Landamerica 1031 exchange services inc liquidating trust
While I'm not sure if Land Am is a Bernie Madoff, there are certainly questions surrounding Land Am's last days.Richmond Biz Sense has done a pretty thorough job of covering the mess from lawyer fee drama to the accusations of Ponzi scheming from Land Am exchangers.Richmond Times-Dispatch: Like others who deposited money with Land America, he believes the company took his money even when its executives knew it couldn't repay it. Tracy Ralphs said the Land America official who took his deposit told him on the day the Glen Allen firm filed for bankruptcy that one senior Land America official knew as early as June that "this whole thing was going to blow up." "It was just a Ponzi scheme," said Paul Busse, whose wife deposited money with Land America in August 2008. , and The Good, Bad, and Less Bad for Richmond Fed."They were using money like my wife's to repay other investors." Bankruptcies are never pretty but this one is special because it is a reflection of our tumultuous times; poor investment choices, floundering companies, and of course to make matters worse, Land Am's general counsel - who signed off on said bankruptcy lawyer fees numbering in the millions - is now working as General Counsel for the Federal Reserve Bank of Richmond. The question of whether these funds were held in trust as Land Am exchange victims claim or freely pooled into a common account and reinvested without client knowledge is yet one more point to be hammered out after bankruptcy court.
Banks like Bear Stearns, Bank of America, Citigroup, and Morgan Stanley couldn't get enough of these securitizations and companies like Land Am were more than happy to keep the financial crack coming.
Land America subsidiaries also provided mortgage origination and refinancing services, REO management, valuation, foreclosure, and bankruptcy services and lien reconveyance, and real estate tax services.
I'm here to tell you the tale of mortgage bundling, 1031 exchanges, and towards the end abject failure that may or may not turn out to be absolutely bone-headed, if not downright criminal.
You can also see Land Am CEO Ted Chandler begging Hank Paulson for a piece of the bailout pie to save his tail, a request which was promptly denied and left Land Am in the lurch.
When the ARS market froze in February of 2008, Land America should have done the right thing and protected 1031 exchange funds as it was entrusted to do but instead used new client money to pay off current clients. Due diligence being what it is, I don't quite see why Fidelity would choose to pay twice as much for Land Am's good bits than it would have for the whole shebang unless, of course, Fidelity saw what Land Am exchange victims didn't.