Mi Casa? Sue Casa!

Hispanic immigrants cry foul over an alleged St. Louis housing scam

Upton Sinclair was the first to admit that his muckraking novel, The Jungle, missed its mark. "I aimed at the public's heart," said the author. "By accident, I hit it in the stomach."

The 1906 novel tells the story of the Rudkus family, Lithuanian immigrants freshly arrived in turn-of-the-century Chicago. Soon the family comes across a smooth-talking real estate agent who speaks their native tongue and assures them the quickest route to financial freedom is home ownership.

But the home they purchase from the agent is in deplorable condition and costs much more than they'd been told. Forced to make payments on the house or risk losing everything they have, all of the family members go to work in the city's notorious meat-packing industry.

Fraudulent loan documents qualified Alfonso del Rio and 
his daughter, Maria, for a home they say they cannot 
afford.
Jennifer Silverberg
Fraudulent loan documents qualified Alfonso del Rio and his daughter, Maria, for a home they say they cannot afford.
Attorneys Gustavo Arango (left) and Ken Schmitt believe 
as many as 70 Hispanic immigrants may have fallen 
victim to the alleged scheme.
Jennifer Silverbergphoto by Jennifer Silverbergpho
Attorneys Gustavo Arango (left) and Ken Schmitt believe as many as 70 Hispanic immigrants may have fallen victim to the alleged scheme.

One hundred years later, The Jungle is widely credited with spurring legislation that led to the creation of the Food and Drug Administration. As for the plight of the working poor — which the author hoped to illuminate in his novel — their struggles continue.

A case now unfolding in St. Louis has all the trappings of a Sinclair novel. It includes an unsuspecting immigrant community, allegations of fraud and deceit, and an American dream turned nightmare.

The story begins with attorneys Gustavo Arango and Ken Schmitt, who over the past couple of years have carved out a small but tidy niche serving Hispanic clients on issues of immigration.

The 36-year-old Arango, a native of Colombia, gives free legal clinics at churches and community centers. After the clinics, some attendees show up at the attorneys' humble south-county law office to retain their services in securing green cards and other immigration matters.

Last December, while Arango was giving one of his free sessions at Our Lady of Guadalupe Catholic Church in Ferguson, a Mexican woman approached him. The woman claimed she'd been swindled into purchasing a home she could not afford. Although she'd told her Spanish-speaking agent that she could only afford a home costing around $70,000, the house she purchased through the agent two years ago cost $103,000.

Arango brought the woman's case to his law partner, Schmitt, who eyed her complaints warily. Real estate claims, he notes, can be meticulously petty and difficult to win, as one can never be certain who's been promised what. Plus, the woman had signed off on the purchase of the home, even if her limited English made it unlikely she understood all of the sales contracts.

It wasn't until Schmitt took a cursory glance at the woman's closing documents that he, too, became suspicious. There on the settlement statement was a $46,781 commission charged to the seller of the home, Cots Realty Investments Inc., and payable to the woman's real-estate agent, RE/MAX Associates. By comparison, says Schmitt, a typical 7 percent sales commission on a $103,000 sale would be around $7,000.

"That just didn't make sense to me," recalls the 39-year-old attorney. "Immediately, I began to think that Cots Realty and RE/MAX must have some kind of relationship."

A look at files on record with the Missouri Secretary of State's office revealed Cots Realty Investments to be owned by Nigerian-born brothers Joseph and Leonard Adewunmi. At the time, the brothers also served as agents with RE/MAX Associates — the same company Schmitt's client contracted with to represent her as a buyer.

"She had no idea the seller of the home worked for the same agency that was supposed to be representing her as the buyer," Schmitt says. "At the very least, that's a conflict of interest and should have been disclosed."

The attorney was also intrigued by the fact that his client (an undocumented woman who asked that her name not be used for this article) claimed to know many more Latinos who felt they'd been deceived when purchasing a home through the Adewunmis' RE/MAX agency — particularly when represented by the brothers' Spanish-speaking assistants, Christian Joel Juan and Denisse Olmos.

Last month Arango and Schmitt filed a class-action lawsuit in St. Louis City Circuit Court alleging Joseph Adewunmi and real estate agents working on his behalf "formulated a clear and well-established pattern and practice constituting a scheme of deception and fraud in order to carry out an unlawful merchandising practice."

The suit also claims the defendants steered an untold number of Latino clients into purchasing homes owned by the Adewunmis. These homes, the suit alleges, were priced well in excess of fair market value and far beyond what the buyers could afford.

Accompanied by their attorney, Robert Feldmann, Joseph Adewunmi and Christian Joel Juan met in the offices of the Riverfront Times earlier this week to dispute the allegations. Contrary to the charges laid out in the suit, the real estate brokers say their business practices were designed to benefit — not harm — Hispanics.

"As an immigrant myself, my primary clients are other immigrant groups — Hispanics, Arabs, Bosnians — who are underserved in this market," says Adewunmi. "The way things have been put [in the lawsuit] hurts my feelings because everything I've done in my real estate career so far is to try to make sure these people don't get taken advantage of. This suit is coming from people who think they can blackmail me and get money out of me."

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