State busts scheme to inflate condo prices

A real estate fraud ring at a high-rise condo building in Palatine has been shut down, a state agency announced Friday.

Officials from the Illinois Department of Financial and Professional Regulation say One Renaissance Place was the target of a real estate "flipping" scheme involving 13 condos in the building.

Of the units under investigation, nine are in foreclosure, officials said.

State officials say a Chicago woman, Radostina Todorova, a real estate broker and loan officer, was at the center of the scheme.

Officials said the scheme was uncovered when the building's property manager, Phyllis Peters, filed a complaint with the Mortgage Fraud Task Force in May.

Peters could not be reached for comment Friday, but state authorities said she told them she became suspicious after seeing a similar story about a mortgage-flipping scheme in a south Chicago neighborhood.

The Palatine scheme is the second major flipping bust in the state.

"This is a really big deal because families are struggling right now with property values," said Sue Hofer, spokeswoman for the agency.

The Palatine units in question were bought and sold multiple times, often at highly inflated prices, officials say.

The average two-bedroom unit in the complex sells for about $250,000. The suspect units sold by Todorova averaged $350,000, state authorities said.

Additionally, the new owners never moved into some of the units, so no assessments were paid, and in some cases only a few months later the building was notified that the units were in foreclosure.

Authorities said Peters told them she noticed there was a lot of activity on 10 or 15 of the units. Her office would get the paperwork saying a sale was in progress, but would never see the new owner.

Paperwork would be picked up by Todorova, who'd say the owner wasn't in town, officials said. In some of the cases the new owner never took occupancy of the unit, Peters reportedly said.

The case has been forwarded to federal authorities.

Todorova acted as the real estate agent and also served as the loan originator for some of the nine units in the building in foreclosure, state authorities said.

Her real estate and loan agent's licenses have been revoked. She worked as a loan originator for Charter Funding, based in Arizona, which has been fined $10,000.

A person who answered the phone at a number listed for Charter in Arizona said the company has gone bankrupt and laid off all its employees.

Todorova could not be reached for comment.

Another loan officer who officials said worked with Todorova, Brian Angarone of Arlington Heights, has been suspended for 60 days and fined $5,000 for filing the loan documents prepared by Todorova without verifying that the information was accurate, officials said.

Angarone worked for NewCastle Home Loans, LLC, in Chicago, which was fined $10,000.

A formal complaint has also been filed against two appraisers, Michele Beymer of Lake in the Hills and Paul Adams of Huntley.

The complaint alleges Beymer prepared inflated appraisal reports for two condo units and that Adams failed as a supervisor and didn't cooperate with the investigation.

No one could be reached at NewCastle late Friday and no listed number was found for Angarone, Beymer or Adams.

"There are legitimate flippers who buy properties for investments and sell it when they've got a need for the money," Hofer said. "On the other hand, what frequently happens is that properties are bought and sold using phony appraisal information."

How to help protect yourself

• Check out current license standings of real estate and mortgage brokers at www.idfpr.com.

• File a complaint if something is fishy.

• Recognize what you can afford and look at nearby properties to make sure the value is right. If it sounds too good to be true in this real estate market, it probably is.

• Contact the Illinois Department of Financial and Professional Regulation with any questions. Go to idfpr.com.