ABC Capital’s Walsh hit with criminal charges for not providing promised rehab of vacant home
Owner of ABC Capital faces criminal charges over broken promises in Baltimore The Baltimore Banner
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Criminal Charges Filed Against Real Estate Entrepreneur Jay Walsh
Criminal charges have been filed against Jay Walsh, the real estate entrepreneur whose company, ABC Capital, sold more than 1,000 homes in distressed areas of Baltimore to far-flung investors with the promise of fixing them up and generating income.
Investors Left Grasping for Help
In dozens of lawsuits, Walsh has been accused of not following through on promised repairs, leaving his investors — many of them located in foreign countries — grasping for help and causing city neighborhoods to fall into further disrepair.
The new charges represent a fraction of the allegations made against Walsh, but are the first time he’s faced possible criminal penalties.
Walsh did not immediately return a message seeking comment.
Maryland Home Improvement Commission Brings Case
The case was brought in March by the Maryland Home Improvement Commission, a consumer protection agency within the Maryland Department of Labor, and stems from a complaint from a Florida-based investor who says he paid Walsh $20,500 in 2022 to fix up a vacant home in the Shipley Hill neighborhood of West Baltimore.
The Florida-based investor purchased a home in the 2500 block of Hollins Street for $20,000 and entered into an agreement with Walsh for renovations in the amount of $20,500.
“The defendant has performed none of the work promised,” investigator Stanley Appel wrote in an application for statement of charges. “Also, the defendant stopped communicating with the homeowner and refused to complete the project.”
The statement of charges says Walsh did not have a valid Maryland home improvement license prior to acting in the capacity of a home improvement contractor, and engaged in home improvement business as a salesperson without obtaining a home improvement salesperson license. The charges include felony theft, as well as three misdemeanors.
Walsh failed to appear at a scheduled April 15 hearing in Baltimore District Court. Though the address listed in court records for Walsh is in Philadelphia, he is believed to be living in Aruba, where he continues to offer real estate advice on social media as “The Real Estate Doctor.”
Promoting Hands-Off Process for Investors
ABC promoted a hands-off process for its investors, in which the company would renovate and maintain the homes, with the investor receiving guaranteed rent income.
Walsh has denied intentionally misleading anyone and said the coronavirus pandemic had upended his business. In many cases, he said, the investors themselves were to blame, and that others were just trying to get money out of him.
“For every house that hasn’t been renovated, I can show you three that I did renovate,” Walsh previously told The Banner. “And if I wasn’t in the neighborhood, those properties wouldn’t have been renovated, and they would’ve been slumlord properties.”
ABC filed for Chapter 7 bankruptcy protection in December 2022 amid the mounting lawsuits and complaints.
Ongoing Investigations and Lawsuits
The Maryland Insurance Administration launched a probe following reports in The Banner, which a spokesman says is “active and ongoing.”
The Banner also obtained documents showing the Pennsylvania Office of Attorney General has been conducting a noncriminal consumer protection investigation of the Philadelphia-based company for two years.
The Florida investor whose complaint was the basis for the charges is Fernando Iacomacci, who purchased the home through the limited liability company Mafer Construction. Iacomacci also has a civil lawsuit pending against Walsh and Castle Title, a title company that facilitated many transactions for Walsh.
Castle Title has since closed.
ABC Capital has faced lawsuits from investors in countries such as Argentina, Hong Kong, Israel, Italy, Panama and other nations who allege that it did not fulfill its promises to renovate and rent properties in Baltimore as well as Philadelphia. Investors accuse the company of running a fraudulent Ponzi-type scheme. Other investors have complained on message boards or in group chats, unsure how to seek relief in a country where they do not reside.
The company lost a $1.25 million judgement in Philadelphia in 2022 and has settled several others.
ABC’s attorneys said in 2020, in response to one federal lawsuit in Pennsylvania, that the company “never fraudulently collected renovation costs and management fees with the fraudulent intent to withhold money due to its investors.”
It acknowledged, however, a myriad of problems including a breach of contract by a rent insurance company it had been working with. “There was no plan in advance not to pay rents owed to our investors, and in good faith, ABC Capital Realty had attempted to issue all payments due,” the company wrote in a July 2020 court filing.
ABC also cited “unexpected costs and real estate market forces that occurred after the original contracts were entered into with these investors,” including its inability to insure against nonpayment of rent, unexpected renovation costs and delays, and the nonpayment of rent by tenants resulting in evictions and further delays in collecting rent.
About the Author
Justin Fenton is an investigative reporter for the Baltimore Banner. He previously spent 17 years at the Baltimore Sun, covering the criminal justice system. His book, “We Own This City: A True Story of Crime, Cops and Corruption,” was released by Random House in 2021 and became an HBO miniseries.
SDGs, Targets, and Indicators Analysis
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 11: Sustainable Cities and Communities
- SDG 16: Peace, Justice, and Strong Institutions
- SDG 17: Partnerships for the Goals
The issues highlighted in the article relate to the development of sustainable cities and communities, ensuring justice and strong institutions, and promoting partnerships for achieving the Sustainable Development Goals.
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 11.1: By 2030, ensure access for all to adequate, safe, and affordable housing and basic services and upgrade slums.
- SDG 16.5: Substantially reduce corruption and bribery in all their forms.
- SDG 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships.
The article highlights the failure of the real estate entrepreneur to provide promised repairs and maintain homes in distressed areas, leading to further disrepair in city neighborhoods. This relates to the target of ensuring access to adequate, safe, and affordable housing and upgrading slums (SDG 11.1). The criminal charges filed against the entrepreneur also address the need to reduce corruption and bribery (SDG 16.5). Additionally, the involvement of consumer protection agencies and ongoing investigations by various institutions highlight the importance of partnerships for addressing these issues (SDG 17.17).
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Number of homes renovated and maintained in distressed areas
- Number of complaints filed against real estate entrepreneurs for failure to fulfill promises
- Number of criminal charges filed against individuals involved in fraudulent real estate schemes
- Number of ongoing investigations by consumer protection agencies
- Number of partnerships established between public, private, and civil society organizations to address housing and corruption issues
The article mentions the failure of the entrepreneur to renovate and maintain homes, the complaints filed against him, and the criminal charges brought against him. These indicators can be used to measure progress towards the target of ensuring access to adequate, safe, and affordable housing and reducing corruption. The ongoing investigations by consumer protection agencies and the potential establishment of partnerships with various organizations also serve as indicators of progress towards addressing these issues.
SDGs, Targets, and Indicators Table
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 11: Sustainable Cities and Communities | Target 11.1: By 2030, ensure access for all to adequate, safe, and affordable housing and basic services and upgrade slums. | – Number of homes renovated and maintained in distressed areas – Number of complaints filed against real estate entrepreneurs for failure to fulfill promises |
| SDG 16: Peace, Justice, and Strong Institutions | Target 16.5: Substantially reduce corruption and bribery in all their forms. | – Number of criminal charges filed against individuals involved in fraudulent real estate schemes – Number of ongoing investigations by consumer protection agencies |
| SDG 17: Partnerships for the Goals | Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships. | – Number of partnerships established between public, private, and civil society organizations to address housing and corruption issues |
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Source: thebaltimorebanner.com
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