Saturday, September 02, 2006

Elk Grove Pot Bust Update

The Plot Thickens

More homes have been busted and more are in the process of being busted. Information from a reporter at the Bee and the Special Agent in charge of the investigation from the DEA confirm that this ring is much larger than originally believed.

We looked at all of the addresses for the pot houses and examined the sales records to see who was involved. A tax records check revealed that ALL of the owners are male Asians, and several of them own multiple properties that have been busted.

While we were compiling this post, several other houses we pinpointed during the tax record check were also raided. These include all the houses in Natomas and the additional Elk Grove properties. The total number of raided pot houses stands at 21.

Further analysis revealed that the real estate agent representing the buyers for all 21 of these houses is the same person, and that the vast majority of the mortgages taken out on these properties was through a single lender. In fact, this real estate agent had very few transactions in the last two years except those involving the drug properties.

Right now we are uncomfortable releasing information that identifies the people involved here. Although these transactions look highly suspicious (You don’t put “drug dealer” on your mortgage application), we have no way of knowing the depth of their involvement. We do know that the transaction value of the 21 houses sold to the drug dealers is over $10,000,000, so the commission alone would be powerful incentive. It is also unclear why people engaging in mortgage fraud would also grow marijuana.

We have been in touch with law enforcement and the media regarding this new information, and we expect to learn more in the next few days. There are still other houses that fit our pattern that have not been raided. We also have some questions we think the folks in the media should follow up on:

Talk to Alexis Baker again and ask her how much she got for her place on Santa Ridge. Was it less than $495,000? Try and track down the sellers of the other pot houses.

Check the Metro MLS and the Bay Area MLS for similar types of transactions involving this agent.

Check with the lender and see if there are similar types of transactions involving this agent.

Look for a more complete analysis from us as events unfold.


Anonymous said...

Found this at

Elk Grove Flipper Haiku

Bay Area landlords

Incompetent / negligent management (not conducting periodic inspections)

Poor maintenance and upkeep (evidence to magistrate of poor management)

DEA will seize and sell house and keep money (helps pay for budget deficit)

Investment in upside down property is gone

Landlords not concerned because they are upside down anyway (nortgage exceeds resale value)

So bad, So sad!

Anonymous said...

i would bet that there are hundreds more homes like this in the bay area.