A real estate fraudster being chased by the FBI, an ex-CEO trying to take over his former company, and the upcoming demolition of a historic site in sports betting. From the wild and wooly world of real estate, here are our Hits and Misses for the week of Aug. 17-21.
Miss: A Fraudster Who Got Away. There is no shortage of real estate fraudsters out there, but few can claim the level of infamy of Rey Grabato II, who swindled nearly 2,000 investors out of more than $650 million and then evaded a federal arrest warrant issued in 2022. Well, Grabato has now gone where few real fraudsters have ever gone before: he has been added to the FBI’s Most Wanted List. “If you have any information concerning this person, please contact your local FBI office or the nearest American Embassy or Consulate,” said the FBI, which is offering a $150,000 reward for his capture. Grabato’s younger brother responded to the FBI’s attention to claim the 47-year-old fugitive is undergoing medical care after suffering from a stroke. He is believed to be in his native Philippines, but so far neither the FBI nor its Filipino counterparts have been able to locate him.
Miss: A Fraudster Who Didn’t Get Away. This week saw Chinese-style justice applied to Hui Ka Yan, who was once one of the world’s richest men thanks to his real estate development company China Evergrande Group. The Wall Street Journal reports the 67-year-old Hui will spend the rest of his life in prison after a court in Shenzhen determined he was responsible for carrying out large-scale financial fraud between 2016 and 2021. While Hui was pledging to construct over a million housing units across China, his company generated nearly $300 billion in liabilities. Hui pleaded guilty in April and the court fined Evergrande and its flagship property unit the equivalent of more than $2 billion.
Miss: An Ex-Boss Who Won’t Go Away. The conflict between Better Home & Finance and its ousted chief executive, Vishal Garg, became more intense this week when the company asked a federal court to enact a 30-day block on Garg from seeking shareholder support to regain his position. The company also requested that the court void any shareholder approval Garg may have already gained. And while leaving nothing to chance, the company announced it enacted a “shareholder rights plan” (also known as a poison pill) to prevent Garg and “an undisclosed group of investors in an effort to gain abrupt control of Better without paying a control premium and without properly informing public shareholders of the nature and extent of his plans.” This is the same Garg who gained notoriety when he fired 900 employees in a Zoom call prior to the 2021 Christmas holiday break. Seriously, who would want that kind of a boss back in the corner office?
Miss: Glum Builders. Builder confidence in the market for newly built single-family homes inched up one point to 35 in August, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) report. Any HMI reading under 50 indicates that more builders view conditions as poor rather than good. NAHB Chief Economist Robert Dietz sourly observed, “Our latest builder survey continues to show signs of weakness in the home building market. August marked the 16th straight month that at least 30% of builders reported cutting prices to support demand, as well as the 16th consecutive month with the HMI below 40.” However, there were some glimmers of good news to be found, with Dietz adding, “Custom home builders continue to report stronger market conditions than spec builders, reflecting better conditions at the higher end of the market. Smaller, less dense markets are also outperforming larger metropolitan areas, and smaller builders report relatively stronger conditions than larger builders.”
Hit: Very Generous Support. Kudos go to Greater Vancouver Realtors (GVR) for its $100,000 donation to the Canadian Red Cross to help victims impacted by the ongoing British Columbia wildfires. The donation, which is the largest charitable contribution in GVR’s history, was made through the organization’s Community Relief Fund, a charitable program launched this year to help people facing housing-related hardship caused by crises, tragedies and natural disasters. Jeff King, CEO of GVR, stated, “Realtors live and work in the communities they serve. When people in those communities face a crisis, we believe we have a responsibility to step forward.”
Hit: Coming Soon. Bill Pulte (yes, him again) dropped some intriguing news that could benefit the housing market. The Federal Housing Finance Agency director raised a subject that he has mostly avoided since taking office: loan-level price adjustments (LLPAs). In a post on his personal X account, Pulte stated: “We are nearing the end of our review of certain LLPAs. Decisions coming soon.” Of course, we don’t know what “coming soon” means (we’re still waiting for word on getting Fannie Mae and Freddie Mac out of federal conservatorship). Still, it is encouraging to know that Pulte has finally listened to complaints from the industry about LLPAs and might do something to help make homeownership more affordable.
In Memoriam: Sports Haven. One of the most colorful buildings along I-95 in Connecticut will soon be experiencing fatal whacks from the wrecking ball. Sports Haven, which opened in 1979 in New Haven as the world’s first live, in-person simulcasting venue for sports betting, was instantly recognizable for its cylindrical structure and large mural of thoroughbred racehorses in full gallop. The venue fell victim to changing times and trends, first with the rise of Connecticut’s tribal casinos and, more recently, app-based sports betting. The building has been shuttered since last December and demolition was supposed to occur this week, but it was abruptly delayed. It is unclear what will replace it, but it is a shame to see this colorful Connecticut shoreline landmark go the way of ash and rubble.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
Photo of Sports Haven courtesy of Facebook’s “I Love New Haven” forum.
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