Real Estate Agencies

Four people tricked first-time homebuyers into making “donations” to their nonprofit housing organization, threatening to deny them houses if the buyers refused to contribute, the Palm Beach County State Attorney’s Office said today.

The “donations” ranged from $600 to $2,000. They were demanded from homebuyers who had little money, were ignorant about buying a home, were new to the area or struggled to speak English, a probable cause affidavit said.

Patricia Mullis Tracey, 65, of Jupiter; Nelson W. Kass, 66, of Wellington; Irma Monica Matthews, 43, of Port St. Lucie; and Georgina Cespedes-Rivera, 43, of Royal Palm Beach were arrested Friday for allegedly extorting thousands of dollars from more than 20 potential homebuyers, said the state attorney’s office, which conducted the investigation with the county Office of the Inspector General and the state Office of Financial Regulation.

The three are connected to Real Estate Education and Community Housing, or REACH, and Guardian Financial Network, or GFN.

REACH is a nonprofit that helps first-time homebuyers obtain grants from governments including Palm Beach County. GFN is a mortgage broker that sometimes helped REACH clients obtain financing to buy their houses. Both businesses are based out of neighboring offices at 8409 North Military Trail in Palm Beach Gardens.

“This matter involves the alleged targeting and exploitation of vulnerable homebuyers who were supposed to be helped in achieving the life’s dream of home ownership,” State Attorney Michael McAuliffe said. “The allegations reflect yet another example of alleged con artists using fraud and pressure to enrich themselves.”

If found guilty, Tracey faces up to 65 years in prison for numerous organized scheme to defraud, grand theft, and money laundering charges. Kass and Matthews face up to 10 years for grand theft and organized scheme to defraud charges if found guilty.

All four were booked into the Palm Beach County Jail on Friday. All but Cespedes-Rivera had bonded out by 11 p.m. One other suspects, Jon Williams, remain at large, the State Attorney’s Office said.

REACH is legally allowed to charge a $1,500 fee to each client who bought a house with grant funds it helps the client obtain. That charge had to be included in the buyer’s closing costs and listed on the statement the buyer receives from the federal Department of Housing and Urban Development.

REACH, however, did not disclose this charge in most cases, and it asked these homebuyers for “donations” of as much as $3,500, the affidavit said. It sometimes told clients it had lost its government funding and needed the “donations” to survive.

Sometimes it set unusually high closing costs – $6,000 on a $139,000 Royal Palm Beach home in one case – and said it would take the “donations” in lieu of paying them, the affidavit said.

In other cases, like that of a Spanish-speaking man who bought a home in Lake Worth, homebuyers were led to believe they wouldn’t get their houses if they didn’t pay it. Some buyers such as a Greenacres couple were told the seller would pay it, only to learn at the end they were stuck with the bill.

Tracey, who lives in Jupiter’s beachfront Ocean Walk community, is the principal owner of GFN and also sits on the board of REACH. She most often dealt with the clients asked to give “donations,” even to the point of sending them thank-you letters.

Investigators also found that Tracey was moving money among her personal bank account, a GFN account, and a REACH bank account giving herself more than $50,000 dollars, the affidavit says.

Matthews is a representative with GFN who also dealt with clients, often using the name Monica Matthews. Some clients, such as a West Palm Beach couple new to the country, refused chose to do business with Tracey instead of her, telling investigators that she was “rude” and “belligerent.” In another case, Matthews called a client after she heard the client was speaking with police and said she wanted to send them a Home Depot gift card to make sure “everything was OK,” according to the affidavit.

Kass is described in the affidavit as a loan officer. It recounts him telling a mother and daughter that they needed to pay a $1,615 “donation” – an amount he called a percentage of their loan – or they wouldn’t get their house. They gave Kass the “donation,” but they still have not closed on the house.