Complaint Review: Bryan Campo - Internet

My name is Bryan Campo, and I am one of the two principals of Redtec Solutions. We are the premier residential cost segregation company in the United States. Cost segregation is a way to itemize the standard depreciation deduction on residential rental properties to create additional write-offs for tax purposes. We also perform investment tax strategy consultation for individuals and companies owning residential rental properties.

We, being active real estate investors, developed a personal interest in the GO Zone because of the favorable tax advantages for real estate professionals. In early 2008, We were contacted by a developer, Leslie Younger of Global Community Development, to perform cost segregation studies on several duplexes that had recently been constructed in the Gulfport/Biloxi region of Mississippi. While we were in Mississippi completing these cost segregation studies, we also performed a preliminary market analysis across the entire region and came to the conclusion that Global Community Development had the best product with the most favorable prices/terms (including a private financing solution that she claims she used for the units that were already constructed). Unfortunately, her product was not in the most desirable location (Bayside Park).

We approached Leslie to see if she would be willing to construct units for us personally in a more favorable location. She agreed to build a separate subdivision that was of a higher quality and had more amenities, if we had enough collective demand to purchase a large enough piece of the subdivision. A few of the investors in our sphere of influence, when they learned about the tremendous GO Zone tax benefits and favorable private financing terms, became interested in learning more about what we found in Mississippi. We put a presentation together outlining what we had found and showed this to every investor that ultimately decided to purchase one or more units. The second slide of the presentation was a disclaimer slide that outlined many disclaimers, a few of which included:

Buyers are responsible for conducting their own diligence and may not rely solely on the information herein.

Use of GO ZONE bonus depreciation and/or cost segregation studies will vary depending on each buyers individual circumstances. Consult with your tax advisor. Nothing in this document may be relied upon as tax advice and no statements herein are made for the purpose of tax evasion.

All information in this document regarding government programs, market demographics, market economics, and future expectations is from third-party sources and has not been independently verified.

Upon reviewing the information provided in the presentation and before signing any contracts with Leslie, several investors flew to Mississippi and met with Leslie to perform their own due diligence. Based on the accusatory nature of this report, it is evident this investor never took the time to perform his own independent due diligence, despite the disclaimers page in the presentation and the fact that all investors had to sign a disclaimer page in the contract that read as follows:

Buyer understands and acknowledges that:

REDTEC SOLUTIONS, LLC (hereafter referred to as REDTEC) and/or their AFFILIATES are not parties to the real estate purchase transaction between Buyer and Developer;

REDTEC and/or their AFFILIATES are not employees, affiliates or representatives of, or in any other manner affiliated with, the Developer from which Buyer is purchasing real estate property;

REDTEC and/or their AFFILIATES may have performed preliminary market analysis. Buyer is nevertheless advised to conduct an independent market analysis in conjunction with REDTEC, their AFFILIATES, or Developer before deciding to purchase any real estate property;

REDTEC and/or their AFFILIATES may have made representations to Buyer regarding the suitability or viability of the Project for investment purposes. Buyer is advised to conduct an independent investigation of the facts contained in those representations before deciding to purchase any real estate property;

REDTEC and/or their AFFILIATES may have made representations regarding the anticipated income stream or return on investment, if any, relating to the Project. Buyer should conduct an independent investigation and analysis of the anticipated income stream before deciding to purchase any real estate property;

Buyer may have been provided with potential or projected rental income information from Developer, or its leasing or management company, relating to properties located in the same or substantially similar geographical area and market conditions; nevertheless. Buyer should conduct an independent investigation and due diligence regarding any potential or projected rental income if applicable;

REDTEC and/or their AFFILIATES do not and cannot make any representations or guarantees regarding date(s) of completion for the Project, or whether the Project will be completed by the date specified by the Developer;

Buyer is receiving a discounted purchase price from Developer. The discounted purchase price is made available to buyers referred to Developer by an AFFILIATE of REDTEC;

Bryan Campo, an owner of REDTEC, is a licensed real estate agent in the state of AZ, but is not in any way representing the Buyer in this transaction.

REDTEC and/or their AFFILIATES do not and cannot make any guarantee regarding any loan program, or the terms and conditions relating to any loan program, that may or may not be available to Buyer;

Any representations made to Buyer by the Developer, and/or its affiliates and representatives, are solely the representations of the Developer and not of REDTEC and/or their AFFILIATES. Buyer should conduct his/her own due diligence to verify the information provided to Buyer by Developer;

REDTEC and/or their AFFILIATES is not in any manner endorsing or sponsoring the Project or any activities of Developer in the promotion or sale of the real estate property(s) in the Project.

Between our personal appetite for rental properties in the GO Zone, as well as that of other investors in our sphere of influence, Leslie secured the land for the more desirable subdivision and began the process of getting the site plan approved with the county. Leslie had all investors sign contracts (including the disclaimer above and an escrow release form that was supposed to transfer the downpayment into an attorney escrow company in NY, NOT to the lender as was mentioned in the original complaint) and place their funds into escrow.

After the contracts were signed and funds were placed in escrow, several county hurdles were encountered with the site plan approval in the more desirable subdivision, and Leslie hit a point where she couldnt guarantee that construction would be completed in this more desirable subdivision before the end of 2008 to take advantage of the tax benefits for 2008. Leslie offered anybody who absolutely needed their units to complete construction before the end of 2008 for tax purposes the opportunity to switch from our subdivision to Bayside Park with the same terms and conditions. Each investor had different personal circumstances that led to their decision of where to purchase, and how many units to purchase. A couple of people qualified as real estate professionals (from an IRS perspective) in 2008 but were concerned that they might not qualify in 2009. Others had a substantial tax problem in 2008 and needed a solution to mitigate their 2008 taxes. When all was said and done, most of the investors (including us) remained with the more desirable subdivision and were willing to wait for county approval, while 5 investors switched to Bayside Park, hoping that Leslie would honor her word of completing these units before the end of 2008. In December of 2008, Leslie hit an impasse with the Hancock Board of Supervisors while trying to get site plan approval for the more desirable subdivision, and decided to offer a new subdivision in Gulfport instead for all investors that had originally put money in escrow for the more favorable subdivision. Since this new Gulfport subdivision was going to take months before it was ready to be offered for sale, she requested a refund from the escrow attorney in NY for all investor proceeds that were intended to be down payment money for the more desirable subdivision. This left all investors who chose to stick around for the Gulfport subdivision with $3,525/unit in her escrow company as a deposit (or at least that is what she led everybody to believe). Since this refund was received, as well as the fact that there had already been units built that several investors witnessed themselves when performing their own due diligence, there was no reason at the time to think anything fraudulent was going on.

Meanwhile, in Bayside Park, these investors had their full $30,725/property deposits still in escrow because they were being told by Leslie that their closing would happen any day now. Despite promises by her that these closings were going to happen, it has now become evident that the funds are not in the NY attorney (Michael Garber) escrow accounts where they should be. If you Google Leslie Younger, Michael Garber, and/or Bill Lange (the original private financier), you can pull up several discussion boards of people that were also duped by them in this investment opportunity. While we all appear to have been duped, other web forums suggest that the amount of fraud that Global Community Development was involved in far exceeds the collective vested interest of us and other investors involved (which is only about half of what was quoted in the initial complaint). Redtec has gone out of its way and tirelessly orchestrated conference calls for investors with private investigators, attorneys, escrow accountants, State Agencies, and Leslie (before she cut off all communications). Redtec will continue to stay involved and gather possible recourse alternatives for us as well as all investors affected by this.

In summary, we are all owed money by Global Community Development. Contrary to the initial complaint, the total potential loss in question for us and all investors we personally know is around half of what was quoted. Also contrary to the initial complaint, there is only one investor in AZ that chose to invest in Bayside Park and has his full downpayment in limbo. There are 4 other investors who also chose to invest in Bayside Park and have their full downpayments in limbo, but none of them live in AZ. The balance of the investors have deposit money ($3,525/unit) in limbo for the Gulfport subdivision that never materialized. From what we are being told, there are multiple firms investigating the money trail from the lender's attorney to see if these funds are recoverable. It has also been suggested that there may be escrow recovery funds potentially available to make investors whole, although this hasn't been confirmed. We realize that while may be a lengthy (and potentially fruitless) process, we are committed to following through on all leads to determine if there is a path to recover some, if not all of the deposits. If this particular investor had an issue with the purchase agreement, escrow release form, or any of the disclaimers listed below, this investor could have chosen to not invest in the first place. This investor could have also chosen to fly out and perform his own independent due diligence like several of the other investors in our predicament.

In addition, we never made a penny off of this investor or any other investor's involvement in this investment opportunity. I feel a personal attack on us would be more justified if we had profited at any investor's expense, but the reality is that we are also owed money by Global Community Development. I genuinely understand and empathize with all investors who have been duped, as we are in the same boat. I realize that no matter how hard we try, we will never please everyone. I apologize for the long winded reply, but I wanted people who read this to hear the other side of the story. If you have any personal questions or would like to learn more about this incident, please feel free to call me anytime on my cell phone at (602) 790-6408 or email me at [email protected]. I can provide hard evidence, such as copies of executed contracts, copies of email communications, and references of other people who are also owed money from Global Community Development, yet agree with my assessment above and appreciate everything Redtec has done and continues to do.

Thank you for your time!