Creative sentencing

January 17, 2014 3:23 PM

A serial house flipper would rather stay in prison. The judge said no, and put the city councilman whose ward he destroyed in charge of the flipper's parole. In addition to electronic monitoring, being forced to live in one of his own derelict properties and financial restitution, the flipper will give the city the equivalent of 18 months' full time work creating gardens and other features for the community at his own expense.
posted by bitter-girl.com (31 comments total)

There is a certain justice to the deal....

Although, I guess the court could trade him to another jurisdiction for some of their prisoners and try and turn a profit.
posted by GenjiandProust at 3:28 PM on January 17, 2014 [7 favorites]

According to prosecutors, Murphy's crimes involved buying hundreds of rundown homes sight-unseen from banks. Then, instead of fixing them up, he would sell, or "flip," them to another buyer at a profit.

In doing so, he would ignore code violations and fail to pay taxes. The homes would often sit vacant, costing the city money, contributing to neighborhood decay and acting as magnets for crime.

This is one of those situations where a small-scale entrepreneur is punished for doing something big companies do all the time. There is a reason for setting up a limited-liability corporation, and this is it.
posted by KokuRyu at 3:30 PM on January 17, 2014 [10 favorites]

There is a reason for setting up a limited-liability corporation, and this is it.

There's a reason why we as a society need to review the costs and benefits of allowing limited-liability corporations, and this is it.
posted by Jernau at 3:39 PM on January 17, 2014 [56 favorites]

while the bankers laugh...
posted by ennui.bz at 3:40 PM on January 17, 2014 [3 favorites]

I think it's a decent sentence, but as others alluded to, his real 'crime' is he thought too small.
If corporations are people then half the banking industry would be incarcerated. The real crime is owning a bank
posted by edgeways at 3:44 PM on January 17, 2014 [5 favorites]

Defense attorney Larry Zukerman argued strongly against the judge's requirement that Cleveland Councilman Tony Brancatelli act as his client's "de facto" probation officer.

This is absurd and probably open to a credible due process challenge.
posted by Inspector.Gadget at 3:46 PM on January 17, 2014 [3 favorites]

So, his crime was failing to fix up and pay taxes on the houses he bought?

Now that his reign of not-fixing-up and not-paying-taxes on the houses is over, are the houses fixed? Are the taxes being paid? Has anything changed, other than a bunch of politicians having a scapegoat for their crappy city?
posted by Hatashran at 3:46 PM on January 17, 2014 [4 favorites]

So, his crime was failing to fix up and pay taxes on the houses he bought?

Telecommunications Fraud and Tampering with Records.

Not really seeing him as the modern day Robin Hood you guys seem to see him as.
posted by Artw at 3:55 PM on January 17, 2014 [13 favorites]

something makes me think that a couple of people in here missed the presence of an actual link in this post.

According to TFA and the useful links in it, his actual crime was using aliases to do all the paperwork, including signing under one alias and witnessing himself under another, allegedly in order to avoid ever being tracked down by the city to pay the relevant taxes on the transactions and the fines for selling something out of code, etc.

Also from TFA, as part of the sentence he is paying about $1 million in taxes and fines, and a discussion of the probation that made up a significant portion of TFA mentions that he will be fixing up some houses.
posted by the agents of KAOS at 3:56 PM on January 17, 2014 [10 favorites]

Defense attorney Larry Zukerman

He's very good.
posted by jason_steakums at 4:07 PM on January 17, 2014 [20 favorites]

One of his crimes was selling 'out of code'. Why were the banks not obliged to fix the houses before selling them? Or alternatively, why was he not himself not allowed to transfer that obligation on in a similar manner?
posted by topynate at 4:09 PM on January 17, 2014 [1 favorite]

I read part of The Fucking Article, but they buried the good stuff (tampering, fraud) I guess.

So this isn't really a story about house flipping is it?
posted by KokuRyu at 4:10 PM on January 17, 2014

Defense attorney Larry Zukerman

I have the *worst* fucking attorneys.
posted by stenseng at 4:14 PM on January 17, 2014 [3 favorites]

So this isn't really a story about house flipping is it?

He appears to have bought and sold houses en masse, altering their records to make them appear more valuable, with the fallout that the surprise fixer-uppers get left to rot.

Though bits like this...

"He bought homes and sold homes with reckless abandon," Assistant Cuyahoga County Prosecutor Greg Mussman said. "And it was for greed."

...makes him sound like America circa 2001-2008.
posted by Artw at 4:17 PM on January 17, 2014 [3 favorites]

One of his crimes was selling 'out of code'. Why were the banks not obliged to fix the houses before selling them?

Presumably, the legal requirements for selling a house in foreclosure aren't the same as the normal legal requirements for selling the house. It's in the city's interest to have a house in foreclosure sold as quickly as possible to someone who's going to occupy it and maintain it. It's not in the city's interest for a vacant property to be passed around multiple times between absentee owners.
posted by Slothrup at 4:22 PM on January 17, 2014 [1 favorite]

One of the other problems is that so many foreclosed houses are sold "cash only" for one reason or another. A perfectly good house with no problems at all (example: the one next door to us) sits empty because no one is sitting on $50,000 in cash to buy it... unless they're a flipper like this guy.

Our neighborhood is *really* nice compared to the places he was operating here, yet I feel for the innocent people who are damaged because of what he did. I'm trying to refi our house. Never missed a payment. Great financials. Been living here 10 years. No one will touch it because the house next door's price has destroyed all the comps. People like us pay for the profits these guys realize. It affects more than just the 235 properties bought and sold.
posted by bitter-girl.com at 4:31 PM on January 17, 2014 [16 favorites]

So who was buying these houses and not doing anything with them, and are they on the hook for anything? (And why are they buying them in the first place?)

Sloppy reporting when a story raises more questions than it answers.
posted by IndigoJones at 5:13 PM on January 17, 2014 [1 favorite]

So this guy was the Wolf of Main Street?
posted by localroger at 5:18 PM on January 17, 2014 [3 favorites]

Sloppy journalism means they didn't even get in that joke.
posted by Artw at 5:32 PM on January 17, 2014

Though bits like this...

"He bought homes and sold homes with reckless abandon," Assistant Cuyahoga County Prosecutor Greg Mussman said. "And it was for greed."

...makes him sound like America circa 2001-2008.

I returned to Canada in 2004 and this sort of thing had already been going on here for a couple of years, making it impossible to buy a house.

And it's all people talked about here. Flipping houses. Buy a house, slap on some paint, flip it. Real estate and flipping continued to dominate casual BBQ conversations here until around 2009.
posted by KokuRyu at 5:39 PM on January 17, 2014 [1 favorite]

Idea: flip "haunted" houses with phony exorcisms
posted by jason_steakums at 5:49 PM on January 17, 2014 [3 favorites]

topynate: "One of his crimes was selling 'out of code'. Why were the banks not obliged to fix the houses before selling them? Or alternatively, why was he not himself not allowed to transfer that obligation on in a similar manner?"

I'm no fan of banks' mortgage practices, but (as a member of a property tax levying local government body), banks typically pay their property taxes on foreclosed properties and generally obey local government orders to keep the utilities on the properties in reasonable repair and the lawn mowed and whatnot. The houses themselves deteriorate, but you don't have exploding water pipes.

When banks (and legit sellers) sell under-code properties, they either sell them with a disclosure of the code violations or with a release (that the buyer signs) that the bank has never inspected the property and is unaware of its upkeep. You can sell your personal home with known code violations as long as the buyer is informed and signs off. (This is part of the reason that regular people buying foreclosures need good guidance on the process, because the buyer doesn't have the same standard protections you get in most home real estate contracts.) I'm sure this dude was not doing disclosures.
posted by Eyebrows McGee at 5:49 PM on January 17, 2014 [3 favorites]

Seems like a good argument for eminent domain, along with locking up this clown.
posted by Blazecock Pileon at 5:54 PM on January 17, 2014

Wasn’t this the plot of a Jon Lovitz movie?
posted by El Mariachi at 8:15 PM on January 17, 2014

He may have been flipping houses, but this guy is a fucking slum lord only he didn't rent, just forged papers and passed on crappy houses and expense to people who couldn't afford the repairs. Fuck him.
posted by Catblack at 12:04 AM on January 18, 2014

What I don't get is, if the flipper really would rather stay in prison, why not plain refuse to do any of the parole stuff and ... tada?
posted by ZeroAmbition at 1:39 AM on January 18, 2014

Wasn’t this the plot of a Jon Lovitz movie?

Joe Pesci.
posted by Bunny Ultramod at 7:48 AM on January 18, 2014 [1 favorite]

What I don't get is, if the flipper really would rather stay in prison, why not plain refuse to do any of the parole stuff and ... tada?

I'm totally Not A Lawyer, but I would think that would count as some kind of parole violation or contempt of court or something and would probably result in additional jail time & fines.

Also, on re-read of the article, I just noticed: "Murphy still has a 10-year prison term hanging over his head should he violate his probation."
posted by soundguy99 at 8:34 AM on January 18, 2014 [1 favorite]

So, he's played Monopoly.
posted by DevilsAdvocate at 12:57 PM on January 18, 2014 [1 favorite]

In summer 2007, I interned at the CDC (community development corp.) in Slavic Village, the Cleveland neighborhood that has been the most dramatically affected by the housing bubble and mortgage collapse in the Cleveland area (and perhaps all of America, it has been profiled multiple times as the epicenter of the foreclosure crisis) where he was sentenced to work.
Tony was the councilman in SV also back then and thanks to some gerrymandering at the end of last year, he's also now my councilman. I still drive through there occasionally for work and it's still not any better than it was.

Even if Blaine does the work to take care of them, very few people will buy them, they're a glut of them on the market, and anyone who could afford to buy them would buy elsewhere.

I'm looking for my own apartment right now even for $450/month, I wouldn't rent there.(Cleveland is extremely affordable and I would rather pay the extra $50/month to live in a better neighborhood or Lakewood).

Eyebrows McGee
I'm no fan of banks' mortgage practices, but (as a member of a property tax levying local government body), banks typically pay their property taxes on foreclosed properties and generally obey local government orders to keep the utilities on the properties in reasonable repair and the lawn mowed and whatnot. The houses themselves deteriorate, but you don't have exploding water pipes.

Back then in Slavic Village, some of these properties were in various stages of foreclosure and my co-worker was trying to track down which banks/companies owned them (and were responsible for such upkeep). Once finding a phone number for the mortgage owner, the lenders would evade ownership, saying that they were no longer the owner of the property, the mortgage had been sold to someone else, or say that it's not their responsibility yet, the owner still owned it, or the property had be resold/flipped to a new investor, repeat. Meanwhile, these properties were having their siding or copper stripped and not being taken care of.

There were some that were receptive and did upkeep - but only the bare minimum (mowing lawns and securing the property) but it still would have its siding stripped or would be vandalized [windows broken, spray-painting], the bank would only do the bare minimum (boarding the house) and cutting their losses.

.....I'm sure this dude was not doing disclosures."

Regarding the disclosures... One Saturday morning, Tony and the CDC asked me to go to a hotel by the airport because a shady firm was running an auction for houses (in Slavic Village and around the city) to flip. I don't specifically recall whether they were not giving any disclosures or wrapping it in very small print in legalese. Anyways, it was 07, just as the housing market began to fall, so there were still a bunch of investors and people milling about. Before the auction began, lists of properties had been circulated around to attendees, I was passing out lists of properties in the area that were already condemned (slated to be demolished) or in disrepair, had code violations against them, and not taken of. After a few minutes, I was kicked out.
posted by fizzix at 1:21 PM on January 18, 2014 [4 favorites]

Presumably, the legal requirements for selling a house in foreclosure aren't the same as the normal legal requirements for selling the house.

So, one law for bankers, another law for everyone else, still sounds like what I'm seeing.
posted by corb at 5:23 AM on January 22, 2014