The modest three-bedroom brick house at 2326 Lakewood Drive in Kennesaw, Georgia, was acquired seven years ago by a FedEx employee turned fraudster at a rigged auction on the steps of the Cobb County Courthouse.
Auctions of foreclosed homes were held on the steps every Tuesday, and this particular one, on Dec. 6, 2011, seemed notable only because of the unusually warm weather.
Otherwise, the routine was the same, with fraudster Jeffrey Wayne Brock, or one of his representatives, conspiring with two fellow fraudsters named David Doughty and Stanley Sullivan not to bid competitively. Wayne was thereby able to acquire properties at little more than the minimum bid. He then rewarded the other two men with payoffs for having refrained from bidding against him.
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According to the government sentencing memorandum from when Brock was sent to federal prison for a scheme involving numerous rigged auctions, the payoff for the Lakewood Drive house was $3,770. The memorandum notes that the actual payoff money in all Brock’s crooked auctions came not from Brock himself but from investors who bankrolled his acquisition of foreclosed houses. He or, in his absence, his representative provided the investor invoices for what were described as “finder’s fees.”
“Brock did not use his own money to pay Doughty and Sullivan for not bidding competitively at the December 6, 2011 auctions; rather, he used money that outside investors had given him to acquire foreclosed properties,” the memorandum says, “To keep his investors informed, Brock instructed an employee to send them invoices documenting the payments that he made.”
The employee dutifully prepared an invoice documenting a $3,770 payoff for the Lakewood house. The sum seems altogether reasonable considering that county records show Brock paid only $21,130 for a house that had been purchased back in 1999 for $95,000 and subsequently carried a mortgage of $155,000.
The memorandum does not identify the investor who provided the payoff funds. Property records show that title to the house did pass from Brock to a Cobb County entity called The First Real Estate Corporation, though no purchase price is recorded and the property passed that very same day to one of Sean Hannity’s myriad shell companies, SPMKX GA LL.
Hannity denies without equivocation that he has ever been an investor of any of Brock’s endeavors. Christopher Reeves, the registered agent for 21 of Hannity’s SPMK companies, told The Daily Beast in an email, “No entity in which Mr. Hannity held any direct or indirect interest was an investor with Mr. Brock or any entity associated with him.”
And that seems to make sense. Hannity has said he did not get involved in the details of his many transactions. And why would a guy who makes millions as a TV and radio commentator and was reportedly on the way to assembling a real-estate empire that the Guardian estimates to include more than 870 properties in seven states take such a risk for a relatively small score?
Even so, however innocent he may be of actual wrongdoing, Hannity remains the beneficiary of a crooked scheme. Records show Hannity paid $54,000 for a house worth double that amount.
Whoever paid the payoff, the outcome of this deal is so messy you might think that Michael Cohen was involved. There is no indication that he had anything to do with it.
One role Cohen did play in the present fuss over Hannity’s holdings came after the commentator was identified in Manhattan Federal Court as one of the self-proclaimed fixer’s three clients. The obvious possibility was that Cohen had tried to hush up a potential sex scandal with Hannity—work the attorney had done on behalf of his other two clients. Hannity was quick to say Cohen had only helped him with some real estate matters.
That seems to be what prompted Jon Swaine of the Guardian to look into what real estate matters those might have been. Swaine seems not to have come up with any immediate revelations concerning Cohen, but he did determine Hannity had an empire in the making that involved a host of shell companies.
Hannity had acquired at least 11 properties through Brock, many at the weekly auction on the Cobb County courthouse steps. A records check showed that Brock had pleaded guilty to federal bid rigging and fraud charges in 2016.
Along with describing how the investors provided the payoffs to secure a purchase price far below the actual value, the sentencing memorandum notes, “For the homeowner victims, these thefts occurred at a low point in their lives.”
The memorandum continues, “The money that Brock and his conspirators kept for themselves could have helped the victims get back on their feet, but Brock instead enriched himself.”
After his arrest, Brock quickly agreed to cooperate. The prosecutors argued in the memorandum that Brock was nonetheless “deserving of a 15-month sentence.” Judge Mark Cohen, no relation to the fixer, gave him only six.
The unidentified investors who provided the payoffs were never brought to account. That includes whoever provided the $3,770 payoff for the house at 2326 Lakewood Drive.
There is also the question of the 10 other foreclosed houses that Brock had purchased at sub-bargain prices and then conveyed to Hannity through various companies.
That is without going into Hannity’s unrelated purchase of two Georgia apartment complexes on a single day for a total of $22.7 million, with $17.9 million of that paid through a loan insured by a helpful HUD.
The use of HUD funding and the foreclosure purchases do not sit well with folks you might initially figure to be Hannity fans. These include Ray Gilreath, the 84-year-old Air Force retiree who raised a family in the Lakewood Drive house, which he owned for three decades before he sold it to the folks who subsequently lost it when they defaulted on the mortgage.
“For some reason, I have no use for him,” Gilreath said of Hannity when contacted by The Daily Beast on Tuesday.
Gilreath suggested, “I think he takes advantage of poor people.”
Gilreath was hardly pleased to learn that Hannity now owns the house that was his home for so long.
“If I was a criminal, I’d go burn that thing down,” Gilreath said.
Of course, Gilreath is so displeased in the first place only because he is anything but a criminal. He possesses an actual sense of right and wrong.
