disrepair, lacking the kind of rehab work Morris touted in his videos. Moreover, what he had been told was a duplex turned out to be a triplex. He also learned after his new property manager obtained a copy of one tenant’s lease that the rent differed from what he had been receiving.

“It was just a mess,” he said.

But that wasn’t the worst part.

The tenants in the triplex were living without any running water or electricity, he said. He had been under the impression that tenants were responsible for utility payments but learned that Oceanpointe was responsible.

“There were huge electric bills and water bills that I had to make good on,” he said.

He felt horrible for the tenants. “I was embarrassed and felt bad as the owner when I found out what I owned,” he said. “That was never my intent.”

An errant email

Many investors, including Leach, had no idea how many people had problems with the properties they bought through Morris until last April.

That’s when they got an email saying a new property management company was taking over for Oceanpointe.

The email gave no reason for the sudden management change, but behind the scenes, Whalen had recently had his real estate license permanently revoked. That meant under Indiana law he could not work as a property manager.

The Indiana Real Estate Commission found Whalen failed to disclose five criminal convictions on his renewal application, including drunk driving and operating a motor boat while intoxicated. The commission also found he failed to deposit a $650 rent payment he collected for a property management client.

Even though many investors were unaware of Whalen’s situation, the email announcing a new property management company set off a furor because it was carbon copied to more than 200 investors with Morris.

For the first time, investors could share their horror stories with one another.

“This whole day has been us talking back and forth, sharing stories, comparing notes,” Son Doan, an investor from Boston, wrote on the real estate blog, the day the email went out. “Lots of people excited/relieved to have found others in the same boat.”

In a follow-up post, Doan described how hard it was to understand and accept what they had experienced: “Initially people were still saying things like it’s probably not a Ponzi scheme, Clayton probably doesn’t know anything about it, etc. etc. It took over 100 emails of us telling each other our investment stories for everyone to agree that we got screwed by (Morris Invest and Oceanpointe). Then we got emotional. Then we got to work.”

Soon complaints began to pour in.

There are now at least five pending lawsuits in Indiana, representing 19 buyers from 11 states. More than 50 investors have aired complaints on and at least 14 have lodged grievances with the Better Business Bureau, which gives Morris Invest an “F” rating. Others have turned to attorneys general in Indiana and New Jersey.

A spokeswoman for Indiana Attorney General Curtis Hill declined to comment, but the New Jersey attorney general’s office confirmed eight open complaints. “The general nature of the complaints include misrepresentation and deception,” spokeswoman Lisa Coryell said.

Faced with an avalanche of complaints, Morris tried to quell investor concerns. When that failed, he tried to shift blame to Whalen.

Finger pointing begins

Days after the mass email to investors, Morris issued a lengthy statement on his blog. The announcement of a new property manager was a mistake.

He said the email appeared to be “a premature announcement from an unsanctioned employee.”

“The poorly-worded grammar and the fact that it was not a blind copy seems to corroborate that story but we have only half the facts,” he said. “At Morris Invest, we are as perplexed by this as you are.”

Morris said his longstanding relationship with Oceanpointe would continue and even shared a statement from Whalen’s company.

“Due to blogs and many other naysayers and competitors that have been all over us we have lost employees and clients,” the statement said. “We have since replaced those employees and have people back out on the streets which is what makes us different…”

A week later, Morris made an abrupt about-face.

“Morris Invest has cut all ties with Oceanpointe,” he announced in a May 8 blog post.

He said Morris Invest had filed a complaint with the Indiana attorney general and emphasized that he had trusted Oceanpointe as “an ethical steward for property investment in Indianapolis.” In addition to referring clients to Oceanpointe, he and his family had also purchased homes through the company, he said.

Over the next few months, Morris continued to heap blame on Oceanpointe and Whalen. In a series of responses to Better Business Bureau complaints, Morris’ company denied selling the homes and any responsibility for their rehabilitation.

“When we represented this property to this investor, we believed the contractor would complete the rehab as promised,” Morris Invest said in a March 2019 response. “We had no idea this was fraudulent information.”

It’s a defense Morris and his attorneys are also using in court.

“Clayton Morris and Morris Invest were marketers and finders, connecting interested buyers to interested sellers and property managers,” his attorney argued in a Feb. 28 filing in a lawsuit pending in U.S. District Court for the Southern District of Indiana.

Morris was not an owner or member of Oceanpointe or its affiliated companies. It was “one of those entities was supposed to renovate the properties, but did not,” Morris and his company argue in the court filing.

Morris stopped referring clients to Oceanpointe and Indianapolis in May 2018.

As Morris tried to distance himself from the sales, Whalen defended himself in a June email to more than 200 investors. He accused Morris of “playing the victim which makes me sick.”

Whalen claimed he lost $2.5 million, while Morris earned $6,500 for each property sold, raking in $6 million.

“I’m still out here with MY phone on!! (sic) talking to hundreds of people selling everything I own to help anyone willing to work with me … ” Whalen wrote. “I didnt (sic) turn my phone off and hide behind my lawyers.”

When asked about his relationship with Morris, Whalen referred IndyStar to his lawyer.

Attorney John Tompkins said Whalen “did not do anything wrong” and met all requirements of his contracts.

‘You can’t have it both ways’

The finger-pointing between Morris and Whalen will likely have to be sorted out in court.

But the investors say they never would have been lured into the scheme if Morris hadn’t told them it was a good deal.

His company — and sometimes Morris personally — was the initial point of contact for investors. He signed many of the purchase agreements as the “seller.” And then there’s the email where Morris claimed to own Oceanpointe.

Even months after the sales, emails show Morris remained heavily involved, fielding investor questions and providing updates about renovations. And, investors say, there’s no reason he would offer to buy back a property if he wasn’t the one who sold it.

“You can’t have it both ways,” said James Piatt, an attorney for 14 investors who are suing Morris. “You can’t tell everybody you’re in control and then when the car goes off the rails say, ‘No, no, no, this other person was driving.’”

Freeman, the investor who said Morris reneged on a buyback offer, said the former TV host’s actions went beyond mere mistakes or negligence.

“He got in bed with a really bad organization,” he said. “He was receiving kickbacks from them to be the lipstick on the pig and sell their junk.”

Deals could haunt city

Many investors are still grappling with what to do with their broken down homes. Some have sold them for major losses. Others are trying to salvage their homes and investments, but it’s proving difficult.

In the meantime, nuisance fines and property taxes continue to pile up. Eventually, many of the homes may end up right back where they started: at county tax sales.

Berkshire, one of the attorneys representing investors, said the hundreds of properties sold through Morris could haunt the city for years.

“You’re going to have all these properties that are just going to get dumped back to the city and to the county,” she said, “because these investors, who already lost millions of dollars, are just going to walk away.”


The team of investment fraud lawyers at Starr Austen & Miller LLP fights for the protection of investors and handles cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence and breach of trust.