A Melbourne man has pleaded guilty to operating an illegal real estate short sale flipping business, using tactics that made homes appear to be in poor condition, such as adding foul smells.
Guerard Wallace Howard, 63, faces a maximum penalty of 20 years in federal prison for wire fraud after operating Provincial Real Estate Administrative Services, Inc. while using short sale tactics, according to the plea agreement.
Howard made properties appear to be in poor condition during appraisals through reverse staging scheme, which is done in an effort to acquire the property at below market price.
Howard is accused of removing receptacle plates and pulling wires from walls to falsely represent that the house needed electrical service upgrades and repairs. Howard would also spray the house with a foul-smelling prank product, saying the odor was due to mold or other potential bio-hazard issues that required expensive remediation costs, officials said. The property was then immediately resold at a profit.
In addition to reverse staging, Howard engaged in an illegal scheme known as commission shifting, whereby realtor commissions were paid as part of the short sale transaction. This resulted in a higher profit to Howard to the detriment of the short sale lender.
Howard illegally obtained $219,414.52 during the short sale flipping of 13 properties in Brevard County, according to officials.
This case was investigated by the Federal Bureau of Investigation.