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Florida AG Busts Equity Skimming Scheme

TALLAHASSEE, FL – Attorney General Bill McCollum today filed a lawsuit against a Miami-Dade County business, its owners and several straw buyers for their participation in an equity skimming scheme that victimized at least 20 South Florida homeowners. Xolutex, Inc., and principals Ceasar F. Tavaras and George Ibanez are named in the lawsuit, which claims the equity losses as a result of the scheme exceeded $1.9 million.

The Attorney General’s Economic Crimes Division began investigating the company’s practices in December 2007 after receiving multiple consumer complaints. According to the lawsuit, the defendants allegedly sought homeowners who were in various stages of foreclosure proceedings and met with them under the guise of offering foreclosure rescue and credit counseling. Homeowners were then lured into the scheme where straw buyers would purchase the homes for inflated home prices, maximizing the money they could skim from the homeowners.

To facilitate the straw buyers’ ability to qualify for these loans, Xolutex and its principals allegedly helped falsify loan applications. Additionally, Tavaras and Ibanez allegedly convinced the homeowners to sign documents which caused virtually all of the equity in the homes to be paid to Xolutex.

The lawsuit seeks injunctive relief against Xolutex, its principals and straw buyers, prohibiting them from ever participating in any real estate, mortgage or credit counseling related business again. The Attorney General is also seeking full restitution on behalf of all victimized consumers, civil penalties of $10,000 for each violation of the Florida Unfair and Deceptive Trade Practices Act, and reimbursement for fees and costs related to the investigation.

A copy of the lawsuit is available online at: http://myfloridalegal.com/webfiles.nsf/WF/MRAY-7X3MUC/$file/XOLUTEXinjcom.pdf