Immigrants: New Florida Land Deals Zero in on Immigrants
Wright, Patrick, Investigative Reporters and Editors, Inc. The IRE Journal
The story began with a routine high school graduation assignment.
Instead of the usual spot reporting, I wanted to give the 2001 graduation at Flagler Palm Coast High School a human face, so I found a Russian-American senior who had won a small academic scholarship. Her mother explained that her daughter's education was the reason the family moved from Russia seven years ago. While we talked, she asked me if I knew why there were so many Russian-speaking families in Palm Coast.
Finding the answer to that simple query would take me eight months, and cost one of America's biggest homebuilders some $1.3 million. It also would reveal that the days of the Florida shady real estate deals were hardly over, just focusing on a new target: the immigrant.
In the past, companies would market Florida real estate to English-speakers in other states with prices that seemed reasonable when compared to the customer's home market. Brokers would tell buyers from New York to Los Angeles that their rent money for a little apartment could be used to buy a brand new home in Florida.
Companies made millions from these practices because Florida real estate costs far less than real estate in larger, metropolitan cities. Sellers claimed "caveat emptor" when customers later complained they were still being charged too much money.
The "Immigrant Express" package uncovered a similar real estate operation that took the practice one step further.
Real estate brokers sold real estate in Palm Coast, Fla., a city north of Daytona Beach, by advertising jobs to non-English speaking, recent immigrants in and around New York City.
When the immigrants answered the advertisements, salesmen told them the job was to sell real estate lots and houses to other customers, such as their friends and family. But when some families moved to Florida, they discovered their property cost six times the appraised value and as much as four times the amount charged to English-speaking customers by other companies.
The practice affected many immigrant families from across the world, from Venezuelans to Chinese-Americans. The main operation in New York brought as many as 500 Russian-speaking families from former Soviet provinces to Palm Coast, Fla., over the past five years.
The companies coordinating the "Immigrant Express" knew the practice could make millions because non-English speakers understood little about real estate prices and real estate law. If the Russian-speaking customers found out, brokers knew that growing up under communism taught many of them to keep quiet about their personal affairs. Many buyers didn't talk to me at first because they were embarrassed or thought talking would "create trouble."
As a result of the story, Centex Homes, the second largest homebuilder in the United States, paid $1.3 million in restitution to 186 customers and fired three New York real estate brokers. The Florida and New York attorneys general, U.S. Department of Housing and Urban Development and local sheriff's office are conducting their own investigations. Several customers are considering suing Centex Homes and other companies for civil and criminal violations.
Proving the story
The most difficult part of the story was getting people to talk. The Russian-speaking community is tight-knit and generally distrusts outsiders. I learned some basic Russian phrases to show respect for them and their culture regardless of whether they spoke English. I would start by greeting them in Russian and then used interpreters, from neighbors to family members, for clarity. With other nationalities, I phrased English questions in ways more easily understood by foreign speakers. For example, questions to Chinese speakers with little English would get rid of conjunctions and words such as "at" and "the" because they really aren't used in Chinese.
The stories included interviews with more than 25 recent immigrants who spoke Russian in Palm Coast and New York City; a review of 16 months of real estate transactions in Flagler County; a review of 24 specific warranty and property deeds in Flagler County; personal property receipts from various Russian-speaking people; reviews of Florida and federal statutes and laws concerning discrimination and real estate fraud; and reviews of Florida and New York state real estate laws. …