San Antonio Express-News (Sunday)
MOBILE HOMES
Boram Shin, 32, a Honolulu office assistant, said a friend referred her to Santos Kidd, a financial adviser pitching investment opportunities with ORES. Kidd gave her a PowerPoint presentation over dinner.
“Whatever spell he had, I fell into,” Shin said.
She invested $20,000 with the expectation of quarterly payments of $1,500 over five years, for a total of $30,000. She’s received only $500. The investment represented half of her savings.
Shin has spoken with eight other people in Hawaii who loaned money to ORES. Collectively, they invested almost $1.2 million with the company. Some took out home equity lines of credit while others pulled money from their retirement accounts to invest, she said.
“I should not have let my emotions from Santos’ presentation sway my decision so quickly,” Shin said. “I should have given it a few days to think about it.”
For his part, Kidd said he checked out ORES by flying to Texas to see for himself that everything Van Gundy was doing “was real and not a scam.”
“I saw the mobile home, I saw the office, I saw the people,” he said, adding he didn’t personally invest.
He was duped just like the investors, he said. Van Gundy has cost him clients and significant business. In a letter to her, he said he recounted “how much he hated her and what she’s done to me and my family and my clients, and how she ruined my whole life.”
On Tuesday, Kidd and his firm were named in the Comal County lawsuit by a California investor who has intervened in the case. The investor says he’s received only $25,000 on his $100,000 investment. The investor had traveled to San Antonio to attend an investment
seminar led by Van Gundy and Kidd in 2020.
“Kidd repeatedly extolled the financial prowess of Van Gundy and how lucrative investing with Outstanding Real Estate Solutions would be,” the investor alleged. Attendees were told investing with ORES was “low risk” and “easy money.”
Fighting back
Other investor lawsuits against Van Gundy and/or ORES are pending in Comal County, as well as in Dallas County District Court and in Georgia federal court. The Georgia case also names Trofimoff and GMHI as defendants. The claims vary but include fraud, civil conspiracy to defraud and breach of loan agreements.
Van Gundy and ORES raise a couple of defenses in asking the courts to dismiss the suits. They say they weren’t able to perform under the agreements because of COVID-19 and a national moratorium on evictions.
Their “inability to claim rent
from eviction-immune tenants severely compromised (their) income receipts, making it impossible and/or impracticable for the defendants to generate sufficient income to cover business expenses,” they responded.
ORES has provided owner financing for low-income buyers and those with poor credit. But it’s not clear why the eviction moratorium would affect the part of ORES’ business that borrowed money to buy and sell mobile homes.
Van Gundy and ORES also argue they’re not liable for breaching the promissory notes because the interest rates they agreed to pay investors — as much as 100 percent — were usurious as defined by the Texas Finance Code.
“It’s certainly possible that ORES deliberately offered interest in excess of the legal rate in order to entice the investments but have a defense later if they failed to pay,” said David Jed Williams, an attorney for the group of plaintiffs — five individuals and two companies
based in California — that sought the appointment of a receiver.
The plaintiffs are not seeking to recover interest in excess of the legal rate, Williams added.
Those plaintiffs accuse Van Gundy, Trofimoff and their firms of using investors’ money to “repay other investors in their Ponzi scheme, pay their own bills, (invest) in real estate or other assets, and/or enrich themselves and others.”
They collectively invested $850,000. They allege Van Gundy has been converting her assets into cash, which “strongly suggest(s) that she is attempting to remove or dispose of any property in this state that might otherwise be available to her victims.”
She had put her New Braunfels home on the market with an asking price of $1.5 million. That led the California plaintiffs to file a lis pendens — or notice of suit — to put a cloud on the title and effectively stop any sale.
In March, Love and Light Outreach, a Washington state
nonprofit established by Van Gundy, lost an 80-acre ranch at 814 Hueco Springs Loop Road in New Braunfels at a foreclosure auction. The property secured a note for about $2.7 million. The organization was formed in October 2019 to “promote Christian doctrines,” but watchdog organizations that track nonprofits have found no tax returns on file for it.
Morris, the lawyer for Van Gundy and ORES, called Meagan Dockens, ORES’ director of operations, to testify in an effort to fight the receivership application. She said she had never heard Van Gundy say she was partners with Trofimoff or his company.
Under cross-examination by Williams, Dockens said ORES had no current accounting records and she didn’t know where ORES had bank accounts.
After her testimony, Judge Dib Waldrip said, “Everything I’ve heard is like the arrow is now with neon lights” for the appointment of a receiver over ORES and Van Gundy.
Waldrip signed an order appointing certified public accountant Charles H. Adams of New Braunfels to take possession of all of Van Gundy’s and ORES’ property — save for exempt property such as her home and any retirement accounts — and financial records.
Van Gundy and ORES had five days to turn over to Adams all funds on deposit with financial institutions, as well as tax returns for the last three years.
Adams declined to comment on whether Van Gundy and Ores had complied.
Morris also had no comment after the hearing. On Wednesday, after Van Gundy’s bankruptcy filing, he moved to withdraw as their attorney. With the appointment of the receiver, the lawyer said in a court filing it “would be unethical” for him to continue to represent Van Gundy and ORES because their interests “may prove adverse.”