COMPENSATE SH SOME PASSENGER
WHOSE GET BUMPED.
YOU CAN LEARN MORE AT
WCCO.COM/LINKS.
DAYINIZE TO BUYING THEIR
DREAM HOME-- DAYS INTO BUYING
THEIR DREAM HOME, A COUPLE
DISCOVERED THEIR WORST
NIGHTMARE.
IT WAS CLEAR THAT, YOU KNOW,
WE HAD BEEN TRICKED.
JOHN AND HIS PARTNER BOUGHT
THIS NEWLY RENOVATED HOUSE FROM
A FLIPPER IN SOUTH MINNEAPOLIS
LAST YEAR.
BUT THEY HAD NO IDEA ABOUT THE
SELLER'S HISTORY OF FRAUD.
TONIGHT, WCCO'S LIZ COLLIN
INVESTIGATES ALLEGATION THE
FLIPPER COVERED UP TROUBLE WITH
DRY WALL AND MISSING PAPERWORK.
SEEMED LIKE THE PERFECT
HOUSE.
Reporter: THAT HOUSE ALONG
13th AVENUE SOUTH NEAR THE LAKE
FIT THEIR WISH LIST, FOUR BED,
THREE BATH, FENCED YARD TO
FOSTER DOGS AND MOVE-IN READY
WITH NEW FINISHES THROUGHOUT.
THIS IS DEFINITELY THE HOUSE
WE WANT TO MAKE AN OFFER ON.
Reporter: JOHN AND HIS
PARTNER OFFERED $10,000 MORE
THAN ASKING LAST SUMMER TO GET
THE DEAL DONE, BUT A ONCE
$360,000 ARAISEAL THON REMODELED
HOUSE FELL TO $120,000 IN A
MATTER OF 7 MONTHS.
WHAT IS THE WORST THING YOU
AIMAGEEN HAPPENING?
Reporter: FORCED TO RIP UP
1/3 OF THE FINISHED SPACE.
FOUR DAYS AFTER MOVING IN, THEY
WATCHED A MINOR RAIN STORM...
EVERY SIDE OF THE DRY WALL IN
HERE IT WAS BLACK MOLD.
Reporter:...
MAKE ITS WAY TO
THE BASEMENT.
WE DIDN'T REALIZE HOW BIG THE
PROBLEM WAS.
Reporter: THEY WOULD FIND
MOLD ON EVERY SIDE OF THE HOUSE
AND LEARN THE FLIPPERS HAD
HIDDEN COUNTLESS CRACKS.
FOR MONTHS THEY WORE MASKS WHEN
THEY WENT DOWNSTAIRS.
SEPARATED WITH PLASTIC SHEETS
FROM THE REST OF THE HOUSE.
IT TOOK A BIT TO FIGURE WHAT
TO DO.
Reporter: BEYOND THE WATER
PROBLEM, HE WOULD COME TO FIND
OUT PERMITS WEREN'T PULLED FOR
ANY OF THE PLUMBING OR
ELECTRICAL WORK EITHER.
THEY DID ALL THE ISWITH WORK,
ADDED THE BATHROOM AND THERE
WERE NO PERMITS PULLED.
Reporter: THEY BOUGHT THE
HOUSE FROM A MAN AND WOMAN WHO
SAID THEY LIVED THERE AND DID
THE WORK.
THEY FORMED A COMPANY TWO OTHER
BUSINESSES UNDER THE NAME ACE OF
SPACES.
ONE DAY AFTER DISCOVERING THE
WATER, THE SELLERS DISSOLVED THE
COMPANY WITHIN A WEEK OF THE
FINAL SALE.
IT WAS CLEAR THAT, YOU KNOW,
WE HAD BEEN TRICKED.
Reporter: JOE IS ONE OF THE
SELLERS AND THE GUY WHO TOLD
CAUSELIC HE DID THE WORK.
WCCO FOUND HE HAS A LONG HISTORY
OF FRAUD.
IN 2004 HE WAS CHARGED WITH
MAKING $1 MILLION SELLING
COUNTERFEIT SUNGLASSES ONLINE.
LAST YEAR FACED CHARGES AS PART
OF A MULTIMILLION DOLLAR CELL
PHONE TRAFFICKING RING.
WESH WENT TO PRISON FOR
THAT CRIME AFTER FLIPPING THE
HOUSE.
I TRUSTED THE SYSTEM.
Reporter: WITH LITTLE
PAPERWORK TO POINT TO POTENTIAL
PROBLEMS, A HOME INSPECTOR
DIDN'T FIND ANYTHING SERIOUS
BEFORE THE SALE.
AND THE SELLERS DISCLOSURE FORM
DIDN'T MENTION ALL OF THE WORK
THAT HAD REALLY BEEN DONE.
IN MINNESOTA YOU HAVE TO
DISCLOSE ANYTHING THAT YOU KNOW
WOULD BE AFFECTING THE LIFE OR
ENJOYABILITY OF A PROPERTY.
Reporter: NICHOLAS MONTGOMERY
OWNS ADVICE HOMES REAL ESTATE,
HE HAS NOTHING TO DO WITH THIS
CASE BUT HE DOES RECOMMEND
PAYING CLOSE ATTENTION TO
PERMITS ON FLIPPED PROPERTY.
THEY ARE ON RECORD AT EVERY
CITY.
THEY ARE BUYING A HOME, THEY
ARE FIXING IT UP.
CLEARLY THEY HAVE DONE WORK.
SO IF THERE IS NO PERMITS
PULLED, THAT IS DEFINITELY ARE
RED FLAG.
Reporter: MONTGOMERY SAID IT
IS OKAY TO ASK FOR COPIES OF
CONTRACTOR RECEIPTS, A REQUEST
YOU CAN INCLUDE IN THE PURCHASE
AGREEMENT.
TO PROTEST YOUR INTEREST,
YOUR REALTOR SHOULD TRY TO DO
THEIR BEST TO ASK FOR WHAT WILL
PROTECT YOU.
Reporter: AS JOHN WOULD
LUNCH, PROTECTION CAN BE TOUGH
TO COME BY-- LEARN, PROTECTION
COULD BE TOUGH TO COME BY,
FORECLOSING WOULD HURT HIS
CREDIT FOR YEARS TO COME.
THEY ARE IN THE MIDDLE OF
ARBITRATION, A LEGAL PROCEEDING
WHERE A PROFESSIONAL REVIEWS TO
SEE IF PROD OCCURRED.
WE DON'T KNOW HOW LONG IT
WILL TAKE.
Reporter: HE KNOWS HE WILL DO
THINGS DIFFERENTLY SHOULD THEY
AFFORD TO START OVER AT A NEW
ADDRESS AGAIN.
LIZ COLLIN, WCCO NEWS.
THE ATTORNEY REPRESENTING JOE
WERB AND ONE-TIME BUSINESS
PARTNERS WOULDN'T COMMENT
BECAUSE OF ONGOING ARBITRATION.
IT IS RECOMMENDD TO DO A
CRIMINAL BACKGROUND CHECK BEFORE
BUYING FROM A FLIPPER AND
CHECKING ON CONTRACTORS
WORKINGEN ON YOUR HOME.