This case takes place in Georgia and involves real estate fraud. The defendant and his mother decided to form a partnership, with each of them sharing the costs and profits evenly, to purchase and operate a restaurant. The defendant engaged the services of a real estate broker to provide them with advice relating to the fair market value of the restaurant, and to represent them in the negotiations for the purchase of the restaurant. The agent had the defendant fraudulently execute an offer purportedly from his mother to purchase the restaurant. The fraudulent offer was accepted. The contract that resulted from this purchase agreement required the mother to apply for financing within a few weeks. In connection with the purchase of the restaurant, the defendant and his mother designed another artifice to obtain financing under the pretense that the mother was not the owner of the restaurant individually, but that a corporate entity was the owner.
They created a limited partnership with the defendant and his mother as partners. Using this structure, the defendant arranged for a large amount of financing towards the total purchase price of the restaurant. The financing was obtained using the false representation that the partnership would be the owner after the sale, rather than the mother. The restaurant purchase and sale transaction closed.
Some time later, the defendant made some improvements to the restaurant. The defendant had decided to sell the restaurant, and to use fraudulent financial information and fraudulent representations to inflate the restaurant’s valuation. When the defendant decided to sell the restaurant, he enlisted the assistance of a real estate company that was aware of the restaurant’s inflated valuation. The real estate company then began to market the property with a list price well above the actual value of the property. The plaintiff saw a listing for the restaurant and acted on the misinformation, purchasing the property at a much higher price than it was actually worth.