A group of California firefighters will be in a Charlotte courtroom Thursday to claim that a Mint Hill real estate broker misled them when he asked for investments.
Three firefighters filed a claim in April 2012 in federal bankruptcy court against Tony Brown Jr., a broker with Realty World Genesis in Mint Hill, and his wife. They say Brown falsely represented his plans to build a subdivision in east Charlotte when asking for a $450,000 investment.
A federal judge is expected to rule during a hearing Thursday whether Brown, who filed for bankruptcy in 2008, is required to pay back the loan amount.
“I can say … that millions of Americans (including myself) lost money in the recession,” Brown said in an email to the Observer. “I hate that things worked out as they did; I made repayments for a year, however, due to the real estate collapse I was forced to file bankruptcy.”
Brown declined to comment further on the pending case.
Rich Dean, acting deputy chief of the Palo Alto (Calif.) Fire Department, said in an interview he met Brown when he bought a couple of rental properties in Charlotte after some family members moved there.
After they met, Dean said he and a couple of colleagues began working with Brown, funding multiple loans of up to $140,000.
He said the loans, which were generally for terms of 30 to 90 days, “worked out wonderfully.”
Norm Park, another Palo Alto firefighter who is suing Brown, added that “as far as competence, Tony was definitely a competent and knowledgeable and experienced real estate agent.”
In 2008, according to an email, Brown approached Dean and his colleagues about investing $450,000 in a personal project to develop a residential neighborhood in east Charlotte. The property was supposed to be on Albemarle Road.
Brown also offered his realty office in Charlotte as collateral for the loan. Brown wrote in an email to the firefighters that the property was valued at between $775,000 and $800,000, although he acknowledged he still owed $135,000 on it.
“Because it was his own deal, we felt more comfortable that he would be more diligent and return the money within the time parameters,” Park said in an interview.
In a 2008 email to the firefighters, Brown said that he had purchased a 3.77-acre property and had received approval for a 13-lot subdivision.
He wrote that the subdivision would feature homes selling for $150,000 to $170,000, with lots selling for about $35,000 each.
Brown asked the firefighters for $450,000 for 12 to 18 months. He estimated the revenue would be $750,000, for a total profit of $260,000.
Dean, Park and Palo Alto Fire Capt. Mark Shah loaned $150,000 each to Brown, the firefighters say, stipulating that he pay each $1,000 a month in interest and pay back the total loan amount within 18 months.
But by spring 2010, the firefighters say, Brown had fallen behind on his payments and the firefighters had not heard anything about how the development was faring.
So they flew to Charlotte to meet with him and tour the property.
“There was nothing but a couple of stakes in the ground,” Dean said.
Dean said Brown told the firefighters that the downturn in the real estate market had made it difficult to develop the property.
According to public records, Brown and his wife filed for Chapter 7 bankruptcy in August 2011. He claimed $1,361,096 in liabilities, and the case was completed in December 2011.
Staff researcher Maria David contributed
Arriero: 704-358-5945; On Twitter: @earriero
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